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Taxes cut in effort to lift exports

June 23, 2009

CHINA will reduce or eliminate export taxes on nearly 100 categories of goods including some agricultural products and fertilizers starting next month in its latest move to help the country’s flagging trade sector.
The cuts are the first outright tax reductions since December 2008 and follow seven increases in export tax rebates since August.
While the policies give at least some relief to the nation’s struggling exporters, they contribute little to fixing the main problem: restoring external demand, industry analysts said.
The Ministry of Finance said yesterday that 31 types of goods such as wheat, rice and soya beans will be exempted from export taxes starting July 1.
Direct, effective
Large tax reductions will apply to another 60 categories of products, including fertilizer and chemicals. The tax on phosphate fertilizer, for instance, will be cut from 75 percent to 10 percent.
“The move, similar to the previous increases in export tax rebates, is an obvious bid to counter the falling trade,” said Xue Jun, an analyst at Changjiang Securities Co. “A tax cut is more direct and effective than rebates and enhances cash flow.”
A tax cut is immediate, while exporters have to wait to receive a tax rebate.
“The frequency of these moves illustrates that the Chinese government still attaches great importance to exports, though domestic demand is considered key to the country’s economic recovery,” Xue said.
China’s May exports fell 26.4 percent from a year earlier to US$88.8 billion, the worst drop in at least 14 years. Last month, China announced it would raise tax rebates on more than 600 types of exports, including machinery, toys, plastic products and steel. Total rebates amounted to 102.9 billion yuan (US$15.1 billion) in the first quarter, up 18.4 percent from a year earlier.
Vice Commerce Minister Zhong Shan said China will spare no effort to protect the country’s share of the global market.
“China’s trade will suffer a retreat this year and experience slow growth in the coming years,” Zhong said in an article published in the Economic Daily yesterday. “We should go all out to stabilize trade. The focal point should be to avoid losing share in the global market. It is of great importance to keep companies alive and make jobs available, which lays the foundation for the expansion of domestic demand.”
Despite falling volume, Zhong said it may be possible for China to raise its share of global trade.
He said Chinese exports last year accounted for 8.86 percent of the world’s total exports in terms of value, still below the level of export giants Germany and the United States, which each hold around 12 percent of global market share.
At a time when people are slashing spending, China should be able to benefit because the country sells more necessities than luxuries.
CHINA will reduce or eliminate export taxes on nearly 100 categories of goods including some agricultural products and fertilizers starting next month in its latest move to help the country’s flagging trade sector.
The cuts are the first outright tax reductions since December 2008 and follow seven increases in export tax rebates since August.
While the policies give at least some relief to the nation’s struggling exporters, they contribute little to fixing the main problem: restoring external demand, industry analysts said.
The Ministry of Finance said yesterday that 31 types of goods such as wheat, rice and soya beans will be exempted from export taxes starting July 1.
Direct, effective
Large tax reductions will apply to another 60 categories of products, including fertilizer and chemicals. The tax on phosphate fertilizer, for instance, will be cut from 75 percent to 10 percent.
“The move, similar to the previous increases in export tax rebates, is an obvious bid to counter the falling trade,” said Xue Jun, an analyst at Changjiang Securities Co. “A tax cut is more direct and effective than rebates and enhances cash flow.”
A tax cut is immediate, while exporters have to wait to receive a tax rebate.
“The frequency of these moves illustrates that the Chinese government still attaches great importance to exports, though domestic demand is considered key to the country’s economic recovery,” Xue said.
China’s May exports fell 26.4 percent from a year earlier to US$88.8 billion, the worst drop in at least 14 years. Last month, China announced it would raise tax rebates on more than 600 types of exports, including machinery, toys, plastic products and steel. Total rebates amounted to 102.9 billion yuan (US$15.1 billion) in the first quarter, up 18.4 percent from a year earlier.
Vice Commerce Minister Zhong Shan said China will spare no effort to protect the country’s share of the global market.
“China’s trade will suffer a retreat this year and experience slow growth in the coming years,” Zhong said in an article published in the Economic Daily yesterday. “We should go all out to stabilize trade. The focal point should be to avoid losing share in the global market. It is of great importance to keep companies alive and make jobs available, which lays the foundation for the expansion of domestic demand.”
Despite falling volume, Zhong said it may be possible for China to raise its share of global trade.
He said Chinese exports last year accounted for 8.86 percent of the world’s total exports in terms of value, still below the level of export giants Germany and the United States, which each hold around 12 percent of global market share.
At a time when people are slashing spending, China should be able to benefit because the country sells more necessities than luxuries.
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Chinese steel import volume continue to drop in 2008

February 9, 2009

Statistics by Customs of China show that total Chinese steel import tonnage reached 154.2 million tonnes in 2008 down by 8.6%YoY. Import value was USD 23.43 billion, an increase of 14%YoY.

China’s steel imports in 2008 is characterized by following five aspects

1) December steel import volume was below one million ton, the lowest since January 2002. The average monthly steel import tonnage was between 1.3 and 1.6 million ton during 2007 and the H1 2008. Import volume is on the decrease since steel makers are adding new steel capacity and economy crisis has led to evident drop in steel consumption.

2) Imports through common trade were down slightly and those through processing trade take more than 50% of total volume. The tonnage through common trade in 2008 totaled 6.47 million tonnes down by 3.5%YoY and taking 42% of total imports, which compares 54.4% for those through processing trade.

3) Japan, South Korea and Taiwan are mainly suppliers in 2008. Import volume from Japan, South Korea and Taiwan was 7.03 million ton, 3.55 million tonnes and 2.48 million tonnes accounting for 45.6%, 23% and 16.1% respectively of total imports.

4) Flat steel import volume saw evident decrease, while those for steel pipe and tube and hollow profiles surged. Steel flats import volume dropped by 10% to 12.73 million ton, steel pipes and tubes and hollow profiles jumped by 37.1% to 1.06 million ton. While those for bar rods and bars were 0.96 million tonnes down by 9.6%.

5) Guangdong, Jiangsu and Shanghai took more than 60% of imports.

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Chinese steel imports hit 7 year low in December

February 9, 2009

Xinhua quoted data released by the General Administration of Customs shows that China imported less than one million tonnes of steel products in December 2008, the lowest monthly figure in seven years as economic downturn sapped demands.

Customs data showed that the imports have posted drastic slump since mid-2008 as the global financial crisis began to hurt the real economy. Only 929,000 tonnes were imported in December, sharply down from the 1.44 million tonnes in July and 30.4% less from a year ago.

A total of 15.43 million tonnes of steel products were imported last year, down by 8.6%YoY. The imports value grew 14% to USD 23.43 billion.

(Source: Xinhua)

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Chinese steel price recovery may be short lived

February 7, 2009

China Securities Journal reported that market participants are concerned that recent steel price recovery may be short lived since the real steel demand remains slack, although the price rally has extended for ten straight weeks supported by stimulus package and production cut.

As many mills have restarted production in light of price improvement, maybe an overreaction by speculative buyers, which would again put the steel price under downward pressure.

The demand plunge has yet to reverse, and recent price recovery is the result of larger scale of production cut than the demand reduction, which has restored the market balance for the short term. However, the construction activity especially housing market continues to shrink, while many companies have slashed the capital spending significantly for the New Year, which would all suppress the steel demand.

Mr Matao Bohai Securities analyst said down-stream demand may not be that healthy as indicated by the rebounding steel prices. Leading mills have raised up the offer price around Jan in response to the price improvement and they are eager to offset the heavy loss in past months. Meanwhile, trading houses are more willing to restock at the moment. Nevertheless, most are more bearish on long products outlook on back of limited capacity addition and infrastructure oriented stimulus package.

The stimulus package is expected to provide a real demand boost for long products. Therefore, long products price is estimated to held steady or edge upward in days to come.

The steel output grows 15.4% from the month before in December of this, long products output expands 21.8%, while flat products production merely rises 9.97%. Market insiders warn that swelling supply of long products could weigh on prices downward since most sheet producers can readily switch to longs production.

Source: China Securities Journal

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Uses of Chromium

February 6, 2009

In metallurgy, to impart corrosion resistance, create a shiny finish, or increase hardness:

-    as an alloy constituent, such as in stainless steel
-    in chrome plating
-   chromic acid is used in some anodizing processes
As dyes and paints:
-   Chromium(III) oxide is a metal polish known as green rouge.
-   Chromium salts color glass an emerald green.
-   Chromium is what makes a ruby red, and therefore is used in producing synthetic rubies.
-    also makes a brilliant yellow for painting

  • As a catalyst.
  • Chromite is used to make molds for the firing of bricks.
  • Chromium salts are used in the tanning of leather.
  • Potassium dichromate is a chemical reagent, used in cleaning laboratory glassware and as a titrating agent. It is also used as a mordant (i.e., a fixing agent) for dyes in fabric.
  • Chromium(IV) oxide (CrO2) is used to manufacture magnetic tape, where its higher coercivity than iron oxide tapes gives better performance.
  • In well drilling muds as an anti-corrosive.
  • In medicine, as a dietary supplement or slimming aid, usually as chromium(III) chloride, chromium(III) picolinate, chromium(III) polynicotinate or as an amino acid chelate, such as chromium(III) D-phenylalanine.[7]
  • Chromium hexacarbonyl (Cr(CO)6) is used as a gasoline additive.
  • Chromium boride (CrB) is used as a high-temperature electrical conductor.
  • Chromium(III) sulfate (Cr2(SO4)3) is used as a green pigment in paints, in ceramic, varnishes and inks as well as in chrome plating.
  • Chromium(VI) is used in the post Ballard preparation of Gravure (rotogravure) printing Forme Cylinders. By electroplating the metal onto the second coat of copper (after the Ballard skin), the longevity of the printing cylinder is increased.
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