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China may raise wire rod export rebate

Keywords: Tags  wire rod, China export rebate

SHANGHAI — A rumor that the Chinese government is going to raise the export rebate for boron-containing wire rod began circulating Friday, the country’s first working day of the year.

The Finance Ministry in December added two new harmonized tariff schedule codes for boron-added wire rod and bar products effective Jan. 1.

To the surprise of most market participants, the government not only retained the export rebate for long steel products, but rumors circulated that it may also increase the rebate.

“I heard today that the rebate rate for boron-containing wire rod will be raised to 13 percent from 9 percent,” an export director at an east China steelmaker said Friday.

A number of traders also heard similar reports.

“It is quite probable since a lot of steelmakers have told us the same thing, even though there has been no official confirmation,” a major trader in Shanghai told AMM sister publication Steel First.

This may be an indication of the government’s resolve to stabilize the country’s exports despite complaints from some countries on the impact of Chinese boron-containing steels on their local markets. China’s new leaders may be even more eager to secure growth while adjusting the structure of the economy, some sources said.

But several traders expressed concerns about the possible increase.

“This could spark more anti-dumping or anti-subsidy cases this year since it could lead to lower export prices and higher export volumes,” another trader in east China said.

China’s wire rod exports increased sharply last year, when prices were competitively low after a round of cuts in the domestic market.

Wire rod exports totaled 5.04 million tonnes in the first 11 months of 2012, up 80.1 percent from 2.8 million tonnes in the same period the previous year, according to Chinese customs data.

A version of this article was first published by AMM sister publication Steel First.

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