Buyers renege on Chinese CRC, HDG export contracts after rebate cuts - sources

Some overseas buyers have reneged on contracts for cold-rolled coil and hot-dipped galvanized coil exports from China after the recently announced cuts in value-added tax rebates for some steel products, industry sources told Fastmarkets.

China's Ministry of Finance will remove VAT rebates for CRC, HDG and silicon steel in an effort to reduce steel exports and keep more supply in domestic markets, it said on July 29. This has caused some buyers to withdraw from sales contracts that had already been signed, including those that had stipulated that buyers will shoulder all tax burdens if any changes were to occur between the day of the concluded sale and the cargo loading period. "This is a big issue for traders to settle right now - it's not easy to come to any settlement," a steel trader in eastern China told Fastmarkets on Friday July 30. Other buyers...

Published

Paul Lim

Zihuan Pan

August 03, 2021

11:28 GMT

Singapore, Shanghai