As market sources tell us, there is hot speculation in China about coming steel export taxes. There is talk of export taxes on HRC and CRC products in the range of 11 to 20%. Nickel and stainless steel prices continue to rise significantly. Stainless steel spot prices up to $110 per ton. And Kuwait is planning logistics cities to become major shipping hub.
Update, July 30, 2021: China eliminates export rebates and makes global stainless steel production more expensive
Nickel futures continue to rise and stainless steel spot prices up again by up to $110
Nickel futures on the SHFE rose again by almost 3% on Monday. Stainless steel futures also gained more than 1.8%. On the Chinese spot market, stainless steel prices per ton have risen by $110.
On the LME, nickel has also managed to maintain its Friday level of over $19,400 per ton.
Kuwait plans logistics cities to become shipping hub
Kuwait plans to establish logistics cities to support the local economy and attract foreign investment, the Kuwait Ports Authority (KPA) announced Sunday.
Sheikh Yousef Al-Abdullah Al-Sabah, director general of the KPA, said these cities will be built on an area of two million square meters and designed by global design agencies to ensure high standards that will support e-commerce.
Planned logistics cities to serve specific purposes
Each of the planned cities would serve a specific purpose, helping small and medium-sized enterprises as well as providing lucrative investment opportunities for companies from abroad, Sheikh Yousef Al-Abdullah Al-Sabah added.
Smart port to optimize operations
He also revealed that a “smart port” is among the other plans, which will serve as a “contact point” connecting all concerned entities, and will also use automation and innovative technologies to easily manage daily operations. The “smart port” will serve as a connection point for all shipping channels.
The goal is a logistic solution at competitive prices
The logistics cities project aims to provide a logistical solution at competitive prices for foreign companies that want to store their goods regionally in Kuwait, and to attract foreign investment and fulfill economic growth and support diversification of revenue sources, he said.
China: Steel export taxes from 11 to 20%?
Chinese market participants are actively speculating about a coming export tax on steel products. There is talk of 20% taxes on hot-rolled coils (HRC) and 11% on cold-rolled coils (CRC). This speculation seems to have been triggered by recent reports from the Chinese Central Committee and the fact that crude steel production in the first half of 2021 was already almost 12% higher than in 2020 and the government’s target is that crude steel production in 2021 must not exceed that of 2020.
Government wants more advanced products at the end of the process chain
Last week, the Chinese Central Committee outlined its wishes regarding the further development of China’s central region. In addition to the core theme of green transformation, the statement also envisages further changes in industrial development. Here, among other things, a focus is placed on more highly developed products explicitly also in the steel and non-ferrous industries.
This announcement underlines once again the wishes which had already been made clear in the current 5-year plan of the Chinese government. To keep products further down the process chain in the country, steel export taxes would be an option. This would also provide a greater incentive to manufacture higher-quality products.
Production restrictions extended to further areas
More Chinese regions, such as Shandong, Jiangsu, Anhui, Zhejiang or Guangdong, will have to reduce the production of crude steel in order to meet the set target of not exceeding the 2020 production level. This is reported by Chinese media. According to the report, in the first half of 2021, crude steel production was already 11.80% higher than the previous year.
The implementation of the green transformation in China is closely linked to the reduction of steel production. In order to avoid the loss of urgently needed steel products to export and to cope with the government-imposed reduction in steel production while keeping steel prices in the country moderate, steel export taxes are also conceivable in this case.
Chinese market participants expect export taxes on steel
The government’s wishes and active reduction of steel output, seem to have reignited expectations among Chinese market participants for the already proposed steel export taxes. Sources suggest that HRC exports could be taxed up to 20% and CRC exports up to 11% to keep steel products in China. However, an official announcement on these steel export taxes has yet to be made.
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