China Iron & Steel Association released a statement on May 29th 2008 formally denying the rumor that Beijing is to introduce a tougher export tax policy on June 1st 2008 adding that such rumor would destabilize the export and import markets, and threaten the country overall economic health as the country struggles with post-earthquake reconstruction.
The market analysts believe there is little chance to see tax policy change on steel products before fourth quarter, although they have not ruled out the possibility of further move from Beijing within this year, learned by China Securities News.
CISA official said that the government's efforts to suppress excessive steel export have already taken desirable effect, leading to a substantial decrease of finished steel products and semis export in the first four months of this year.
Mr Zeng Jiesheng senior analyst of Mysteel said that China's monthly steel products export would stay above 5 million tonnes for May and June and hover over a high level in the third quarter and the steel export would add up to 42 million tonnes in the first three quarters. He said that it is quite clear that the steel export is set to rebound, forcing the central government to go in for tougher tax policy within this year, but that might not happen before the last quarter.
Mr Zeng Jiesheng said "Last year's tightening efforts have already paid off and received the expected impact. And the authority also realizes that too frequent policy change would have backfire impact on driving up speculative steel export boom".
Moreover, Beijing would also take into account China's overall dipping trade surplus growth. And as long as the strong global demand stays here, higher export tax would continue to push up the export price and tonnage and thus, prop up the domestic price.
