Chinese Ministry of Finance announced that China is now offering a 9% value added tax rebate on exports of several high end steel products in move to support domestic steel mills by propelling exports.
The rebate cuts more than half off the value added tax rate of 17% giving producers a strong incentive to export the products covered by the rebate. The new policy takes effect from June 1st 2009.
The list includes bars & rods, sections, HR, plates, SS HR, sheet piling railway materials, tubes and wires etc.
Chinese steel mills are facing losses this year, as exports have shrunk due to weakened overseas demand and relatively high export costs, since the central government had capped rebates in the past few years to try to restrict production. The collapse in export demand cut China's shipments of steel products to the rest of the world by 60% in the first four months of the year and left China in an unusual position as a net importer of steel products in March and April.