It is reported that Chinese government is mulling over a plan to scrap the licensing for steel export as of January 1st next year to boost steel exports and mitigate steel makers losses.
Mr Gan Xiaoqing head of the development & research institute under Beijing Shougang Group said that "Currently, China"s steel sector mainly depends on domestic consumption and to what extent the licensing removal would help boost steel exports hinges on international market conditions."
He said that the move will do little help in stimulating exports if the current weakening global steel market continues. And the removal of the licensing will help less for large steel mills like Shougang, whose products are mainly high value added ones.
Mr Gan suggests a difficult path for whole next year with softening market conditions persisting in the H1. He said that things may turn better in the H1 with the stimulus packages starting working.
An analyst from Baosteel research institute believes that the licensing scrap will help more for those medium and small steel producers.
Senior official from Rizhao Steel Group said that "The licensing policy has prompted us shifting focus on domestic market from overseas shipment and if Beijing scraps it, we will try marching into global markets. The steel group is running loss at the moment.
The deepening global financial crisis has plunged Chinese steelmakers into huge losses with the latter suffering the first monthly deficit in October since 2002.