With the shrinking domestic steel demand, many steel mills have turned their sights overseas. In the first eight months of this year, China exported 56.83 million tons of steel, a year-on-year increase of 35.4%. Industry insiders said that this year's steel exports exceeded expectations, and it is expected that annual exports will record a new record.

However, at the same time as the export volume soared, the pressure on anti-dumping and countervailing subsidies suffered by the domestic steel industry also increased significantly. Some industry insiders suggested that some exporting companies will add boron to Pu steel and change their face to the export of alloy steel products. The “unspoken rules” that allow them to enjoy export tax rebates can easily become a handle.

China's apparent consumption of crude steel is rare negative growth

Insufficient domestic demand forced exports to surge

"If this year is not (steel) exports so popular, the domestic market may be even worse," said Xia Xiaokun, general manager of Shanghai Steel's Steel Business Unit.

In the first eight months of this year, China exported 56.83 million tons of steel, an increase of 35.4% year-on-year. Among them, steel exports in May and July were 8.07 million tons and 8.06 million tons respectively, which exceeded the 8 million tons mark and is a record high for single month exports.

As for the largest variety of steel products, China exported plated 26.583 million tons, 26.965 million tons, and 27.639 million tons respectively in 2011, 2012, and 2013. From January to July this year, China exported 23,372,700 tons of steel. , accounting for 85% of the total exports last year.

"This year's steel exports will surely record a record. In the first eight months, equivalent to crude steel, more than 60 million tons have been exported." Shi Hongwei, director of the Center for Economic Development Research at the Metallurgical Industry, said at the previous annual meeting of the 8th China Metal Sheet Industry Chain. The improvement of the world economic situation is one of the major reasons for this year's surge in exports.

Another big reason is the weak demand for domestic steel products. The data shows that in the first seven months of this year, China's apparent consumption of crude steel (ie, production plus net imports) increased by -0.3% year-on-year, and "rare" appeared to have dropped for the first time in recent years. Shi Hongwei said that this shows that domestic steel demand has gradually entered the arc-arc area.

Correspondingly, domestic steel prices have continued to fall. "My steel net" steel comprehensive price index shows that as of September 26, the index was 109.71, the lowest since January 2006; In addition, on September 25, the rebar ** 1501 main contract intraday low It was 2,538 yuan/ton, hitting a new low since its listing.

"The domestic pressure is too great. The new normality of the Chinese economy will continue. There are so many steel products. Although some problems can be solved through mergers, reorganizations, and environmental protection, the new capacity is still huge," Xia Xiaokun pointed out. The profits of steel exports are relatively poor. , "But there is no way, so you can go out, so that you can let the machine run."

Senior industry experts pointed out that last year China's crude steel production was actually 822 million tons, and domestic crude steel production capacity has actually reached 1.12 billion tons. Faced with overcapacity pressures, the increase in steel output this year will mainly depend on exports.

In the first seven months of 2014, the iron and steel industry completed a 8.3% year-on-year decrease in fixed asset investment. Shi Hongwei pointed out that this indicates that the expansion of steel production capacity has started to cool down.

“The pressure in the domestic market will allow companies to squeeze their heads to open up the market,” Xia Xiaokun said bluntly, now the enthusiasm of steelmakers to open up the international market is significantly higher than in previous years.

Double back pressure increase

"Pouring boron" unspoken rules are referred to as easy handles

While the surge in steel exports has increased, trade frictions faced by China have increased, and investigations into trade remedy measures such as anti-dumping and countervailing measures have continued.

People from the China Iron and Steel Association had previously stated that the sharp increase in steel exports since the beginning of this year has increased trade friction and has made it more difficult to respond. It is reported that in the first five months of this year, there were three anti-dumping investigations coordinated by the China Iron and Steel Association, three investigations of safeguard measures, two consultations before formal investigations, and three warning consultations.

“Many steel companies add boron to steel to obtain export tax rebates and gain export price advantage. Many steel mills in Southeast Asian countries, in particular, are very angry about this and have repeatedly appealed to us for resolution”, China Council for the Promotion of International Trade, Metallurgy Jiang Xicheng, deputy secretary-general of the branch of the industry, bluntly stated that during the process of responding to the international "double reverse", the "hidden rules" for domestic "plus boron" to obtain tax rebates have been criticized.

It is reported that China has cancelled the export tax rebate for Pu-Steel (that is, alloyed carbon steel), and export special alloy steel products can enjoy the preferential tax reduction policy, the tax rebate rate of 5% to 13%. According to the Customs Tariff, it was stipulated that steel products with a boron content of 0.0008% or higher could be declared as alloy steel, and they could enjoy the export tax rebate policy.

For this reason, some exporting companies have added boron to Pu steel, changed their face to the export of alloy steel products, and enjoyed export tax rebates. This has become the unspoken rules in the industry.

Jiang Xicheng pointed out that this unspoken rule can easily be blamed by other countries as "government subsidies" or "operational trade," which can easily cause trade frictions. However, he said that this issue has caused the attention of the relevant departments of the country and "will sooner or later be resolved."

Xia Xiaokun said that the current domestic steel exports are mainly achieved through certain price advantages, which are “extensive”. In the future, in order to sell steel products in the past, domestic companies will provide services such as processing and cutting. “There is still a lot of space for future exports. ".