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According to related reports, the Asian steel market has been discussing in the past month that China may cut the steel export tax rebate from the current 13% to 9%, or cancel it altogether.

A trader said that this may be in line with the CPC Central Committee’s policy of reducing production capacity of steel industry. The reduction of export tax rebates will force steel mills to rely more on the domestic market instead of increasing production to meet overseas markets.

Regardless of whether it is lowering or abolishing export tax rebates, the impact is not small, and all steel products are bound to rise in price. This means that domestic steel mills will no longer be an important player in overseas markets, and the export market will vacate a supply gap, which will boost spot prices.

This is indeed good news for global steel mills, because China's steel products are no longer the cheapest, which greatly reduces the pressure on price competition in countries around the Asia-Pacific region, including Japan, South Korea, India and Vietnam, which may all benefit.