Entering August, the adjustment of export tariffs on some steel products has made many investors more concerned. Aside from the investment strategy of the capital market, more people are still concerned about what this policy will bring to Shanxi’s economic development?
Our province’s steel exports have decreased
Starting from August 1, 2021, my country has appropriately increased the export tariffs on ferrochrome and high-purity pig iron, and after adjustments, the export tariff rates of 40% and 20% will be implemented respectively. In addition, starting from August 1, 2021, export tax rebates for 23 steel products will be canceled.
Specifically in Shanxi, the reporter learned from Taiyuan Customs that in the first half of 2021, Shanxi’s steel exports decreased by nearly 20%. According to statistics from the customs, in the first half of 2021, Shanxi Province exported 388,000 tons of steel products, a decrease of 19.1% over the same period last year, and the value of goods was 3.62 billion yuan, a decrease of 15.9%.
In June, the province’s steel exports were 67,000 tons, a decrease of 12.4%, and the value of goods was 810 million yuan, an increase of 18.4%. In the same period, the import value of various metal mines and ore sands in our province increased by 94.5%, the import value of ferroalloys increased by 58.1%, and the import value of nickel and its products increased by 3.1%.
Thanks to TISCO’s leading position in the main stainless steel industry, TISCO, and other steel companies import a lot of chromium and nickel every year to improve the strength, toughness, wear resistance, and corrosion resistance of stainless steel. Therefore, our province imports every year. The number of the above products is considerable.
On the other hand, on May 1, 2021, my country will implement a zero-import tentative tax rate policy on pig iron, crude steel, recycled steel raw materials, ferrochrome and other products. High-quality development.
TISCO’s stock price is rising
The adjustment of steel tariffs, reflected in the capital market, is the rise in the stock prices of related companies.
As early as the end of June, due to TISCO’s special steel and the “Belt and Road” central enterprise state-owned reform concept, there was a lot of institutional participation. Within more than a month, the stock price of TISCO Stainless rose steadily, and the closing price on June 30 was 7.49 yuan. On the morning of August 12, the market closed at 10.08 yuan, an increase of 7.12%. It has already broken through the previous high, with an increase of 35%, and outperformed about 70% of the stocks.
The performance of TISCO Stainless has made investors happier. Zhao Feng, an investment consultant at Datong Securities, said that the tariff policy adjustment can be understood as not recommending exports. The reason is that the country’s response to changes in the prices of bulk commodities and iron ore can be understood as favorable to Taiyuan Iron and Steel. The overseas exports of large steel companies are basically long-term price agreements. In connection with the carbon-neutral policy and the domestic and international situation, the adjustment of tariff policy has a relatively large impact on small and medium-sized steel companies.
Xiao Zhao of the Taiyuan Sales Department of Huaan Securities said that the increase in steel export tariffs and the abolition of export tax rebates for some steel products are mainly aimed at reducing the domestic steel production capacity. The steel industry no longer pursues exports but meets domestic demand, forcing companies to increase high-value-added production capacity.
For iron and steel companies, there will be pains, companies need to phase out outdated production capacity, which is consistent with the country’s low-carbon emission reduction policy. Secondly, whether an enterprise can stand out depends on the adjustment of production capacity strategy.
Xiaojing Shanxi Securities, the reporter’s account manager, believes that steel companies are already restricting production in the context of carbon neutrality. In the medium and long term, the stock price of steel companies is expected to rise, and this part of the price increase will eventually be passed on to downstream companies.
Mr. Shi of Great Wall Securities said that although the impact of tariff adjustments is relatively limited from the quantitative analysis of data, the policy orientation is more obvious, further demonstrating the country’s willingness to reduce crude steel output. The newly introduced tariff adjustment measures are in line with my country’s iron and steel industry’s industry positioning of “mainly satisfying domestic demand and not export-oriented”, and further strengthened the national policy orientation.
It is also a supporting policy for the domestic reduction of crude steel output, which will guide exports to a certain extent. The return of resources to the country can better meet the needs of the domestic market, which is conducive to the transformation of the steel industry to high-quality development.
How should steel enterprises in the province adjust their pace?
Shanxi is a large traditional energy province in China. In the past industrial development, it has a certain position in steel production by virtue of its geographical resource advantages. Steel raw materials and products also occupy a dominant position in the province’s import and export business.
Our province’s steel exports are mainly stainless steel flat-rolled products, the main export destinations are my country’s Taiwan, Saudi Arabia, and ASEAN. In the first half of the year, exports to Japan increased by 14.6%. The export enterprises are mainly state-owned enterprises, with the export of state-owned enterprises accounting for 79.2%, the export of private enterprises accounting for 19.8%, and the export of foreign-invested enterprises accounting for 1.0%.
The impact of the adjustment of the steel taxation policy on our province’s steel enterprises and the development of our province’s import and export trade should not be underestimated. Wen Xiaoguang, Chief of the Tariff Section of the Second Office of Taiyuan Customs, said: “The recent domestic adjustments to the tariff rates of raw materials and products for steel production have their inherent logic. While the preferential export tax rate policy has been reduced, the provisional import tax rate is zero.
Policies are also helping steel companies reduce production costs and expand imports of steel resources. The price of iron ore is currently at a high level in recent years. This series of tax rate adjustments aim to balance the domestic supply and demand gap and promote the transformation and upgrading of the steel industry and high-quality development.”
Wang Xianghuai, secretary-general of the Shanxi Nonferrous Metals Industry Association, said that the country’s adjustment of steel tariffs in the international environment should be made in accordance with changes in the international and domestic situations. From the perspective of production and import and export in the first half of the year, crude steel continued to grow, and steel exports hit a record high.
To adjust tariffs, one is to appropriately curb a large amount of exports. Second, under the background of the development of the international epidemic, the global steel production capacity is under-started. After China’s tariff adjustment, market demand will remain unchanged and export prices will be high, but this will naturally be passed on to foreign importing countries and importers, and the exports of Chinese steel companies and Shanxi steel companies will not be greatly affected.
The reporter also consulted relevant persons in Taiyuan Iron and Steel. It is understood that the policy adjustment does have an impact on the company’s current production direction. After all, the export tax rebate has been reduced, and some steel products are exported at the original price, and the profit is reduced. Although domestic steel products are still competitive in the international market in terms of price, the introduction of this tariff adjustment policy demonstrates the country’s determination to reduce crude steel output.
As a company, it must actively adapt to the development of the steel industry. Trends, strive to expand the domestic market and achieve their own industrial upgrade. All in all, for enterprises, it is necessary to keenly grasp the trend of national policies, clarify the trend of industrial upgrading, keep up with the opportunities of reducing import costs, and actively participate in the domestic market.
In a series of interviews, whether it is a brokerage or a steel company staff, or even a customs staff, everyone agreed that as the world’s largest steel producer and consumer, the adjustment of steel taxation policies will have a significant impact on the development of related industries in our country, especially in our province. Since the beginning of this year, as major production companies resume work and production, steel demand has grown strongly.
The introduction of a series of policies will help alleviate the problem of insufficient supply of steel resources in my country’s domestic production and construction. Helpful. Iron and steel enterprises in our province should seize this opportunity, adapt to the development direction of the country, realize self-improvement, and further develop towards high quality on a solid foundation.
(Source: Shanxi News Network)