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The increase in the cost of steel – a temporary trend

The Chinese government suggests that the observed increase in the cost of steel is a temporary trend. She is unable to resolve the problems of the metallurgical industry of the country. For this reason, further support for tax incentives for exporters. Accordingly not going anywhere, and the influx of Chinese steel products «on the cheap».

The Agency has stated that planning of the PRC, the recent trend to higher value slowed in may. However, it is a response to the needs of the Chinese market. This is especially true of the construction sector. So one can hardly expect long-term preservation. Demand growth is the result of efforts on the rapid completion of construction works. Investments in the construction sector began in the autumn-winter period. Also on the growth of the cost impact of the government’s efforts regarding the reduction of overproduction and inventory.

According to the Ministry of Finance of the PRC, we will continue to support policy discounts exports. The solution to the problem of overproduction requires an long-term plan. This part of the program needs to solve the problems of the steel and coal market. Also, the Chinese authorities intend to support the process of restructuring debts. The same applies to the consolidation of companies in these sectors. To maintain the coal sector requires low tax rates relative to the added cost. As to the sector of ferrous metallurgy, China long attempts to solve the problems of overproduction.

The last months leading countries-producers of steel produce pressure on China. It is expressed in the active purpose of anti-dumping duties. Anti-dumping investigations involving Chinese manufacturers, are gaining momentum. The us government collects from cold-rolled steel production of China customs duty. Its size is 266%. The European steel sector expects similar measures from the EU.

The European Commission is conducting investigations against China and Russia. We are talking about is suspicion of dumping the cost of some steel products. Already imposed sanctions on a special plate production in Russia, China, Japan and the United States. The reason was the complaints of the European manufacturers. In the last days of April Australia imposed tariffs against China, protecting domestic producers.

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