China cancelled export tax rebate for the Boron-Added steel products

China cancelled export steel tax rebate for the Boron-Added products, the policy will affect 40% of the Chinese steel exports.
From 1th, Jan, 2015, Chinese Ministry of Finance stated that China steel export tax rebate for the Boron-Added products have been cancelled. The boron-added steel products include flat and long steel products.(Hot rolled steel plate, steel coil, steel profiles, reinforced steel rebar, beams, steel channel, steel bars, etc.)

China steel export tax rebate cancellation affect steel exports.

These Chinese steel products after adding Boron chemical element would get tax rebate 9%-13%, so the cancellation is giving an hard attack on steel exporting. According data from Chinese customs, from Jan to November of 2014, China exported steel products 83,610,000.00 Tons. Increased 46.79% compared with the same period of 2013. From the above Boron Added steel products 26,204,000.00 Tons, 31.3% of all the exported steel.

Why boron-added steel products obtain export tax rebate.

Before that China Customs stated, for the steel with Boron ≥ 0.0008%, it can be declared as Alloy Steel. China supports alloy steel exports, so it will bring the tax rebate 9-13% when exporting. For the steel companies, it is a very good policy to have competitive price in the foreign countries steel market. Deputy Secretary of China Council Jiang said:” Chinese steel companies exported low steel products through adding boron element, to make the exporting price competitive at the international market.” “Boron Steel” has been an open secret for Chinese steel industry. On the other hand, this behavior is irritating the steel manufacturers from other countries.

Tax rebate for boron steel effect on Chinese domestic steel market.

In a short time, the big decline on the steel exporting will verify the ability of the China local consumption, if manufacturers maintain the status of mass production, it will cause a bad effect in the domestic market, to the excess production capacity of Chinese market, it is one disaster after another.

For the long run, there is another chance, manufacturers might start adding other alloy elements like Chromium into the steel products, for receiving the steel export tax rebate.