China Applies 0% Tariff on Imported Steel Products... Up to 25% Tariff Imposed on Exports
China Imposes Retaliatory Tariffs on Australian Agricultural Products, Australia Complains "Gaining Significant Profits from Iron Ore"
[Asia Economy Beijing=Special Correspondent Jo Young-shin] China has implemented a 'duty-free' measure to curb soaring international iron ore prices.
According to Chinese media including the official Xinhua News Agency on the 29th, the Tariff Commission of the State Council of China decided to apply a '0%' import tariff on certain steel products and raw materials starting May 1.
The products subject to duty-free treatment include pig iron, crude steel, recycled steel raw materials, and ferrochrome (raw material for stainless steel). This measure is applied temporarily. On the other hand, export tariffs on ferrosilicon, ferrochrome, and high-purity pig iron will be raised up to 25%.
Xinhua explained that the temporary duty-free application on some products is aimed at reducing import costs and expanding steel resource imports.
Huanqiu Shibao, citing experts, analyzed that this is a measure by Chinese authorities to respond to the sharply rising iron ore prices while suppressing steel exports.
Wang Jianfu, manager of SteelHome, a Chinese steel information provider, diagnosed, "Currently, the high dependence on imported iron ore makes China's steel industry unstable," and predicted, "Although the duty-free measure may have minimal immediate effect, combined with other policies, it could curb the iron ore price surge starting from the second half of this year."
Ge Xin, deputy director of the Langer Steel Research Center in China, analyzed, "The duty-free application on some steel products can reduce China's iron ore imports and may have the effect of lowering prices of some steel products."
Huanqiu Shibao expressed discomfort toward Australia, stating that some iron ore suppliers such as the Australian mining company Rio Tinto have raised prices, causing difficulties for China's steel industry.
According to the China Iron and Steel Association (CISA), China's iron ore imports in the first quarter reached 283 million tons, an 8% increase compared to the same period last year, while the average import price rose 64.5% year-on-year to $150.79. As a result, as of the end of March, China's steel price index stood at 136.28 points, up 9.44% from the beginning of the year.
Huanqiu Shibao added that this duty-free policy was introduced amid escalating diplomatic tensions with Australia. China relies on Australia for more than 60% of its total iron ore imports, including 660 million tons of Australian iron ore imported last year.
Chen Hong, director of the Australia Research Institute at East China Normal University, said, "Australia is gaining considerable profits from China due to the iron ore price surge," and added, "China is pursuing a policy of diversifying import sources to utilize iron ore resources from Africa and other regions."
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