Effective as of 15 April 2007, the Chinese government has abolished 8% VAT rebates on exports of major steel products and reduced the rebate on high-end steel products such as stainless steel, special steel and cold rolled steel to 5%.

The Chinese government last week announced that, as of 1 April 2007, Chinese customs will impose floor prices for certain categories of ferroalloy and steel semis exports. This is another measure to try to slow the export momentum of primary products. The floor price list will be updated monthly to reflect changes in market conditions, and China customs will not allow export clearance if the FOB prices of the products are lower than the published floor prices.

Last week, Chinese spot steel market was stable. The hot rolled coil price was quoted at USD473/t, up 0.36% WoW, while the price for cold rolled coil also increased slightly, by 0.13% WoW to USD554/t ex-VAT. Galvanised steel was up by 0.13% WoW to USD592/t without VAT. Rebar, however, slid by 0.5% WoW to USD355/t ex VAT. The Hebei 66% iron ore fine claimed a price of USD88/t ex-Vat, which was unchanged from last week. The Indian import iron ore has been stuck at USD93/t CIF for the past three Weeks.

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