5 May 2022 – As expected, the US Federal Reserve (Fed) announced a rate hike of 50 basis points to 1%. Markets and base metals react positively to the decision. HRC and stainless steel prices rise. And he who buys cheap buys twice – Beware of fraud in steel trading.
Fed raises interest rates – Markets and base metals react positively
Yesterday, Wednesday, the US Federal Reserve announced that it will raise the key interest rate from the current 0.5% to 1.0%. Unsurprisingly, most analysts had already assumed in advance that this rate hike would occur due to high inflation. At the start of trading on the Frankfurt Stock Exchange, the German share index DAX made a decent leap upwards and stands at 14,280 points or approx. 2.21% in the plus.
Base Metals start trading on a positive note
Base metals – especially aluminium, zinc and copper – reacted positively to the Fed announcement at the start of trading today on the LME. Nickel has also started the day up 0.5%. Nickel stocks on the LME had recently fallen further and are at a worryingly low level. On the SHFE, nickel continues to hold above $34,000 per tonne.
HRC and stainless steel prices up
Chinese HRC prices rose by more than 2.3% in some cases on Thursday. Iron ore on the DCE is also currently up 1.87%. Chinese stainless steel futures are up about 1.5% and spot prices are also rising.
Caution: Those who buy cheap pay twice
Beware of fraud: Those who buy cheap end up paying twice
There is an old saying that he who buys cheap pays twice in the end. A steel trader who had supposedly bought steel cheaply in China may have come to this conclusion. The surprise must have been great when the delivered goods turned out to be old car tyres.
Hardly any legal options
The steel trader concerned is unlikely to have any real legal recourse against such fraud. In the end, all that remains is to write off the costs, which can quickly run into six or seven figures in such a deal.
Beware of supposedly cheap offers
So be careful when you search for supposedly cheap offers, e.g. from China. The search engines are not always your friend here. They like to lure you with well-known names that, on closer inspection, quickly reveal that it is not multinational steel companies that are at work here, but rather dubious suppliers.
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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.