24 September 2024 – Asian stock markets reacted today to a stimulus program recently announced by the Chinese government with gains of more than 4% in some cases. And Canadian steel producers are urging their own government to hurry up with the introduction of the upcoming steel and aluminum tariffs.
Asian stock markets welcome Chinese stimulus program
China today unveiled a series of planned measures to further stimulate economic growth. Among other things, the People’s Bank is to reduce the minimum reserve requirements for banks by 50 basis points in order to free up more liquidity.
For the Chinese real estate market, the government announced a reduction in mortgage interest rates for existing loans. According to media reports, the government plans to provide liquidity support of at least 500 billion yuan (USD 70.8 billion).
Tuesday’s measures come after the PBOC cut the short-term repo rate on Monday to further increase liquidity. The measures are directly aimed at supporting economic growth,
Stock markets in Asia react significantly
The Chinese indices Shanghai Shenzhen CSI 300, the Shanghai Composite and the Hang Seng Index all rose by more than 4% in response to the announcement.
The other Asian stock markets were also positive today. Japan’s Nikkei 225 index rose 0.7%, while the TOPIX gained 0.5% as Purchasing Managers’ Index data showed the country’s services sector grew more than expected in September.
South Korea’s KOSPI gained 1.1%, while the Taiwan Capitalization Weighted Stock Index rose by around 0.7%.
Prices for base metals also on the rise
Prices for the important base metals also rose in Asia today. Copper (+1.8%), lead (+1.5%), zinc (+1.4%), nickel (+1.2%), tin (+0.8%) and aluminum (+0.7%) all rose on the SHFE commodity exchange. A similar trend could also be seen for base metals on the European LME at the start of trading.
Canadian steel makers push for new tariffs
After the Canadian government announced its intention to introduce extensive tariffs (surtaxes) of 25% on Chinese steel, stainless steel and aluminum imports at the end of August 2024, domestic steel manufacturers are urging the government to hurry. According to media reports, there has been a significant increase in lobbying by steel producers.
Editor’s note: someone must have been looking over the shoulder of the EU mills.
The Canadian government wants the tariffs on almost all Chinese steel products to be finally introduced on October 15, 2024. The consultation phase was completed on September 20, and a final result has been announced for October 1, 2024.
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