It is reported that China Premier Mr Wen Jiabao decision in a government meeting that, China will raise export rebates for textiles, steel, petrochemical and electronics starting on April 1st.
According to Xinhua report, which didn’t provide further details that rebates will also be increased to help exporters of non ferrous metals, and information-technology products.
CISA has suggested in its report to relevant department that all steel exports should enjoy export rebate. Among others, export rebate rate for such high value added products as cold rolled coil, galvanized coil, alloyed steel should be raised to 13% from 5%. CISA disclosed that the real rebate rate change may be a little different with those suggested though they have been trying to get more increase. Further, hot rolled steel coil would not enjoy export rebate. The final result would be announced soon by Ministry of Finance of China.
Customs statistics show that steel export tonnage for February is merely 1.56 million tonne down by 49.8%YoY and 18.3%MoM. The total export volume for January and February is 3.47million tonne a drop 52.1%YoY from the period of last year. There"s few new contract in 2009 since 60% of them are signed in late 2008. Export tonnage is likely to see an 80% slump in 2009.
Markey analysts believe that rebate rate increase may of help, but what really accounts is overseas demand. Export prices for Chinese steel products are not competitive in the world market as those by South Korea, Turkey, South East Asia and CIS countries are much lower. Thus it is regarded as an effort by Beijing to support Chinese steel industry take into account current recession in world economy. China has also lowered export rebate rate or levied export tax to cool export fever in past years.