China August Steel Exports Jump to Record; Fuels Tax Talks

By Xiao Yu

Sept. 10 (Bloomberg) -- China, the world's biggest steel producer, boosted steel-product exports 6.5 percent to a record in August from a month ago, fueling speculation the government would raise taxes this month to rein in shipments.

Exports rose to 7.68 million metric tons last month, from 7.21 million tons in July, the customs office said on its Web site today. That's 43 percent higher than a year earlier, according to Bloomberg data.

Weakening demand in China has forced mills to slash output and cut prices, Nanjing Iron & Steel Co. said last week. China may remove rebates and then raise taxes as rising shipments would encourage rivals in Europe and the U.S. to ask for tariffs.

``Domestic demand is weak on concern of slowing economic growth,'' said Ma Haitian, analyst at Beijing Antaike Information Development Co. The Chinese government may remove rebates and add a 5 percent tax on exports of some alloys as early as this month, he said.

Beijing's Antaike is a research affiliate of the China Nonferrous Metals Association.

Steel demand in China has also dropped because the government closed construction sites in Beijing to reduce pollution for the August Olympic games. Sino-Ocean Land Holdings Ltd., a Beijing-based developer, yesterday said building in the capital was slower than expected because of the games.

Chinese producers are increasing shipment as prices in the U.S. have more than doubled. Prices of hot-rolled coil, a benchmark steel product, gained 7.6 percent this year in China.

European Union steel industry group Eurofer in August said it heightened surveillance of imports from China, and may request tariffs on organic coated sheets and quarto plates.

Steel shipments fell 7.2 percent to 41.8 million tons in the first eight months from a year ago, customs said.

Imports of iron ore, a steel-making ingredient, rose 23 percent to 307 million tons in the first eight months, compared with a year ago. August imports were 37.4 million tons, it said.

To contact the reporter on this story: Xiao Yu in Beijing at yxiao@bloomberg.net