South Korean steel mill to lose 1.7 million tonnes of production
South Korean steel mill to lose 1.7 million tonnes of production

19 September 2022 – South Korea’s largest steel mill will lose about 1.7 million tonnes of steel production, according to the company. Normalisation of production not expected before end of 2022. Nickel price in China continues to rise. LME nickel up 19% since beginning of September. Chinese economic data is developing much better than expected. US Section 301 tariffs to remain in place – what will happen to the US Section 232 and EU Safeguard tariffs on steel products?

Nickel price in China continues to rise

Chinese nickel prices continued to rise today, Monday 19 September. The most heavily traded futures contract was up about 2.3%. Spot nickel prices also rose by more than 3%.

European nickel still at a high level

The 3-mont nickel contract on the European London Metal Exchange had closed Friday at $24.249, or up nearly 5% per tonne. And started this morning’s trading above Friday’s opening price.

This means that European nickel has already gained more than 19% since the beginning of September 2022 through the weekend. It was up more than 13% on the SHFE.

South Korea: Steel mill loses 1.7 million tonnes of production due to typhoon

South Korea’s largest steel and stainless steel producer Posco said on Friday it estimated a production loss of 1.7 million tonnes at Pohang Steel Works, which was hammered by Typhoon Hinnamnor last week. Production at the storm-hit plants is not expected to return to normal before the end of 2022, the company said.

Deutsche Bank: Chinese economic data better than expected

In China, domestic demand developed better than expected in August. Sales in the retail and service sectors rose by 5.4 per cent year-on-year despite partly tightened Corona restrictions, and the positive trend of falling unemployment figures continued.

Industrial production also increased surprisingly by 4.2 per cent compared to the same month last year, despite partial weather-related electricity rationing.

Thanks to massive state support, infrastructure investments increased by 14 percent compared to the previous year.

Stimulus ahead of China’s 20th Party Congress

Last week, China’s head of government Li Keqiang announced, among other things, targeted measures to stimulate private demand for credit, such as additional credit quotas for the manufacturing sector and interest rate subsidies for small and medium-sized enterprises.

Further support could follow in the run-up to the 20th Party Congress of the Communist Party of China, which starts on 16 October. If this takes effect in the coming months, it could also have a further positive impact on sentiment in the local equity markets.

US 301 Tariffs: What will happen to Section 232 and Safeguard?

At the beginning of September 2022, US Trade Representative Katherine Tai announced that the US Section 301 tariffs against China, which affect annual imports worth more than US$ 375 billion, would remain in place. The process responsible for this has been initiated. In addition, a representative of the USTR said that the policies will be in place while Beijing’s policies remain in place.

US Trade Representative Katherine Tai said last week that punitive tariffs on Chinese imports will not come down until Beijing adopts more market-oriented trade and economic principles.

US Section 232 and EU Safeguard

It should therefore be clear that the US Section 232 tariffs on steel and aluminium imports will continue to apply. And thus, in the broader view, the EU Safeguard measure on certain steel products will not change in the future.

EC proposal to ban imports from forced labour

In the EU, it is likely that the European Commission’s proposal for a ban on products from forced labour, which was presented last week, will make it even more difficult in future for Chinese products in particular to be imported into the community of states without a close look by the EU customs authorities.

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