China suspended some import duties on steel as part of a multi-year campaign to force the state-dominated Chinese industry to become more energy efficient and profitable
Duties on crude steel, cast iron, recycled steel and some other products will be suspended on May 1, the finance ministry announced. He said export taxes of 15% -25% will be imposed on high-purity cast iron and other products.
The changes will lower prices for Chinese buyers and promote “high-quality transformation, upgrading and development of the steel industry,” the ministry said. He said it includes reducing domestic production.
China produces about half of the world’s steel, but a slowdown in demand due to the cooled economic boom after 2008 left excess production capacity and led to wars over price cuts, increased exports and heavy financial losses.
The US and Europe complained that China was selling at improperly low prices, hurting foreign competitors.
Regulators say they want to use market forces instead of government orders to force less efficient factories to close. They stepped up the enforcement of the environment while state sector leaders were encouraged to merge and build more efficient mills.
According to the government, more than 150 million tons of production capacity was eliminated between 2016 and last year.
Despite this, total Chinese production increased 5.2% last year from 2019 to just over 1 billion tons, according to government data.
Chinese Ministry of Finance (in Chinese): www.mof.gov.cn