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Deep analysis, China cancelled stainless steel products after export rebates, the price why not down

Source:WUXI Oumeidei Metal Products Co., Ltd     Time:10 May 2021

Deep analysis, China cancelled stainless steel products after export rebates, the price of why not fall against the rise?

The 2021-04-29 opening
April 28, the Ministry of Finance of the official announcement on the cancellation of part of the steel products export tax rebate announcement, should be the hottest topic of stainless steel circle recently!

The vast majority of people talk about this topic, the first reflection is basically: "export cool", "export to domestic sales, stainless steel prices to go down"...... Why do people say that?

1, one-size-fits-all, domestic stainless steel temporarily do not enjoy export tax rebate policy!

Except for a small amount of coils, ingots, semi-manufactured products (the original export rebate rate is 0), from May 1st, the export rebate rate of other stainless steel is reduced to 0. At this point, all stainless steel temporarily do not enjoy export tax rebate policy!

According to statistics, China's monthly stainless steel production of 2.83 million tons, rough estimate, 10.1% rely on export digestion, then cancel the export tax rebate, part of the stainless steel production to domestic sales, in fact, the export is mainly 300 series, so virtually increased the pressure of domestic 300 series supply.

2, increase the export cost of stainless steel, the competitive advantage is all gone!

China's main export of stainless steel in turn is: Korea, China Taiwan, Vietnam, India.

Below, we understand the stainless steel market of South Korea, one of the main export places of China, and compare the price before and after the tax rebate with the quotation of 304 from POSCO in South Korea and the local price of 304 stainless steel imported from China in South Korea. The figure is as follows:

It is obvious that if the domestic 13% export rebate rate is cancelled, the domestic export cost is bound to increase, which will be directly transferred to the price of foreign importers and compared with the domestic price, without an advantage. So why do foreign importers import from China, other than ordinary stainless steel for a specific purpose?

But why

Cancel export tax rebate, need not panic?

In May, steel mills switched to production frequently, and the shift from export to domestic sales just filled the gap!

After May 1, the cancellation of domestic stainless steel export tax rebate, will let some exports to domestic sales, but do not panic. I have also been reported before the network, there are steel mills in May, the news of the conversion to general carbon steel, after also constantly coming out like central China, South China, East China stainless steel enterprises to produce general carbon steel news, so the export to domestic sales are still worried about the amount of digestion?

An export demand of 3.41 million yuan a year is beyond the reach of other countries.

In 2020, the total output of China's stainless steel is 33.95 million tons, of which the export volume is about 3.417 million tons; The total output of Indonesia stainless steel is about 2.7 million tons, of which 1.248 million tons are exported to China!

Data interpretation: other countries do not have 3.41 million new production capacity to supply the demand of China's stainless steel exports; We can assume that, other Indonesian stainless steel price is China's exports cheaper, you can fill the Chinese export amount of some other countries, but at the same time, Indonesia's exports to China will also reduce the amount of ah, some Chinese don't go abroad, the Indonesian part not the import of Chinese, whether it is to achieve the balance between supply and demand, so you don't have to panic.

In addition, according to the latest news from our net to foreign trade circle, the opening of Indonesian Aoyama has also been raised today. 304 hot rolled coil is up by 7.3% to FOB $2200 / ton, and 304 cold rolled coil is up by 9.1% to FOB $2400 / ton.

So, our country rises, other countries are also in the rise of the price, we may see later, importers of other countries will gradually accept the new price of our exports!

On anti-dumping: Many countries have anti-dumping policies against Indonesia!

According to 51BXG, the EU's anti-dumping duties on stainless steel from Taiwan range from 4.1 to 7.5%, which are generally lower than the 17.3% levied on Indonesia by the EU and the 9.2-19% levied on the Chinese mainland. Taiwan is one of the main export regions of the Chinese mainland. Therefore, Taiwan's export advantages alleviate the cost pressure of inland exports to Taiwan to some extent. The quantity of late export to Taiwan area is affected by the export regulation policy or will be limited.

From the point of view of the anti-dumping policy of the above countries, compared with China, many countries pointed to Indonesia's stainless steel exports, in addition to the understanding of the market, South Korea will take the way of import distribution of Chinese stainless steel enterprises in the future, retain part of China's export to South Korea, is not a one-size-fits-all!

After China cancels tax rebate for stainless steel export...

Stainless steel spot price, do not fall anti - rise!

By the cancellation of the stainless steel export tax rebate policy, Shanghai stainless steel night opening panic fell, compared to the previous day's closing price once fell nearly 300 yuan/ton. But today's overall market sentiment was steady, futures also recovered sharply from the night's losses.

Today the spot price of 304 stainless steel does not fall but rose, again broke through the 15000 mark, cold rolling producing area, delong, beigang new material four feet rough edge base price rose to 15000 yuan/ton, even has been called inventory pressure 201 market, also usher in bottoming out, 201J2 four feet cold rolled rough edge base price also rose to 8000 yuan/ton.

In the future, the processing of supplied materials from Indonesia will increase, and the supply of domestic 304 cold rolling production may decrease!

The cancellation of domestic stainless steel export tax rebate policy, the most direct benefit may be Indonesia Castle peak and other enterprises, so in the future, Indonesia's 2E material back to the country will be reduced, the domestic big qingge processing plant, processing orders will also increase, domestic stainless steel 304 cold rolling production will shrink!

The country encourages the import of raw materials and exports with added value.

Yesterday, everyone was concerned about the announcement of the cancellation of export tax rebates, the State Council issued: on pig iron, crude steel, recycled steel raw materials, ferrochrome and other products to implement zero import temporary tax rates, attention is less.

It is no longer in line with the goal of "carbon neutral" and "carbon peak" to transport non-polluting products to foreign countries at a cheap price, but to leave the polluting production process in China. Therefore, it is better to have a long pain than a short pain!

In addition, we can see: this stainless steel products are not in part of the steel export tax rebate to cancel the ranks of the country to encourage the export of value-added stainless steel products!

Summary: Cancel the export tax rebate, the advantages outweigh the disadvantages, short-term impact on the stainless steel market sentiment, increase imports, reduce exports, encourage the export of value-added stainless steel products, promote short process smelting process, long-term beneficial to the healthy and long-term development of the domestic stainless steel industry.