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China scraps steel tariffs

China has scrapped safeguard tariffs on five types of steel products imported from Japan, South Korea, Russia, Ukraine, Taiwan, Germany and Kazakhstan, state media said yesterday.

"In light of current developments in the steel market and with the approval of the State Council, the ministry has decided to end safeguard tariffs on steel imports, effective from Dec. 26," the commerce ministry said in a statement.

Following the US

The move follows a decision by the US to rescind steel tariffs earlier this month.

China imposed the tariffs on cold-rolled thin plate steel, hot-rolled thin plate steel, cold-rolled stainless steel, pre-coated galvanized steel and non-grain-oriented silicon steel for three years in November last year.

Like their US counterparts, Chinese household appliance and auto manufacturers have been complaining bitterly about the tariffs since their imposition, and have been lobbying hard for their removal.

More imports

A spokesman for Baoshan Iron and Steel Co (寶山鋼鐵), the listed arm of China's largest steel group, said the move to drop the tariffs will result in more steel imports, but added that "this won't have any material impact on us."

Baoshan's vice-president and chairman Ai Baojun said earlier this week that, in the face of surging domestic demand, inadequate capacity will be one of the company's key challenges in the new year.

The Baoshan spokesman echoed this view, saying Chinese demand for steel prompted the decision to drop the tariffs.

Analysts said China's tariffs had started looking incongruous after the US admitted defeat, and the EU dropped its own countermeasures.

"China has to consider its role as a member of the WTO in reacting to the US and EU's actions," said Xu Aihua, an analyst with Antaike Information Development Co, a consultancy under the China Iron and Steel Industry Association.

"[It is] similar to its decision follow suit after the US and EU imposed protective measures last year," she said.

Ministry of Commerce figures show China imported 31.05 million tonnes of steel products in the 10 months to October, a 51 percent increase from the same period last year.

Chinese steel exports rose 28.7 percent from a year earlier to 5.71 million tonnes for the same period.
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