SHANGHAI China has
apparently decided to heed a World Trade Organization (WTO)
ruling by removing a range of raw material export taxes that
were the target of a successful complaint.
None of the materials
concernedsilicon, magnesium, manganese flake and
metallurgical cokewere included in an updated schedule of
customs tariffs for 2013 posted on the Chinese Ministry of
Finances website Monday.
An official at the
ministrys taxation department told AMM sister
publication Metal Bulletin that a 20-percent tax on
manganese, a 15-percent tax on silicon and a 40-percent tax on
metallurgical coke would be canceled as of Jan. 1. Local
websites reported that taxes on all nine materials included in
the WTO case would be repealed. These also include bauxite,
zinc, fluorspar, silicon carbide and yellow phosphorus.
The Chinese government so far
has not commented on the cancellations.
The WTO last year backed a
complaint by the United States, European Union and Mexico that
Chinas raw materials export regime distorted
international markets in several materials. In January this
year, China indicated it would comply with the ruling "in a
reasonable period" after losing an appeal.
The removal of the coke tax
highlighted the pressure the country was placed under by the
WTO, an analyst in Beijing told AMM sister publication
Steel First on Monday (
amm.com, Dec. 17).
The repeal should please
producers in China, as well as overseas consumers.
"The original goal of the
(electrolytic manganese) tax was to curb export and then to
suppress the development of the high-polluting industries, but
thats not been the case," Tan Zhuzhong, chairman of the
National Association of Electrolytic Manganese Metal Plants
Directors, told Metal Bulletin.
The export taxes have fueled
widespread smuggling of some materials, meaning that in some
markets, output hasnt been restrained but the government
loses out on income anyway.
"Theres usually around
100,000 tonnes of manganese flake illegally exported from China
each year, while the formal export volume is about 160,000
tonnes a year," Tan said.
The effect on the overseas
market is difficult to gauge, market players said. There is the
possibility that the cancellation of taxes could lead to higher
prices as smuggling is no longer incentivized and less material
is offered from illegitimate sources.
The finance ministrys website indicated that
ferroalloys export taxes will continue at 20 or 25 percent
despite some earlier speculation that they could be adjusted
amm.com, Dec. 13).
A version of this article was first published by AMM sister
publication Metal Bulletin.