China broadens tariff categories for carbon steel flats, maintains tariffs

News announced by the Customs Tariff Commission of China's State Council that tariff rates on 1,010 commodities will be adjusted effective from 1 January, 2024 has overshadowed a smaller change to particulars for some steel products which nonetheless could have major implications for Chinese steel exporters, and to a lesser extent, importers.

The wide reduction in tariffs unveiled by the State Council China is to encourage the import of commodities and products where the country is facing a critical shortage - such as in medications and components - but the change for the nominated steel items - namely hot-rolled and cold-coils and coated sheets and coils - seem aimed at exporters.

The Customs Tariff Commission has decided to introduce new sub-categories for the flat rolled items to more precisely identify the quality and specification details of the items which, for exporters, will provide an extra level of confidence for importers.

Moreover, exporters will be able to argue that as their grade of HRC, for example, meets specific requirements for yield strength as identified by its sub-category HS code, so they should be able to charge overseas customers a premium.

The total export volume of the identified steel products reached 14.08 million tonnes over January-November this year, accounting for 17% of China's steel exports during the same period, Mysteel Global noted.

This sub-division of high-end subordinate steel products of flat steel follows the trend in recent years of China's further classification of special steel, a Shanghai-based ferrous analyst commented.

In fact, China has been encouraging the export of high-end and high value-added steel products, a market insider in Beijing noted, suggesting that the creation of the new sub-categories may lay the foundation for further discussion about high-end steel products' export tax rebates. Previously, the Chinese government had removed export tax rebates of up to 13% on all steel products in May and August 2021, as reported.

Exporters to China will be less affected by the changes though the Customs Tariff Commission has decided not to make any adjustments to import duties.

Earlier on 28 December 2022, China had unveiled adjustments to tariff headings and tariff lines of certain steel products with effective from 1 January 2023, specifically under HS codes 7225 and 7227 relating to flats and longs of alloy steel, as Mysteel Global reported.