The removal of export tax rebates will undoubtedly worsen the already grave situation in domestic steel market. Ordinary hot rolled coil and general steel plate accounted for 8% of 28.6% of China's steel product exports in the past. It is believed that unexpected price cut by Baosteel and subsequently policies to scrap export tax rebates not only were a result of market needs, but also reflect government's policy direction on the steel industry. Going forward China will curb soaring raw material prices by controlling total outputs and prices. The move matches the country's energy saving and environment protection strategy, and fights back over iron ore price pushes initiated by foreign iron ore manufacturers. Presently, major international iron ore enterprises ask for an additional 23% increase in the 3Q iron ore FOB price.
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