01 April 2009 06:09 [Source: ICIS news]
SINGAPORE (ICIS news)--The higher export tax rebates announced by the Chinese government recently to boost outgoing volumes will not have any impact on styrene butadiene rubber (SBR) due to the continued slump in demand in the US and Europe, SBR producers in China said.
With effect from 1 April, the export tax rebates for non-oil grade SBR will be increased to 13% from 5%.
"Demand is not there in the US and Europe and there will be no impact on non-oil grade SBR exports even though the export tax rebate has been increased to 13%," a Chinese SBR producer said.
"Anyway, China exports very little non-oil SBR, less than 100 tonnes a month, so this higher export tax rebate will not really help boost Chinese SBR exports," he added.
SBR is used in the manufacture of tyres for the automotive industry. The slump in this sector has prompted SBR producers from Europe, the US and Latin America to offload their excess stocks into Asia, in particular, China.
"We are seeing a flood of SBR imports from Europe, the US and Latin America coming into China, which means that demand in the US and Europe is still very weak," a Chinese trader said.
China’s export-driven economy had been registering double-digit growth in the past two decades but slowed down to 9% last year amid a deepening global recession.
To boost exports and to achieve its target of 8% economic growth this year, the Chinese government recently announced that from 1 April, export tax rebates will be increased for more than 3,802 items including textiles and garments, steel, nonferrous metals, petrochemicals, electronics and light industrial products.
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