Chinese Steel futures have dropped by 1.5% this morning post removal of export rebate on Boron added steel w.e.f 1st Jan’15; prices were at USD 412/MT. Trade analysts believe this would result in 25-30% low exports from China this year. During the first 11 months in 2014, China exported 83-84 MnT Steel. Out of this, about 30-35% was Boron added steel.
” It was expected that government will remove rebate on export of boron added Steel. Now, exports may come down by 25-30% in 2015. Exports of Boron added Wire Rod and Rebar constituted to about 35% of the total,” said Mr Hudson, an Iron and Steel trader based in China.
Global Iron ore prices under pressure
Seaborne Iron ore prices are likely to come under pressure in upcoming weeks amid lower exports from China. Global Iron ore prices have already corrected to 5-1/2 years low to USD 67/MT for Fe 62% Iron ore fines.
Indian Steel Industry to Benefit
Indian Steel industry will benefit to some extent as import of Rebar and Wire Rod may come down. Total import of Wire Rod and Rebar accounted for 0.96 MnT in FY 15 (till Nov’14).
Indian Steelmakers have been lobbying against rising imports of Rebar and Wire Rod from China. Considering this, Indian government has made quality assurance (BIS norms) mandatory on imported products.
Boron content steel products included 4 specifications i.e. HR plates with thickness larger than 600 mm, HR plates with thickness less than 600 mm, irregular wound coils and bars, long products formed by Boron content steel. All the specifications of steel products mentioned are at zero.
| Tariff No. | Commodity | Export Refund Rate (%) | |
| Earlier | Now | ||
| 7225409100 | Plate wide 600MM+ with B | 13 | 0 |
| 7226919100 | Plate wide -600MM with B | 9 | 0 |
| 7227901000 | Hot rolled alloy rod/strip in coil with B | 9 | 0 |
| 7228301000 | Hot rolled alloy rod/strip with B | 13 | 0 |
India Import of Bar and Rods till Nov’ 2014
| Month | Alloy Steel | M-o-M Change | Non-Alloy steel | M-o-M Change | Total (Alloy & non-Alloy) Steel Imports | M-o-M Change |
| Apr’14 | 21,560 | 0 | 25,210 | 0 | 46,770 | 0 |
| May’14 | 32,070 | 49% | 34,580 | 37% | 66,650 | 43% |
| Jun’14 | 8,230 | – 74% | 45,970 | 33% | 54,200 | – 19% |
| Jul’14 | 14,380 | 75% | 73,090 | 59% | 87,470 | – 61% |
| Aug’14 | 44,040 | 206% | 64,450 | – 12% | 108,490 | 24% |
| Sep’14 | 23,490 | – 47% | 131,500 | 104% | 154,990 | 43% |
| Oct’14 | 61,600 | 162% | 142,300 | 8% | 203,900 | 32% |
| Nov’14 | 140,440 | 128% | 99,200 | -30% | 239,640 | 18% |
| Total | 345,810 | 616,300 | 962,110 |
Source: JPC-Ministry of Steel, India
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