It was rumored that China will decrease its export tax rebate on steel products; however, the policy hasn’t been finalized. Market participants said that the adjustment of the export tax rebate was likely to be implemented in May, and the steel market prices were expected to rise accordingly.

According to market participants, if the export tax rebate on hot-rolled steel is reduced from 13% to 9%, the competitiveness of the companies that have been selling at low prices will indeed decline, especially for the export in surrounding areas. 30% of the export will be impacted, which is about 1.4 million to 1.8 million tons per year.

If the export tax rebate is cut from 13% to 0%, most of the export business will be affected, with an overall impact of above 90% and an annual impact of 7 million to 7.5 million tons. Therefore, China’s hot-rolled steel prices will surge due to the policy.