[VAT cut by 3 percentage points, causing steel prices to change]-Shanghai Metals Market

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[VAT cut by 3 percentage points, causing steel prices to change]

Translation 07:38:42PM Mar 15, 2019 Source:SMM

The state announced that the value-added tax point will be reduced by 3 percentage points, causing a departure from the current trend of the market today. Futures, the decline in the tax point triggered investors for the weakening of cost support expectations, bearish futures, futures pressure down. Spot, a number of markets in the afternoon appeared "closed" to cherish the sale, the phenomenon of rising prices. According to SMM Steel Research, the tax reduction will not break the state of supply and demand, but the short-term market enters the game period between buyers and sellers, mainly because the VAT tax reduction is an out-of-price change and is not directly related to profits. The specific landing of the "tax reduction dividend" depends on the bargaining power of the upper, middle and lower reaches of the industrial chain. First of all, the tax reduction has little impact on the actual production of steel mills, mainly affecting the delivery rhythm of steel mills (most steel mills issue tickets according to the time of departure). Secondly, the short-term game goods brought about by the tax reduction mainly occur in the trading link between the trader and the terminal, and the game process may bring two kinds of results, which mainly depend on the terminal demand and the acceptance of the price increase. First, the business that can issue a bill is bound to cherish the sale or raise the sales price in the short term, if the terminal can accept, then the short-term drive spot price rises (such as today). Second, do not issue a ticket or every other month, in the current situation is still profitable, do not rule out price reduction sales, to lock in the tax bill profit ahead of time [SMM Steel]

[VAT cut by 3 percentage points, causing steel prices to change]

Translation 07:38:42PM Mar 15, 2019 Source:SMM

The state announced that the value-added tax point will be reduced by 3 percentage points, causing a departure from the current trend of the market today. Futures, the decline in the tax point triggered investors for the weakening of cost support expectations, bearish futures, futures pressure down. Spot, a number of markets in the afternoon appeared "closed" to cherish the sale, the phenomenon of rising prices. According to SMM Steel Research, the tax reduction will not break the state of supply and demand, but the short-term market enters the game period between buyers and sellers, mainly because the VAT tax reduction is an out-of-price change and is not directly related to profits. The specific landing of the "tax reduction dividend" depends on the bargaining power of the upper, middle and lower reaches of the industrial chain. First of all, the tax reduction has little impact on the actual production of steel mills, mainly affecting the delivery rhythm of steel mills (most steel mills issue tickets according to the time of departure). Secondly, the short-term game goods brought about by the tax reduction mainly occur in the trading link between the trader and the terminal, and the game process may bring two kinds of results, which mainly depend on the terminal demand and the acceptance of the price increase. First, the business that can issue a bill is bound to cherish the sale or raise the sales price in the short term, if the terminal can accept, then the short-term drive spot price rises (such as today). Second, do not issue a ticket or every other month, in the current situation is still profitable, do not rule out price reduction sales, to lock in the tax bill profit ahead of time [SMM Steel]