China’s steel, iron market to flourish in near future

China’s steel and iron industry will embrace a bullish outlook thanks to the country’s further tax cuts, urbanization and downstream demand, the Economic Information Daily reported.

China will reduce the current value-added tax (VAT) rates from 16 percent for manufacturing and other industries to 13 percent, which will lower the cost and burden for steel and iron companies, said the newspaper.

The logistics expenditure will fall as the VAT rates for industries including transportation and construction will be cut.

The reduced tax rate will also help strengthen the competitiveness of China’s steel exports, according to the newspaper.

China’s expanding infrastructure investment is the other contributor to the booming industry.

The country will invest more in infrastructure construction this year as it pursues a new type of urbanization and the renovation of shanty towns.

The newspaper predicts that the growth of investment will see a 10-percent rise in 2019, which will drive up the demand for steel by 1 percent or 2 percent.