LONDON, Nov. 1, 2018
LONDON, Nov. 1, 2018 /PRNewswire/ --
Last week saw around 700 delegates from across the ferroalloy industry descend upon CRU's annual Ryan's Notes Ferroalloys Conference in Orlando. Policy risks were some of the biggest talking points as participants become more cautious in their outlook. This Insight reflects on some of the take-aways from the conference.
During the three days of expert talks, we spoke to attendees about the biggest market topics on their minds. Recurring themes were monetary, trade and environmental policy, the same themes reflected in a recent poll recently undertaken by CRU Consulting (see Figure 1 below), which places trade risks at the top of respondents' concerns. Clearly the evolving geo-political climate is inviting uncertainty and speculation, creating opportunities and risks for the ferroalloys sector, particularly in China and the US.
Is global trade war entering a downward spiral?
Last year, we warned clients the US President had considerable latitude, and little oversight from Congress, in relation to trade policy. As we all know, these risks have begun to crystallise with the US placing import tariffs on steel (25%) and aluminium (10%), with few exceptions allowed to this point. On 24 September President Trump imposed tariffs on an additional US$200bn of Chinese imports, with China retaliating by imposing tariffs on an additional US$60bn of US imports to China. These newest tariffs are expected to push up consumer prices and drag down exports and growth in both economies. This is not the end of the line, either, as US pressure on China to reform will continue. In addition, we await the conclusion of the Section 232 case on US imports of vehicles and parts to be announced before February 2019.
As US political focus remains on allegations that China has manipulated markets and currency, created barriers to market entry, and has carried out long-term misappropriation of intellectual property, these disputes are continuing to create uncertainty and volatility in the market. A deepening of the trade war could drive market sentiment to become more negative. However, for commodity producers, real uncertainties exist surrounding the effects of policies designed to cushion the impacts of a trade shock.
Read more about CRU: http://bit.ly/About_CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.
Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.
CRU employs over 260 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004.
When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.
CRU – big enough to deliver a high-quality service, small enough to care about all of our customers.