After China’s steel exports rebounded for the third consecutive month, June may continue to rebound and set a new high during the year. Affected by this, there was a rumbling in the market yesterday that since July 1st the country will continue to impose tariffs on some steel exports.
Analysts believe that it is unlikely that tariffs will be imposed on steel exports again in the near future. Policy adjustments and when they are introduced will depend on the specific circumstances of the rebound in exports.
Steel exports rebounded in June
Since the continuous increase of tariffs last year, China's steel exports in February this year was only 3.107 million tons, the lowest in nearly a year. However, steel exports exceeded 5 million tons in May, setting a new high for the year and rebounding for the third consecutive month.
In May, China's steel exports reached 5.555 million tons, a year-on-year increase of 16.3%. At the same time, China’s steel imports amounted to 1.335 million tons, a decrease of 11.2% compared with the previous month; net steel exports reached 4.219 million tons, an increase of 29% from the previous month, exceeding the level of August last year.
Liu Yuan, an analyst at the “My Steel†Research Center, believes that the rapid growth of steel exports in recent months was mainly due to the widening spread of international steel prices, which stimulated domestic steel exports. The price increase of steel products in the international market is larger than that of the domestic market. Even if factors such as tariffs and freight rates are added, foreign steel exports can still be profitable. This is the main factor in promoting the growth of steel exports.
Liu Yuan said that in June, domestic steel prices generally declined, while foreign steel prices remained strong, domestic and foreign steel prices have not decreased but increased; at the same time, sea freight fell sharply. Under the stimulation of these two factors, it is expected that in the coming months, China’s steel exports may still maintain a relatively high export volume, and it may exceed 6 million tons in June. In July and August, the demand for foreign summer vacation may be weaker than 6 A slight drop in the month.
"In June, the phenomenon of concentrated export of steel products will appear." An analyst from China's United Steel Network, Nguyen Nguyen, said that the news of "continue to impose additional export tariffs" in the previous period was widely circulated in the market and could stimulate steel mills and traders to speed up exports. In addition, it is understood that the export orders of steel mills are very full, and there are relatively many contracts requiring delivery in June. Under the above two factors, the export volume of steel products in June is expected to reach 6 million tons, and the possibility of reaching 6.5 million tons will not be ruled out.
Joint metal network analyst Zhang Ping also believes that domestic and foreign steel prices are gradually widening, the market research shows that steel exports are increasing, so in June steel exports "certain rebound."
It is unlikely that tariffs will be imposed in the near future
From this point of view, steel exports may rebound strongly for four consecutive months, which naturally triggers the market's strong expectations of the resumption of control policies. Yesterday the market rumors that since July 1st the country will continue to impose tariffs on some steel exports.
Regarding this rumors, some people in the industry unequivocally denied yesterday: “If the tariff adjustment is implemented tomorrow, how can the related notification today not be introduced?â€
Nguyen Nguyen also believes that the implementation of the tax increase policy on July 1 is less likely. As for the timing of the adjustment of export tariffs and export tax rebates, the relevant departments may consider the situation of export of steel products in June, and the adjustment target is likely to be dominated by alloy products that currently enjoy a 5% rebate.
Zhang Ping predicts that the new steel export policy may be introduced in July and August because the rebound in steel exports is too fierce. In July, the peak of 7 million tons may be reached again, and the country cannot allow it to develop. At the same time, the current policy of loopholes in export of steel products (such as the addition of trace alloy components to convert common steel products into alloy products and thus enjoy a 5% export tax rebate) is a serious situation, and policies need to be remedied. In addition, from the purpose of controlling the increase in the PPI, it is also necessary to control the export of steel products.
Analysts believe that it is unlikely that tariffs will be imposed on steel exports again in the near future. Policy adjustments and when they are introduced will depend on the specific circumstances of the rebound in exports.
Steel exports rebounded in June
Since the continuous increase of tariffs last year, China's steel exports in February this year was only 3.107 million tons, the lowest in nearly a year. However, steel exports exceeded 5 million tons in May, setting a new high for the year and rebounding for the third consecutive month.
In May, China's steel exports reached 5.555 million tons, a year-on-year increase of 16.3%. At the same time, China’s steel imports amounted to 1.335 million tons, a decrease of 11.2% compared with the previous month; net steel exports reached 4.219 million tons, an increase of 29% from the previous month, exceeding the level of August last year.
Liu Yuan, an analyst at the “My Steel†Research Center, believes that the rapid growth of steel exports in recent months was mainly due to the widening spread of international steel prices, which stimulated domestic steel exports. The price increase of steel products in the international market is larger than that of the domestic market. Even if factors such as tariffs and freight rates are added, foreign steel exports can still be profitable. This is the main factor in promoting the growth of steel exports.
Liu Yuan said that in June, domestic steel prices generally declined, while foreign steel prices remained strong, domestic and foreign steel prices have not decreased but increased; at the same time, sea freight fell sharply. Under the stimulation of these two factors, it is expected that in the coming months, China’s steel exports may still maintain a relatively high export volume, and it may exceed 6 million tons in June. In July and August, the demand for foreign summer vacation may be weaker than 6 A slight drop in the month.
"In June, the phenomenon of concentrated export of steel products will appear." An analyst from China's United Steel Network, Nguyen Nguyen, said that the news of "continue to impose additional export tariffs" in the previous period was widely circulated in the market and could stimulate steel mills and traders to speed up exports. In addition, it is understood that the export orders of steel mills are very full, and there are relatively many contracts requiring delivery in June. Under the above two factors, the export volume of steel products in June is expected to reach 6 million tons, and the possibility of reaching 6.5 million tons will not be ruled out.
Joint metal network analyst Zhang Ping also believes that domestic and foreign steel prices are gradually widening, the market research shows that steel exports are increasing, so in June steel exports "certain rebound."
It is unlikely that tariffs will be imposed in the near future
From this point of view, steel exports may rebound strongly for four consecutive months, which naturally triggers the market's strong expectations of the resumption of control policies. Yesterday the market rumors that since July 1st the country will continue to impose tariffs on some steel exports.
Regarding this rumors, some people in the industry unequivocally denied yesterday: “If the tariff adjustment is implemented tomorrow, how can the related notification today not be introduced?â€
Nguyen Nguyen also believes that the implementation of the tax increase policy on July 1 is less likely. As for the timing of the adjustment of export tariffs and export tax rebates, the relevant departments may consider the situation of export of steel products in June, and the adjustment target is likely to be dominated by alloy products that currently enjoy a 5% rebate.
Zhang Ping predicts that the new steel export policy may be introduced in July and August because the rebound in steel exports is too fierce. In July, the peak of 7 million tons may be reached again, and the country cannot allow it to develop. At the same time, the current policy of loopholes in export of steel products (such as the addition of trace alloy components to convert common steel products into alloy products and thus enjoy a 5% export tax rebate) is a serious situation, and policies need to be remedied. In addition, from the purpose of controlling the increase in the PPI, it is also necessary to control the export of steel products.
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