China to maintain ferro-silicon export tariff in 2020
China is expected to maintain its 20pc duty on ferro-silicon exports next year to reduce energy consumption and protect the environment.
China's ministry of finance has verbally notified producers that the export duty will not be reduced as the alloy is an energy-sensitive product. This follows a request by China's chamber of commerce of metals minerals and chemicals importers and exporters (CCCMC) and major suppliers to the government in September.
Beijing in 2017 cut the export tariff for ferro-silicon by 5pc to 20pc as China's exports had lost their competitiveness in the global market. The cut boosted China's exports by 94pc from a year earlier to 373,319t in 2017.
But exports have been falling in the past year as prices offered by suppliers outside of China are at a discount. Prices from suppliers in Russia and Malaysia are $100/t lower than Chinese prices because of the 20pc export duty.
A Qinghai-based supplier exported only 1,000-2,000t of the alloy in November, down from around 4,000 t/month over the past two years.
An Inner Mongolia-based alloy producer failed to conclude deals in the past two months because of lower prices offered by suppliers in Russia and Malaysia.
A Jiangsu-based exporter have cut prices to attract buyers, but few deals have been concluded in the past two weeks.
China exported around 19,752t of the alloy in October, down by around 11.8pc from 22,403t in September.
But Beijing seems determined to maintain the export duty because of concerns that a further cut in the tariff will increase production of polluting and energy-sensitive products such as ferro-silicon.
Argus assessed export prices for 75pc grade alloy at $1,080-1,100/t fob yesterday, the lowest level since March 2017 and down from the 20 November assessment of $1,080-1,110/t.
source: Argus Media
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