The existing export tariff rate on Chinese FeSi is 25%, which has been trigging increasingly rampant ferrosilicon smuggling. South Korea and Japan are the major users of Chinese ferrosilicon and what’s worse, they have become the major destinations of smuggled Chinese ferrosilicon over the past two or three years. Ferro-alloys.com made a rough analysis on the smuggled volume of Chinese ferrosilicon with the Customs statistics of China, Japan and South Korea. 易統(tǒng)計.jpg)
From above two charts, we can see ferrosilicon exports via Chinese Customs to Japan and South Korea have been on the decrease. While imports of Chinese ferrosilicon via Japanese and South Korean Customs have been at a high level and the difference is likely to widen. This can be a basic explanation that smuggled Chinese ferrosilicon to Japan and South Korea is likely to grow, which is supported by Chinese and foreign ferrosilicon dealers. As Ferro-alloys.com customers said, most of South Korean imported ferrosilicon is smuggled and smuggling ferrosilicon to Japan has badly reared its ugly head over the past two years.
Statistics Analysis: Difference between China Customs export data and Japan Customs import data was less than 10 thousand mt through 2011, increased to 50 thousand mt through 2012 and climbed to 71.26 thousand mt through Jan. to Oct. of 2013, which was expected to reach 85 thousand mt through 2013. Difference between China Customs export data and South Korea Customs import data was less than 20 thousand mt through 2011, increased to 90.84 thousand mt through 2012 and climbed to 83.845 thousand mt through Jan. to Oct. of 2013, which was expected to reach 100 thousand mt through 2013. This can basically demonstrate smuggled Chinese ferrosilicon to Japan and South Korea is around 200 thousand mt per year.
If smuggled Chinese ferrosilicon to other countries were taken into consideration, conservative estimates of yearly smuggled Chinese ferrosilicon would reach 250 thousand mt. According to China Customs Statistics, total exports of Chinese ferrosilicon is just 273 thousand mt through the first ten months of 2013 and exports are predicted to be around 340 thousand mt through 2013. From statistics, we can see smuggled ferrosilicon is on the trend to overpass legal exports. In such circumstances, market participants are more pleading with Chinese government to lower the export tariff on ferrosilicon and they think smuggling are likely to be kicked out only by lowering export tariff. It is a good hope, but Chinese government will consider more factors, not just for the sake of ferrosilicon enterprises. We suggest enterprises paying close attention to the Chinese government document.