Don’t hold your breath, as a Chinese iron ore tax cut may not fly: mart

Dec 14, 2012 | 11:21 AM | None

Tags  iron ore, tax cut, Wang Xiaoqi, China Iron and Steel Association, Xie Sanming, Ministry of Industry and Information Technology, MIIT

SHANGHAI — Despite recent speculation that the Chinese government could support domestic iron ore producers by slashing taxes by as much as half, such a move may be unlikely as it would be very complicated and possibly ineffective in practice, sources told AMM sister publication Steel First.

China Iron and Steel Association deputy secretary-general Wang Xiaoqi said at a recent iron ore conference in China that the government was studying tax reductions of 10 to 15 percentage points (amm.com, Nov. 16).

The idea is to give China’s marginal producers more support and reduce reliance on imports after the third-quarter price slump increased pressure on domestic miners.“This year we saw a very moderate contraction in production of domestic Chinese iron ore at the trough of the spot market price. A lowering of taxes on mines would certainly relieve the cost position of miners in China and stimulate production,” a Metal Bulletin Research analyst in the United Kingdom said.....