China's latest decision to introduce export license management to 83 steel products from May 20 may severely hit domestic steel prices and cause a panic in the global market, analysts say.
China, the world's largest steel maker and consumer decided to introduce a license scheme in an ambitious effort to rein in the expanding steel exports and trade surplus. China's Ministry of Commerce said it has issued a notice saying 83 steel products including cold-rolled sheets, hot-rolled steel rolls and plates are subject to export licenses.
The license system only applies in general trade, the notice said, indicating that majority of CR, galvanised products and pipes are exempted from the new
China exported 14.13 million tonnes of steel products in the first quarter, up 118.4 per cent from the same period a year earlier, according to the general administration of customs.
The administration said China exported 5.38 million tonnes of steel in March, slightly lower than the record high of 5.55 million tonnes set last December.
China removed as of April 15 exports tax rebates on 83 steel products and lowered the rate on 76 others to five per cent as it strives to cut its trade surplus with major trading partners.
The surplus soared to $46.44 billion in the first quarter of this year, nearly double the $23.3 billion surplus in the same period last year.
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