"The central government does not intend to release any further restrictive policies on steel product exports this year, as current export tax policies are recognized as effectively controlling steel product exports," Chen Ling, deputy director general of the CISA's Metallurgical Industry Economic Research and Development Center, said. 

However, Chen also predicted that China's steel product and slab net exports will be in excess of 50 million tonnes this year.  

The Chinese government levied a 5% to 10% export tax on a total of 83 types of steel products including wire, hot-rolled plate and steel section on 1 June this year, following the cancellation of export rebate taxes on the 83 types of steel product on 15 April. In addition, the export tax on steel billet, steel ingot and pig iron was increased from 10% to 15% on June 1. 

"Although steel product exports were still at high levels in August, we've seen a noticeable fall in growth rates, and this is mainly a result of increased export taxes. Steel product exports are still increasing, and this is mainly due to global demand. However, we have to admit that China's steel production growth is currently outpacing growth in domestic demand, and moderate growth in exports will help solve the domestic oversupply problem and ensure the healthy development of the international market," Chen added. 

Cai Jin, deputy secretary of the China Federation of Logistics and Purchasing commented that China currently exports nearly 12% of its steel product output, and this is apparently an acceptable level for the central government.

However, Chen Kexin, senior economist from the Ministry of Commerce's Distribution Productivity Promotion Center, told Interfax, "China is still excessively exporting steel products, and the National Bureau of Statistics has found that export growth is outstripping production growth. However, the Chinese government will continue to pay close attention to steel product exports for the remaining three months of the year and will release further restrictive policies if the current ones are deemed insufficient." 

Chen also suggested that China should invigorate the current underdeveloped domestic demand for steel products and use part of current exports to supply the domestic market.

China exported 5.38 million tonnes of steel products in August, down 9.4% from July, and exported a total of 45.08 million tonnes of steel products in the first eight months of 2007, surging 83.8% from the same period last year, according to statistics released by the General Administration of Customs.