Repeating The 'steel Export Emergency Brake', Export Licenses May Only Be The Beginning

Repeating The 'steel Export Emergency Brake', Export Licenses May Only Be The Beginning

The steel industry is once again showing signs of regulation.

Recently, several steel companies have reported that relevant departments are strengthening the management of steel product exports, and the application for export licenses for some varieties has become stricter. This measure reminds industry insiders of the "steel export emergency brake" two years ago.

In 2021, in order to meet the domestic "dual carbon" target and reduce crude steel production requirements, China implemented a series of regulatory measures on steel exports. In May of that year, some export tax rebates for steel products were cancelled; In August, further adjustments will be made to the export tariffs on steel products. These policies combined resulted in a significant decline in steel exports in the second half of 2021.

Does the strengthening of export license management now mean the beginning of a new round of regulation?

The hidden concerns behind export data

The latest data from the General Administration of Customs shows that in the first four months of this year, China's cumulative export of steel increased by 24.5% year-on-year. This growth momentum contrasts with the slowdown in domestic demand.

The overseas market has strong demand and obvious price advantages, so companies are naturally willing to export more, "said a steel company executive who declined to be named." However, a large amount of exports may lead to tight domestic supply and affect downstream industry costs

Industry insiders analyze that in the current context of stable growth, ensuring stable domestic steel supply and reasonable prices is crucial for the manufacturing and construction industries. Overheating exports may push up domestic market prices and increase cost pressures on downstream industries.

The policy toolbox goes beyond export licenses

Export license management may only be the beginning. Analysts believe that subsequent policies may exhibit multidimensional and gradual characteristics:

Possible tariff adjustment: It is not ruled out to make minor adjustments to export tax rebates for some high value-added products, or to impose export tariffs on primary products.

Strengthening environmental constraints: By imposing environmental requirements to limit the production capacity of high energy consuming and high emission products, it indirectly affects export supply.

Industry self-discipline guidance: Encourage enterprises to prioritize domestic demand and maintain market stability.

How can enterprises cope with changes?

Facing possible policy changes, steel companies need to be prepared:

Market diversification layout: avoid excessive reliance on a single market and diversify risks.

Product structure upgrade: Transform towards high value-added and high-tech products to enhance competitiveness.

Balance of domestic and foreign trade: Establish a flexible production and sales system that can adjust in a timely manner according to policy changes.

Green transformation acceleration: Green steel that meets the requirements of "dual carbon" will become the core competitiveness in the future.

The Art of Balance

The adjustment of steel export policies is essentially balancing multiple objectives: maintaining the stability of the domestic industrial chain while also maintaining reasonable industry profits; We need to control the total energy consumption while ensuring economic development; To participate in international competition while avoiding trade frictions.

This balanced art tests policy wisdom and also tests the adaptability of enterprises.

The fluctuation of the steel industry, as a fundamental industry, will affect the entire economy, "said the person in charge of the China Iron and Steel Industry Association." Any policy adjustment will carefully consider the impact of multiple factors

Conclusion

The strengthening of export license management is like a stone thrown into a calm lake, causing ripples of attention both inside and outside the circle. No matter how the subsequent policies evolve, the Chinese steel industry is standing at a new crossroads: shifting from scale expansion to quality improvement, from resource consumption to green and low-carbon, and from price competition to value creation.

This is not only a policy guidance, but also an inevitable development of the industry. For steel enterprises, adapting to changes and actively transforming are the key to occupying a favorable position in future market competition.

For the entire Chinese economy, the stable and healthy development of the steel industry is like a sturdy steel structure, supporting the stability of the manufacturing industry building.

The export license may only be the beginning, but the prelude to industry transformation has already begun. In this transformation, whoever can complete the transformation and upgrading first will gain an advantage in the new round of industry reshuffle.