Steel industry to meet the heavy policy.
The Tariff Commission of The State Council has adjusted tariffs on some steel products since May 1, according to the Website of the Ministry of Finance. At the same time, the Ministry of Finance and the State Administration of Taxation issued a notice on the cancellation of export tax rebates for some steel products.
The analysis shows that in order to make up for the supply gap caused by the decline of domestic crude steel production, the country cancelled the export tax rebate policy of some steel varieties. China exports 60-70 million tons of steel a year, and the removal of tax rebates could cause more than half of the steel to be repatriated, or cool the steel market.
Some steel products adjust tariffs and cancel
The State Council Tariff Commission “on the adjustment of part of the steel product tariff announcement” said, in order to better ensure the supply of steel resources, promote the high-quality development of the steel industry, approved by The State Council, The State Council Tariff Commission recently issued a notice, from May 1, 2021, adjustment of part of the steel product tariff. Among them, zero import temporary tariff rate will be implemented for pig iron, crude steel, recycled steel raw materials, ferrochrome and other products; Export tariffs on ferric silicon, ferric chromium, high purity pig iron and other products shall be appropriately raised, and export tariff rates of 25%, 20% and 15% shall be implemented respectively after adjustment.
The Ministry of Finance and the State Administration of Taxation issued a notice on the cancellation of export tax rebates of some steel products, said that from May 1, 2021, the cancellation of export tax rebates of some steel products. The specific execution time shall be defined by the export date indicated on the export declaration form.
The Tariff Commission of The State Council said that the adjustment measures will help reduce the import cost, expand the import of steel resources, support the reduction of domestic crude steel output, guide the steel industry to reduce the total energy consumption, and promote the transformation and upgrading of the steel industry and high-quality development.
What is the impact of the elimination of export tax rebates for steel?
In early April, the National Development and Reform Commission and the Ministry of Industry and Information Technology on the 2021 steel overcapacity “look back”, crude steel output reduction and other work to study deployment. In 2021, the crude steel output reduction work will focus on reducing the crude steel output of enterprises with poor environmental performance, high energy consumption and relatively backward process and equipment level, so as to avoid “one size fit all” and ensure the realization of a year-on-year decline in the national crude steel output in 2021.
In addition, since Last December, the Ministry of Industry and Information Technology has repeatedly mentioned that the steel industry production reduction is an important measure to implement the “carbon peak, carbon neutral” target.
Cisa data shows that in the first ten days of April 2021, the key statistics of steel enterprises produced a total of 22.733,300 tons of crude steel. The average daily production of crude steel was 2.7739 million tons, up 2.88% month-on-month and 16.86% year-on-year.
Citic Construction investment research report that up to now crude steel output is still positive year-on-year growth, to achieve negative growth for the whole year, the later need to cut production on a larger scale. In view of the continuous growth of demand, but the reduction of crude steel output is imminent, the adjustment of import and export is a favorable means to guide the elimination of steel export tax rebate, so as to guide the reform of import and export in the medium and long cycle dimension. However, the mismatch between overseas supply and demand is more serious this year, and the effect brought by the cancellation of short-term tax rebates is expected to be more effective.
The “Crazy Rock” iron ore index hit an all-time high
Global steel prices have continued to rise since November last year. The platts 62% iron ore Index, the most representative Chinese ore price index, reported a record high of 193.65 dollars on April 27.
The reason why the price of iron ore record highs, with steel mills high demand, crude steel prices remain high. Steel inventories continued to fall into the second quarter. Wang Yangwen, manager of s&p’s iron ore index, told China Business News that in addition to strong Chinese demand, the global macroeconomic recovery has also boosted steel demand outside China, boosting overall steel production and iron ore consumption. China’s iron and Steel Association said yesterday that effective measures should be taken to step up the development of iron ore at home and abroad, improve the steel industry’s ability to guarantee resources and curb the momentum of rising iron ore prices.
The performance of steel stocks is good, the plate investment is cost-effective
From the overseas steel production in March, the average daily molten iron decreased, the average daily crude steel recovery slowed down, and the overall overseas steel supply slowed down. In March, domestic iron ore imports increased by 18.85% year on year, and the supply and demand of raw materials continued to improve. Last Wednesday, the gross profit per ton of large products increased from the previous quarter, and the profits of hot and cold rolled products continued to be high. Overall, in the stable steel price expectations, steel products gross margin will maintain a high level, steel profits back to high. Under the policy of monetary stability, the low valuation of steel stocks, high dividend yield, making the plate investment cost performance is higher, better defensive. It is suggested to continue to focus on relevant companies with high dividend rate and companies producing high-end cold rolling series products.
Steel industry supply side down direction invariable, the short-term marginal signs of weaker demand building materials with high spot prices affect the rhythm of the supply contract, continue to pay attention to later period limit production with strict policy and the possibility of a peak season for peak demand, meanwhile, tons of steel stocks and futures profits remain high, in the long term corporate profits rebounded certainty is strong, and is expected to continue to cash center daily news, Pay attention to the substantial improvement of the industrial supply and demand pattern by the subsequent production restriction policy. It is recommended to increase the proportion of plate, improve profitability and increase production with high certainty.
Transferred from: China Business Network