As of July 1, the Chinese government reduced the tax rebate on exported fastenings and fixings meaning many factories have demanded immediate price increases before shipment.
The rebate has been slashed from 13% to 5% of a reduction in support across more than a third of products exported from China, with an emphasis on high energy-consuming, high-polluting and resource-intensive goods.
According to the British Association of Fastener Distributors (BAFD) “most factories [are] demanding immediate price increases before they will ship existing orders to UK fastener importers.” And, some factories are already factoring in further price rises as a further rebate reduction to zero is anticipated this autumn.
“Even large-scale import members say they have no choice but to accept immediate higher prices in order to ensure product is received on schedule,” said the BAFD.
“Short term alternative sourcing is out of the question [and as] several other Asian countries rely largely on Chinese steel, on which the rebate has been completely eliminated, importer say it’s very unlikely longer term re-sourcing would allow them to avoid increasing costs.”
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