Chinese scrap tags seen on rise in ’11

Dec 22, 2010 | 01:46 PM |

China's ferrous scrap prices are likely to rise early next year after a 50-percent value-added tax (VAT) rebate on scrap trades is canceled beginning in January.

Tax rebates were introduced in 2009 to encourage scrap traders to bring business into the official economy without causing them too much additional cost or disruption.

"China put a 70-percent VAT rebate on scrap purchases in 2009, then cut it to 50 percent in 2010, and it will be scrapped in 2011 in line with its three-year plan," according to a steel mill source in eastern China.

The government wants the scrap industry to take on a more "regulated form," said Yan Qiping, secretary general of the China Association of Metal Scrap Utilization (Camu).....

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