Before the weekend, it is currently rather quiet on the markets. China is so far focusing on prudence and order in the real estate group Evergrande. And the United States wants to finally end the chips shortage in the automotive industry.

Stainless Espresso: calm, order and chips
Stainless Espresso: calm, order and chips

Markets: calm before the weekend

Currently, the commodity markets are relatively quiet after a thoroughly exciting week. Currently, we perceive only the usual profit-taking before the weekend.

Evergrande: Order and Restructuring

While more western dominated media try to spread rumors and panic with lurid headlines, the Asian online media are more focused on an orderly liquidation and the announced restructuring measures of the real estate group Evergrande.

We would also like to distance ourselves explicitly from lurid rumors and look objectively at the facts.

What is currently known about Evergrande:

  1. Chinese banks have already calculated value adjustments and see the situation as controllable.
  2. The Chinese government is said to have approved the Evergrande restructuring plan of the group’s management.
  3. The board of directors has called on management to do everything possible to ensure that pending payments can be met.
  4. Evergrande Wealth has released detailed info on how to submit requests for redemption of investment products.
  5. Whether there could be an uncontrolled crash of Evergrande and that the Chinese government does not want to save the real estate group are so far only based on statements of unnamed officials.
  6. Provincial authorities can be expected to brace themselves for an increased volume of representations from potentially aggrieved creditors.
  7. Circumstances have always been made with headlines and clickbaits. And would not be the first case of Fake News at Evergrande.

Until there is a statement from official sources on the future of Evergrande Group, caution should be exercised here and urgent attention should be paid to more than just headlines and lead-ins.

U.S. announces measures to curb chips shortage

U.S. Commerce Secretary Gina Raimondo yesterday (Thursday) announced further concrete actions to address the semiconductor crisis in the automotive industry. This is to explore exactly where in the supply chains the problems are and what actions need to be taken to get to a solution.

Automakers have been struggling to procure sufficient semiconductor chips for vehicles since the end of 2020. In some cases, this has led to production cutbacks and shutdowns as well as delivery problems.

Should the chip crisis be resolved in the next few months – Taiwan, for example, has announced a significant expansion of semiconductor chip production – this will also have a significant impact on steel consumption and demand.

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