CISA is making sense to me:
MOSCOW: China will likely decrease steel exports in 2015 following the cancellation this year of export incentives such as tax rebates, a China Iron Ore and Steel Association (CISA) official said yesterday.
“China does not plan to expand steel exports significantly. Next year we forecast that the Chinese exports will decrease compared with this year,” CISA deputy secretary-general Chi Jingdong said at the Worldsteel conference in Moscow.
China, capable of producing 1.1 billion tonnes of steel a year, boosted steel exports significantly in 2014, mainly due to the government’s preferential policies, including tax rebates for some steel products, Chi said.
China will produce around 830 million tonnes of steel this year and around the same amount next year, Chi added.
Battling with overproduction and the environmental impact of its steel industry, China is trying to reduce steel capacity by 100m tonnes in the near future, including 80m tonnes this year, Chi said.
Chinese steel exports surged by 10m tonnes for the eight months from January to August this year to around 14.8m tonnes, in part due to a recovery in global demand, he said.
“We think that it’s unrealistic to increase exports to resolve the issue of overcapacity in China,” Chi said.
“We think that tax rebate abolishment will have some impact on the enthusiasm of some Chinese steel companies and reduce their exports.” He added that the performance of Chinese steel mills will be better in the second half of this year compared to the first half because of decreasing production costs due to falling iron ore and coal prices. “The profits of steel companies, however, are still small as steel prices are at a very low level,” he said.
