China will continue to reduce export tax rebates for lower-end steel as well as encourage slower export growth among major steelmakers to moderate the rapid growth of steel products sales overseas, said Luo Bingsheng, vice chairman of the China Iron and Steel Association.

'We are still putting forward new tax rebate measures aimed at reducing rapid growth in steel exports, especially of low-end products,' Luo said at an industry conference in the southern Chinese city of Guangzhou.

He said Chinese steelmakers will be encouraged by rebate adjustments to move away from over-reliance on low-end products.

'Our focus is really on increasing investment in high-quality product. Cutting rebates is meant to curb overheating exports, and the question is whether this can be absorbed by domestic demand. If exports fall and domestic production increases, there will likely be a major impact on the domestic market and this we need to avoid,' Luo said.

China exported 43.0 mln tons of steel products in 2006, up 109.6 pct. Imports meanwhile fell 28.3 pct to 18.5 mln tons.

Luo said China's crude steel output this year would likely increase to 472 mln tons from around 419 mln in 2006.

'We have to control blind investment in steel. What I am more concerned with is overinvestment in hot-rolled sheet. We should be concerned about prices in hot-rolled sheet,' Luo said.

He added that the association has met with major domestic steelmakers to moderate export growth to head off trade tensions, but ultimately individual steelmakers set their own export strategies.

'We have met with major mills and discussed measures for the whole industry. This is what is meant by 'voluntary restraint' and 'industrial coordination'. But it is all voluntary and non-binding,' he said.

He said China's crude steel consumption is projected at 450 mln tons in 2007, adding that production and consumption are projected to peak around 2012.

China may announce export tax rebate reduction policies in early April, in order to control this year's export of steel products, an industry official said Monday