September 17,2021 – The Western press is once again full of reports that the Chinese economy is threatening to collapse. But it turns out that the Asians see things differently and the metal markets in particular are reacting in the opposite direction. The European Union is more than 30% dependent on Russian energy imports, the EU parliament snubs the Russian president and the last Russia-understanding leaves the political stage. What sounds like an intro for the next James Bond movie… “Your Ego Is Your Biggest Enemy”.
China: Significant cuts in crude steel production
While the Western press is once again singing the swan song of the Chinese economy, the metal market in Asia, which is directly affected by this, is reacting in exactly the opposite way. Stainless steel futures prices on the SHFE rose again today by more than 6%. Spot prices for Chinese stainless steel rose in some cases by more than 5%.
More than 13 million tons in crude steel production affected
Once again the Chinese government has cut crude steel production in three important provinces, Guangxi, Guangdong and Jiangsu. By the end of December 2021, nearly 13 million tons less steel will be produced in these provinces. Steelmakers must also save 30% energy by the end of the year.
Your ego is your biggest enemy
With the European Commission’s plans for Green Deal, Fit for 55 and CBAM, the Union’s dependence on gas imports will increase in the coming years. At least until sufficient renewable energy and green hydrogen will be available in the distant future.
EU dependent on Russian imports
EU figures show that currently 1/3 of imports of natural gas, LPG, coal and petroleum come from Russia. A dependence of the EU on Russian exports is thus clearly recognizable. According to Eurostat, all EU member states are net importers of energy and 50% dependent on energy imports from abroad.
Strasbourg snubs Putin
The EU Parliament has sharply criticized Russian President Vladimir Putin and Russia in a recent report. Whether this criticism is justified or not remains to be seen. But whether it was strategically wise to upset the most important energy partner so drastically in the short to medium term, given the current explosion in energy prices and a dependence of more than 30% on Russian energy imports, could become the all-defining question in the coming winter.
Last Russia-understanding leaves the political stage
And one of the weightiest people in world politics, whether you like her or not, and who has repeatedly managed to smooth the waters between the West, China and Russia, is stepping down from the stage at the end of September: Angela Merkel.
James Bond has long since understood: Russia and China are no longer the enemy.
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