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Steel price continue to rise crazily in China

May 11,2021

Steel price continue to rise crazily in China

Recently, steel prices have continued to rise and have risen crazily. The main reasons are as follows:

Firstly. As we all know, on April 26, the Ministry of Finance of the People’s Republic of China issued an announcement on the cancellation of export tax rebates for certain steel products. The content of the announcement is as follows:

From May 1, 2021, the export tax rebate for some steel products will be canceled. See the attachment for the specific product list. The specific execution time shall be defined by the export date indicated on the export goods declaration form.

As soon as the policy came out, all steel companies were in an uproar, which meant that the price to customers would increase by 13 percents in the future. This is a very important reason for the recent price increasing.

Secondly. Statement by the National Development and Reform Commission on the indefinite suspension of all activities under the China-Australia Strategic Economic Dialogue Mechanism.

China is highly dependent on Australia’s iron ore demand. The suspension of trade between China and Australia has caused a shortage of domestic iron ore supply and soaring prices, which has led to a continuous increase in steel prices.

Thirdly. In response to climate change, our country has put forward a solemn goal commitment such as “striving to reach the peak of carbon dioxide emissions by 2030 and striving to achieve carbon neutrality by 2060″. In this year’s government work report, “Do a good job in carbon peaking and carbon neutrality” was listed as one of the key tasks in 2021;

By compressing crude steel output, transforming and upgrading, to significantly reduce carbon dioxide emissions. Insufficient supply of raw materials has led to price continue increasing.

Finally. The recent depreciation of the U.S. dollar has also indirectly increased export prices.