Tariffs on some steel products adjusted from May 1, is steel still an overcapacity product now?

May 1 onwards to adjust the tariffs on some steel products. China's iron and steel industry appeared in the background of the carbon peak, increase imports, reduce exports has become an inevitable regulatory direction. In order to better safeguard the supply of iron and steel resources, and promote the high-quality development of the iron and steel industry, approved by the State Council, the State Council Customs Tariff Commission recently issued a notice on the adjustment of tariffs on some steel products, which clearly states that pig iron, crude steel, recycled iron and steel raw materials, ferrochrome, and other products to implement a temporary zero import tariff rate.

Canceling the original steel export tax rebate, this series of policies is clearly trying to cool the domestic steel market. Temporary tariffs are based on the preferential import and export tax rates stipulated by the Customs, the more favorable tax rates for some import and export products, generally set once a year. It seems I've gotten used to attributing overcapacity as the root cause of low steel prices and a stagnant market. Struggle for market economy status. The steel market has fallen for five years in a row.

China's steel industry has struggled with overcapacity, losses and forecasts of a long-term decline in Chinese demand. Some steel mills have started work due to the epidemic, and steel companies in the north have not resumed production due to winter production restrictions, and steel supply has declined; demand has also been affected by the epidemic, delaying the resumption of work, and some steel traders are reluctant to make purchases, while rising steel prices have led to a rise in the share prices of steel companies. Wuhan Iron and Steel shares have rebounded 33% since closing at a new low in early February, while steel shares have rebounded 17%.

Compared with developed countries, China's steel still has a price advantage. China's total steel exports will remain at a high level, although a prolonged period of iron ore prices above $80 will lead to an increase in non-mainstream and even some domestic mines, which is not a short-term process. Continue to adhere to the principles of marketization and the rule of law, unswervingly implement the task of dissolving steel overcapacity, always maintain a high-pressure situation of zero tolerance for illegal production capacity, and consolidate the results of dissolving overcapacity. It will take quite a long time for the global economy to recover again. If the steel industry wants to find a way out in this period of economic weakness and low demand, it must implement supply-side structural reform and make capacity changes from time to time to adapt to today's unpredictable market environment.