Shanghai steel prices sag as U.S. tariffs loom

Shanghai steel prices sag as U.S. tariffs loom

10th july 2018

Chinese steel prices dropped on Friday ahead of the United States imposing tariffs on $34 billion in Chinese goods in a few hours, with further losses likely as the trade row between the world’s two largest economies threatens market stability.
President Donald Trump confirmed that the United States would begin collecting the tariffs at 12:01 a.m. Washington D.C. time (0401 GMT) on Friday and warned that subsequent rounds could see tariffs on more than $500 billion of goods, or roughly the total amount that the United States imported from China last year.
“The Trump administration’s trade war is finally upon us, and by all accounts, we’re headed for an unparalleled trade conflict between the world’s largest economies,” Stephen Innes, head of Asia Pacific trading at OANDA brokerage, said in a note. “If this moves off the tit for tat battleground into a full out trade war, it will not only threaten market stability but could compromise relations between Washington and Beijing.”
The price of construction steel product rebar on the Shanghai Futures Exchange was down 0.7 percent at 3,748 yuan ($563) a tonne by 0205 GMT.
Hot rolled coil, used in manufacturing, fell 1 percent to 3,819 yuan.
Other risky assets from commodities including oil and copper were also weaker and Asian stocks were subdued with investors on edge ahead of the U.S. tariffs taking effect.
A drop in weekly steel inventory in China suggested demand remained firm in the world’s largest consumer and producer. Total steel stocks dropped 154,600 tonnes to 10.098 million tonnes this week, data compiled by Mysteel consultancy showed.
That followed a two-week increase which came after a 14-week decline.
Prices of steelmaking ingredients were steady to weaker, with iron ore on the Dalian Commodity Exchange up 0.1 percent at 456 yuan a tonne and coking coal flat at 1,143 yuan. Coke fell 1.3 percent to 1,984.50 yuan.
Source: REUTERS