The rebate cut was widely expected
The decision has disappointed local steel
recover mills, which were hoping for more government support as they come up against potentially calamitous margin pressures in the third quarter as well as a further decline in exports as a result of the rising yuan.
"Chinese steel exports have already been difficult and have lacked price competitiveness, and we will face a much tougher environment if some taxes aren't rebated," said an export manager with a major steel mill. From July 15, the steel industry will see the removal of 9 per cent tax rebates on hot-rolled steel coil, sections, some narrow cold-rolled coil products and hot-dipped galvanized coil, the ministry said on its website on Tuesday.
The rebate cut was widely expected by the market, despite denials by the China Iron and Steel Association last month. But some traders had expected the government
recover to relent following the central bank's decision to allow the yuan to appreciate after 23 months.
