China is removing export taxes on steel products from 1 January 2018, the Tariff Department of the Ministry of Finance announced on 15 December. China charges 10%-15% export tax on some finished steel products including steel bars, coils and wire rods.

The announcement explains the move aims to adjust the policy to recent changes in both the industry and in trade flows over the past year. Export taxes for steel semis will also be reduced to some extent in 2018.

The circular notice however reveals no details of the tax reductions and makes no mention of tax rebates. Currently China also charges 17% VAT on exports but gives 5%-13% rebates on exports of some steel products, Kallanish notes.

Over January to November Chinese steel product exports shrank by -30.7% year-on-year to 69.83 million tonnes. That compares with many estimates at the start of the year of around 100mt of steel exports.

China announced in December 2016 that it would reduce export taxes on carbon steel ingots, billet and slab from 20% to 15% in 2017. It also removed a 20% export tax on nickel pig iron and cut taxes on stainless ingots, alloy-steel ingots, stainless billets, slab and stainless-alloy billets/slab from 15% to 10%. This failed to stop the rapid slide of Chinese steel product exports this year. Whether further tax cuts will stabilise long product exports remains to be seen.