China’s VAT rebate move positive for steel cos

China has cut the VAT rebate, export rebate on a lot of steel products, longs and flats and even cold roll coils, which clearly means that they will export less into countries like India. That is unambiguously positive for the steel companies.

The Indian steel companies benefit in two ways. One, the pressure of Chinese imports goes down with this some what and the fact that rebates are being cut, probably means that global steel prices will edge up a little bit because it is China.