The Chinese government is considering the levy of an extra tax
on the country's coke exports, which account for half of the
world's annual coke consumption.
Sources with the National Development and Reform Commission
(NDRC) and the General Administration of Customs said the levy
would protect the country's diminishing coke resources and the tax
ratio was yet to be fixed.
Coke is in short supply globally and it is estimated that
China's coke resources will be depleted in 40 years.
The NDRC was studying the feasibility of cutting exports by an
extra levy, said Hou Shiguo, an NDRC official.
Coke is a crucial raw material for the steel-making industry.
Every year steel works around the world consume 427 million tons of
coke.
The energy-consuming coking industry had attracted government
attention as it strives to cut power consumption and tighter
control of exports was expected to help reduce the country's
soaring trade surplus, said Zhang Bingzheng, an official with China
Customs.
The government has levied a five-percent tax on coke exports
since Nov. 1, last year, but it proved ineffective in suppressing
rising exports, which rose by 38 percent in January.
The average price of China's exported coke was US$150.3 per ton
in January, while the average cost in the global market stood at
US$171.
The United States and the European Union both launched
anti-dumping probes into imports of foundry coke from China last
year.
"Among the three measures of export control, the extra levy is
easier to operate compared with raising the standards of exported
products and cutting export quotas," said Zhang.
Insiders estimate coke exports this year could be reduced to
around 10 million tons with a 20-percent tax and seven million tons
with a fifty-percent tax.
Affected by the extra levy, the country's iron and steel
industry, which consumes 80 percent of the coke, would possibly see
an extra levy on its exports, said an insider.
China's coking industry should reduce production in view of the
situation, said Huang Jingan, president of the China Coking
Industry Association, adding prices could possibly fall in the
future.
(Xinhua News Agency March 24, 2007)