According to Metal Expert:

Chinese HRC exporters will get benefits from the government on Friday, as 10% tax rebate will be increased to 13%. As a result, they will be able to compete more successfully with other Asian sellers. Wire rod export is also likely to improve soon.

On March 17, Ministry of Finance of People¡¯s Republic of China announced an increase in partial tax rebates for export of 1,084 items to 13%, starting from March 20. The refund, in fact, will not be partial in the future, since VAT is 13% in the country now. In a list for lifting the rebate to 9% are 380 more items.

Specifically, tax refund for HRC export will be increased from 10% to 13%. Taking into account the current offers in a range of $455-480/t FOB (SS400, 3-12 mm coils), low-end price can be lowered to $442/t FOB with no impact on mills¡¯ margins. Such measures are very timely, since Indian and Japanese competitors are quite aggressive in Vietnam, the main sales outlet for Chinese exporters, market insiders told Metal Expert. Mills and traders have not changed their offers yet. ¡°It is a very fresh news. We have to discuss our new prices inside the company on Wednesday,¡± a major Chinese steelmaker told Metal Expert. ¡°However, it seems we should lower the price,¡± he added. Latest Japanese and Indian offers (SAE1006, 2 mm) were heard in Vietnam at $460-465/t CFR and $455-457/t CFR, while Chinese suppliers refused to go below $470/t CFR, which affected their competitiveness.

Tax rebate for Cr-added wire rod will also be increased to 13%, which is likely to make the Chinese price more competitive, but suppliers doubt if they can get more orders because of that. ¡°We may drop our offer below rivals¡¯ ones, but demand abroad is too slow now, especially taking into account the closed Philippine market,¡± the key Chinese wire rod maker and exporter told Metal Expert.

Billet suppliers will not get any benefits, as the tax rebate for square bars was already 13%. CRC and HDG exporters are in the same conditions and the recent measures will not have any influence on their business.