China is likely to leave steel export taxes and tax rebates unchanged going into 2010, market participants said. The ministry of finance said in a website statement it would continue to levy export taxes on billet, ferro-alloys and some steel products.

 

It did not indicate whether any taxes or rebates would be changed, but the steel market is not expecting any new measures after some adjustments earlier in the year to help exporters of finished products. "If the government keeps export tax rebates unchanged, it will be positive for local mills because international market demand is going to improve next year, and with such tax rebates, Chinese steel exports will have greater competitiveness," said an analyst in Shanghai. Export rebates were applied to hot rolled coil, H-beams, plate, and some types of sections, alloy bar, wire, pipe and stainless steel, from June.

 

In April, the rebate on cold rolled coil and hot-dipped galvanized coil was lifted to 13% from 5%, in a move to encourage exports amid poor demand. Steel exports from China hit a record low earlier this year and the country swung to be net importer for the first time since 2006. When taxes were raised on semi-finished steel and ferro-alloys in 2006, they were called temporary but are now a key plank of Beijing's strategy to limit production from energy-intensive industries. In June, Beijing introduced a 9% export tax rebate for a wide range of steel products including hot rolled coil, H-beam, plate and some types of sections, alloy bar, wire, pipe and stainless steel. China currently charges 25% export tax on billet exports, and 20-25% export taxes on ferro-alloys.