China has sent shockwave through global steel markets by making its long-rumoured abolition of export tax rebates official. The impact in the short term is to drive prices higher, but the deeper impact may only
be felt once global steel markets cool down. 

Kallanish meanwhile held its annual Asia Steel Markets conference last month, and in this issue we bring you some of the highlights.

The announcement by the Ministry of Finance on 28 April that China would remove VAT rebates on almost all steel exports has sparked widespread market disruption despite being widely anticipated. The removal of rebates affects 146 HS codes which were previously mostly enjoying a refund of the full 13% VAT on export. These products mainly include carbon steel cold-rolled sheets, coated non-alloy steel sheets, non alloy bars and wire rods, coated non-alloy wire rods, hot-rolled stainless steel coil, sheets and plates, cold rolled stainless steel coil, sheets and plates, stainless steel bars and wire rods, alloy-added hot-rolled coil, plates, alloy-added cold-rolled plates, coated alloy-added steel sheets, hot-rolled non-alloy and alloyadded rebar and wire rod, carbon and stainless steel pipes and sections. Customs data shows that in 2019 China exported 44.19 million tonnes of products to overseas markets under the HS codes which have had their rebates cancelled, down 6.08% year-on-year. This figure, then fell by 15.58% y-o-y to 37.31mt in 2020. In the first quarter of this year, export markets have performed better amid the global economic recovery. The export volume was 12.86mt with an increase of 29.78% y-o-y, exceeding the levels in the same period of the past three years.