China’s steel exports hit a new record high in October, according to the latest customs statistics. Moreover, shipped volumes are unlikely to fall too far over the remainder of the year, as buyers are looking to book ahead of January when China’s tax policy could change, Kallanish notes.

China exported 8.55 million tonnes of finished steel in October, 68.6% more than in October 2014, bringing China’s total exports over January-October to 73.9mt, up 42% year-on-year. China’s steel exports could therefore top 90mt in 2014, if shipments remain high.

However, looking further ahead in to 2015, buying on the export market has dried up recently because of uncertainty over China’s export tax rebates, reports suggest. There have been strong rumours since late September, that China could remove VAT rebates on alloy steel, although the rumours vary as to whether all alloy steels could be affected or only boron-added steels.

This is likely to mean a sharp drop in volumes in January as the changes would take effect on 1 January, but could boost December volumes. Buyers, which know their needs for the month are buying a month early as they have certainty over the tax rate. Buyers without an immediate need are holding off.

China also imported 1.09mt of finished steel in October, bringing the year’s total to 12.09mt, up 4.1% y-on-y. China’s imports have increased as demand for high-end steels have been boosted by continuing growth in China’s automotive and white goods output. Many grades for high-end products in these sectors are either not produced in China or foreign manufacturers based in China have licensing agreements with steelmakers elsewhere, Kallanish observes.