What is the impact of tariff adjustments on steel products?

The State Council Tariff Commission’s “Announcement on Adjusting Tariffs on Certain Steel Products” stated that in order to better protect the supply of steel resources and promote the high-quality development of the steel industry, with the approval of the State Council, the State Council’s Tariff Commission recently issued an announcement, effective May 1, 2021 Beginning to adjust the tariffs on some steel products. Among them, the zero import tariff rate for pig iron, crude steel, recycled steel raw materials, ferrochrome and other products is implemented; the export tariffs for ferrosilicon, ferrochrome, high-purity pig iron and other products are appropriately increased, and the export tax rate of 25% and 20% are respectively implemented after adjustment. % Temporary export tax rate, 15% temporary export tax rate.

Crude steel output is still growing positively year-on-year. To achieve negative growth throughout the year, a larger-scale production reduction action is required in the later stage. In view of the continuous growth of demand but the imminent reduction of crude steel output, guiding the adjustment of imports and exports is a favorable means, and the tax rebate for steel exports is cancelled, thereby leading the reform of imports and exports in the medium and long-term dimensions. However, the mismatch between overseas supply and demand is more serious this year, and the effect of the abolition of short-term tax rebates is expected to be more effective.

The general direction of the supply side decline in the steel industry remains unchanged. Signs of short-term marginal weakening of demand for building materials and high spot prices affect the pace of supply contraction. Continue to pay attention to the possibility of post-term production tightening policies and peak demand peak seasons. At the same time, spot and futures Profit per ton of steel remains high. In the long run, the company's profitability will rebound and it is expected to continue to be realized in the interim report. Pay attention to the substantial improvement of the industry's supply and demand pattern by the follow-up production restriction policy.