24 October 2022 – Alloy surcharges for European stainless steel point to another increase, according to the first publications. Is German Chancellor Scholz selling critical infrastructure to China? Asian market reaction to Chinese re-election really surprising?
EU stainless steel alloy surcharges rise for November 2022
European stainless steel producers’ alloy surcharges for November 2022 are rising, in some cases significantly. For the largest EU producers, grades 304 and 304L are going up by more than 1%. For grades 316 and 316L even more than 4.5%.
Raw material prices up
Higher scrap prices and higher raw material costs for molybdenum can be held responsible for this, especially for grades 316/316L. Molybdenum had recently increased in price by more than 13%, stainless steel scrap prices by up to 9% depending on the origin.
Is Germany selling its critical infrastructure to China?
One may be experiencing deja vu, but according to the plans of German Chancellor Olaf Scholz, SPD, they would like to sell important parts of the port of Hamburg to the Chinese state-owned company Cosco. This is a topic that has already been on the minds of the government around former Chancellor Gerhard Schröder, but also of former Chancellor Angela Merkel.
German Russia Policy
Despite intensive international warnings, German policy since the late 1990s had sold large companies that were important for the critical infrastructure to Russian state-owned companies or investors. These included not only large parts of the important gas supply, such as storage facilities and transport routes, but also refineries, steel manufacturers and ports.
Can the sale still be stopped?
The possible sale of critical port infrastructure to a Chinese company is not only causing renewed astonishment internationally, but is also being heavily criticised in Germany. And the timing of the announcement, given the reports about possible sales contracts that will automatically come about if the German government does not reach an agreement by the end of October, does not seem to have been chosen at random. Is Chancellor Scholz already trying to plan for the time after the end of his political career? As a pupil of Gerhard Schröder, it would not be surprising.
Russia deeply rooted
While the sale of an East German refinery to a Russian energy company could just be stopped after the outbreak of the Russia-Ukraine war, it may already be too late here. Germany simply had to expropriate other Russian-owned companies. And in the case of the Nordstream 2 gas pipeline, the SPD-led government of Mecklenburg-Vorpommern even seems to be deep in the swamp of German-Russian corruption.
Port of Hamburg under pressure
According to media reports, the Chinese company Cosco has already put pressure on the operating company of the Port of Hamburg. For only if a sale were to come about would they increase the freight volumes there. What might happen in the event of failure has been left open. But it should be clear.
China: Re-election really surprising?
The market is said to have reacted with surprise to the re-election of Xi Jinping as General Secretary of the Chinese Communist Party when the Asian Hang Seng fell today.
One wonders where this surprise in the market came from, since the re-election was already a foregone conclusion before the party congress, according to unanimous media opinion.
For investors, the swing in the Hang Seng is therefore more likely to have been an opportunity to buy cheaply and then let the shares rise again.
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