2 October 2024 – Canada finally announced yesterday that the surtax of 25% on steel, stainless steel and aluminum products originating from China will be introduced as planned from mid-October 2024. The German Federal Minister of Economics is coming under increasing pressure for his subsidy policy and his thinking, which has been branded as planned economy. And LME nickel prices on the way to the USD 18,000 mark?
German Federal Minister for Economic Affairs under pressure over subsidy policy
The German Federal Minister for Economic Affairs, Robert Habeck, is coming under increasing pressure for his subsidy policy and his interventions in the free market.
According to media reports, the German government’s total subsidy budget, i.e. direct financial aid and tax concessions, amounts to 67 billion euros in the current year. This is more than twice as high as the average for the ten years before the start of the coronavirus pandemic.
At the same time, Asian countries, above all China, are being punished by the European Union for their subsidy policies. “It is important to understand that these are not punitive tariffs,” Habeck said in Beijing in June 2024, referring to the European Commission’s ongoing investigation into state subsidies for electric vehicles from China.
The Volkswagen Group alone, which is partly state-owned, is said to have received well over 6 billion euros in subsidies for the development of electric cars since 2016. However, the minister also likes to go about his work with a watering can when it comes to other “green” environmental and climate protection projects. In 2023, direct financial aid here already amounted to 39 billion euros, or 86 percent of the total financial aid volume.
Industrial lighthouse projects failing by the dozen?
Even though the first projects from this program appear to be actually being implemented, other industrial lighthouse projects are already failing in the run-up. Be it green steel at Thyssenkrupp, which is already calling for further tax billions – because it appears to have miscalculated once again and has been fishing in the doldrums economically for decades. After all, without subsidies and taxpayers’ money, the rusty Duisburg steel giant hasn’t been able to do anything for a long time.
Or the setback with Intel’s “postponed” chip factory, which no one now believes will actually be realized. Other transformation projects have already been canceled or are wobbling.
Court of Auditors reprimands Ministry of Economic Affairs for subsidy practices
At the beginning of September, the German Court of Auditors reprimanded Robert Habeck: according to the Court of Auditors, most of the federal government’s financial aid recently went through Robert Habeck’s ministry. The authority complained that many subsidies had been in place for too long. They led to further “petrification” of the budget.
The Court of Auditors criticized Habeck’s ministry for continuing to disregard the guidelines for subsidies, as only 7 out of 57 grants were limited in time and reduced over time. Despite formal compliance with the time limit principle, subsidies are often repeatedly extended, which leads to a fossilization of the budget. Subsidies should be reduced to the essentials in order to increase the budget’s room for maneuver.
A slap in the face for the Green economy minister’s thinking, which has been branded a planned economy.
State subsidies only for large corporations?
The demands for a better and more sensible distribution of state financial aid are now weighing heavily on Robert Habeck’s resort. Small and medium-sized enterprises in particular, which represent the bulk of German and European economic output, have been largely left out of his “industrial lighthouses”, with billions in subsidies once again being given to large corporations.
Canadian surtax on steel and aluminum from China is coming
On October 1, 2024, the Canadian government announced that it would introduce the surtax of 25% on almost all Chinese steel, stainless steel and aluminum products announced in August in full from mid-October.
One of the reasons given for this surtax was to protect the domestic steel and aluminium industry from state-subsidized production in China.
Surtax also on electric vehicles
A few days earlier, the government had already introduced a high surtax of 100% on imported electric vehicles produced in China. This surtax now apparently been extended at short notice to electric vehicles and certain hybrid cars, trucks, buses and delivery vans.
LME nickel prices on the way to the USD 18,000 mark
Nickel prices on the LME continued to be friendly on Wednesday. Shortly after the start of trading, nickel was already at just under USD 17900/MT. It remains exciting to see whether the nickel price, which has already risen significantly since the beginning of September, can break through the USD 18,000/MT mark today.
Latest news
- Nickel shortage: China’s largest nickel producer cuts production
- Asian nickel prices rise significantly on Monday
- China euphoria continues to drive Asian stocks higher
We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
