China Raises Export Tariffs For Some Steel Products Again In Green Push

• China will raise export tariffs for pig iron and ferrochrome, and remove export tax rebates for 23 steel products from Aug. 1, the second adjustment in three months as it seeks to ensure domestic supply while controlling output to curb emissions. Export tariffs for high-purity pig iron will be lifted to 20% from 15%, and for ferrochrome will be increased to 40% from 20%, the Ministry of Finance said in a statement on Thursday. 
• The country will also cancel export tax rebates for 23 steel products, including some cold-rolled coils and silicon steel which have higher added-value compared with carbon steel. "The changes aim to promote upgrade and high-quality development of the steel industry," said the finance ministry. 
• China, the world's top steel producer had already adjusted its tariffs on May 1, when it removed export tax rebates for 146 steel products, hiked pig iron and ferroalloys export tariffs and exempt some temporary import tariffs. The adjustments came as the country wants to ensure domestic supplies when curtailing production for fewer carbon emissions. 
• However, as steel demand and prices are still well supported by the global economic recovery, the country's steel products exports picked up 23% in June after a 34% drop in May. Meanwhile, steel output in the first half also jumped 11.8% in China, making it harder to keep to the promise of no rise in annual crude steel production in 2021. 
• The rise in steel prices will raise the costs of construction materials in the domestic market, causing a rise in development costs for commercial and residential buildings. However, these costs will likely be passed on to consumers considering the strong demand influencing robust growth in the construction sector, resulting in an increase in real estate prices, particularly for new construction.

(Source: Reuters & NCBCM Research)