Steel exports from China, the world’s largest producer, fell for the first time in six months as new tax rules for some shipments began to slow sales.
The country shipped 7.8 million metric tons of steel products in February, down 24 percent from 10.29 million tons the previous month, according to data released Sunday by the customs administration in Beijing. The government canceled export-tax rebates starting Jan. 1 for alloys that contain the chemical element boron as part of its efforts to cut oversupply in the industry.
The slowdown comes after shipments by the country that accounts for about half the world’s steel output surged to a record last year amid weak domestic demand. China has set its economic growth target for 2015 at about 7 percent, down from last year’s goal of about 7.5 percent. Steel prices fell more than 4 percent this year in Shanghai after plunging 27 percent in 2014.
“They pushed out a lot of the export volume with the boron added at the end of the year because there was anticipation that change could be coming,” Vanessa Lau, a senior research analyst at Sanford C. Bernstein & Co., said before the data was released. “It’s beginning to get more and more difficult to find real export markets that can take the growing amounts of Chinese steel.”
China shipped a record 93.78 million tons of steel products in 2014 as the economy expanded at the slowest pace since 1990. Boron-alloyed steel accounted for more than 30 percent of those shipments, according to CLSA Ltd. The nation’s steel consumption shrank 3.4 percent to 738.3 million tons last year, the China Iron & Steel Association estimates.
The country made 822.7 million tons of crude steel last year, more than double the combined output of the next four largest producers — Japan, the U.S., India and South Korea, according to statistics from the World Steel Association.
Steel reinforcement-bar, used in construction, fell 1.5 percent on March 6 to close at 2,485 yuan ($396.77) a ton on the Shanghai Futures Exchange.