Archive for the ‘Export’ Category

China defends export restrictions on raw materials

Thursday, November 5th, 2009

The following story comes from AFP.

 

China on Thursday defended its restrictions on the export of certain raw materials, countering accusations from the United States and Europe that the curbs amounted to trade protectionism.

On Wednesday, the United States, joined by the European Union and Mexico, asked the World Trade Organization to set up a dispute settlement panel to rule on the restrictions.

“The goal of export administrative measures on some raw materials is to protect the environment and our limited resources,” the Ministry of Commerce said in a statement faxed to AFP.

“The regulations conform to the needs of China’s own (sustainable) development, while also advancing China’s efforts towards the sustainable development of the global economy.”

The United States has said the materials at issue were bauxite, coke, fluorspar, magnesium , manganese , silicon metal, silicon carbide, yellow phosphorus and zinc .

The materials are key inputs for numerous products in the steel, aluminium and chemical sectors across the globe.

The United States and the 27-nation EU filed an initial complaint at the WTO on June 23, and Mexico joined the consultations on August 21.

“The products being disputed actually form a very small percentage of Sino-US and Sino-EU trade,” the Chinese commerce ministry statement said.

“To believe that the Chinese measures are harming the US and EU steel industries’ recovery from the global financial crisis is overstated.”

The statement further said China was opposed to trade protectionism and was in full conformity with WTO trade rules.

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Anode prices – why don’t they match what I pay?

Tuesday, September 2nd, 2008

One of the complications of publishing data from China’s official sources is that one never can be sure of the accuracy of the data.   GI-GO applies in China at least as much as it does anywhere else in the world*.

I have received comments from people in the last month or two that the prices showing in our reports always seem lower than what the market is actually paying.   That’s bad news for the traders and their clients.    The client thinks he has been over-charged, and beats up on the trader.

The data we reproduce is from Customs Dept, but we have been worried that maybe there’s a wrinkle somewhere between the commercial contract and the Customs declaration.   And we have found one.  

Anodes were until very recently subject to a 15% rebate.   The good folk in China’s Customs Dept knew this and assumed (rightly or wrongly) that the prices being presented to them were slightly inflated, in order to extract a few extra RMB out of the Government.   So they would each month conduct their own review of the market to establish what the price would have been back when the contract was written.   They then used this information to adjust the entry price.

The effect of this action (apart from stopping rorting of the rebate) has been to insert a time delay of a couple of months in the pricing picture.    The prices we quoted for June’s exports, for instance, are more likely to have been accurate for March or April.   Conversely, should the market price turn down, we aren’t likely to see this in the Customs data until 2 – 3 months later.

We understand that the practice will continue for at least several more months, despite the rebate stopping, partly because some suppliers are still eligible for the rebate.   I suspect the gap between contract prices and reported prices to close after the new year.

So if you have been beating up on your anode supplier based on the information we published, best to find some other subject to beat him up about!

* GI-GO = Garbage In – Garbage Out.

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Chinese Gov’t announces new export taxes

Tuesday, August 19th, 2008

In an announcement posted on Friday, the Chinese Government has announced new export tax increases on a range of goods, including coking coal and coke.   Petroleum coke has not been included in this announcement, but the market maintains that Chalco’s proposal (which we reported last week, see below) will be rolled out some time before the end of the year.

Coking coal exports were taxed at 5%, but this has gone to 10% effective August 20.   Coke is now taxed at 40%, up from 25%, also effective the same day.    One of the other products which was caught in the new edict was aluminium alloy, which cops a 15% tax.

These moves are all part of the government’s attempts to control the energy supply situation.   Energy supply is not keeping up with demand, and a number of blackouts have already occurred around the country this summer (though not in Beijing, unsurprisingly).   

Meanwhile, exporters of green and calcined petroleum coke should not take too much joy from the recent announcement.   The indications are that the government has chosen to put the energy controls into place in a step-by-step approach.    Local analysts are predicting that pet coke will incur a tax penalty sometime before the end of this year, and possibly as soon as in the next few weeks.   The tip is for a 15% tax on pet coke, which apparently was the number submitted by Chalco in their submission to the Government.

 

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Export tax news

Monday, August 11th, 2008

In a new blow to foreign buyers of Chinese coke, the domestic market is rife with rumours of a new export tax on pet coke.    The story goes that Chinalco has proposed to the Government that petroleum coke exports should bear an export tax (exact amount unclear), the argument being that China needs to limit its exports of energy products.

It is said that the real reason for Chinalco’s show of nationalistic concern is that they are reeling from the rocketing price increases that we have all seen these last 12 – 18 months.    One way to take the pressure off the price is to weaken demand from foreign sources, making more available for the domestic market and thereby shifting the supply-demand equation.

Given the huge shortages of coal, the previous actions by the government on exports of aluminium and other energy-intensive products, don’t be surprised to see the Government accept Chinalco’s suggestion.   We will keep you posted as more news comes to hand.

Also, an update on the previous post regarding the export rebate for anodes.   Previously we reported that the rebate was still available for those exporters who presented their contracts for registration with the authorities.    The contracts had to be dated pre August 1, 2008 with fulfillment prior to December 31, 2008.   Now it has been confirmed that only those contracts with fixed prices are eligible for the rebate.   While this makes logical sense, it also reduces the number of actual contracts which can be registered.  

 

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Export rebate scrapped – an update

Tuesday, August 5th, 2008

The rules applying to exemptions relating to the recent scrapping of the export rebate have now been published.    Contracts written prior to August 1 remain eligible for the rebate.   To remain elegible, the supplier/exporter must register the contract with the authorities prior to August 15.   The contract must be filled before th eend of this year.   Shipments in 2009 will not be eligible for the rebate even if th econtract has been registered.

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