Chinese steel rebar and hot-rolled coils futures rose on Thursday after Beijing announced adjustments on tax and tariffs for some ferrous products to support domestic crude steel production cut.
The country’s finance ministry said on Wednesday that export tax rebates for 146 steel products will be cancelled from May 1. It also exempt temporary import tariffs for some primary steel products and hiked export tariffs for ferroalloys as well as high-purity pig iron.
The measures, aiming to secure more steel resources at home and to curb iron ore prices, are seen as preparations to support more policies on curtailing domestic steel output.
“It suggested the urgency and necessity of the launch of major policies... and government’s confidence on cutting production,” CITIC Securities said in a note, adding that trade volumes still affected by price spread with overseas market but long-term impacts are profoundly.
The most-traded construction rebar on the Shanghai Futures Exchange, for October delivery, rose 1.5% to 5,426 yuan ($839.03) a tonne as of 0215 GMT.
Hot-rolled coils, used in the manufacturing sector, jumped 1.7% to 5,780 yuan a tonne.
“We still believe the reasonable steel prices, take hot-rolled coils as example, should be at 6,000-6,500 yuan per tonne,” CITIC Securities’ analysts said.
Benchmark iron ore futures on the Dalian Commodity Exchange , for September delivery, inched 0.8% higher to 1,145 yuan per tonne.
Spot prices of iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62 declined $1 to $193.5 a tonne on Wednesday, according to SteelHome consultancy.
“The new policy settings will likely weigh on China’s iron ore demand as economic incentives to use more imported scrap steel have increased,” analysts with Commonwealth Bank commodities wrote in a note.
Other steelmaking ingredients were mixed, with coking coal dipping 0.1% to 1,763 yuan a tonne while coke up 1.3% to 2,711 yuan.
Shanghai stainless steel futures slipped 0.4% to 14,470 yuan per tonne.
Source : https://www.reuters.com/article/asia-ironore