U.S. steelmakers have called for a continuation of Section 232 tariffs as the EU extended Safeguard for three years. Despite the announcement that the United States and the European Union will settle their steel dispute by the end of 2021. China is experiencing increased energy problems, which is also affecting stainless steel production. And logistics problems between China and the West could continue until the end of 2021.
China with energy problems
China is facing a serious power crisis. Extreme weather conditions, rising energy demand and severe restrictions on coal consumption are hitting the economy.
Several Chinese provinces are reported to be experiencing problems. Guangdong province in particular, which accounts for 10% of China’s annual economic output, has already had to ration energy supplies for more than a month. What this means for companies is that they have to stop production several days a week.
Stainless steel mills affected
Stainless steel mills in the Guangdong region are also affected by these energy rationing measures. One company reported that its stainless steel production volume would drop by 20% due to the power restrictions.
Will shipping problem remain?
The shortage of empty containers and trip cancellations could continue for several months, driving up freight rates as the peak selling season approaches and ports in Europe, the U.S. and China remain congested, according to DB Schenker’s local office in Taiwan.
“The empty container shortage is exacerbated by congestion at ports in Europe and the U.S., and more recently by the backlog at China’s Yantian port,” Antoine Bouin, vice president of Schenker Taiwan, said at an online press conference Monday.
Situation looks better at Taiwan’s ports
For Taiwan, freight rates and the container situation would be slightly better as the arrival of new mega ships at Evergreen Marine Corp (長榮海運) would help, he said.
Companies need to plan ahead now
Bouin said companies should make accurate volume forecasts for the next quarter, plan together with shipping lines and suppliers, and make capacity commitments to secure space.
US steelmakers expect continuation of 232 or something new
U.S. Steel Executives see no end to Section 232 tariffs coming. Even as the United States negotiates with the European Union to end reciprocal market restrictions. The announcement was made at a press event hosted by the American Association for Iron & Steel Technology.
EU has created facts with Safeguard extension
It was made clear that 232 could not be abolished just like that and emphasized that the EU had just extended the Safeguard measures by three years. And the EU could therefore not expect the United States to simply abandon its own market protection measures. No matter how an agreement with the EU is reached in the end, at least a replacement or something entirely new for Section 232 must be created.
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