Steel production has dropped around the world except for trade warwaging China and the United States (US). In China steel production increased by a whopping 10% over the past year, despite the trade tensions that emerged amidst a backdrop of slowing global growth. According to Amanda Eglinton, associate director of pricing and purchasing at IHS Markit, steel production also increased in the US, mainly because of strong regional demand and the protection offered through the imposition of Section 232 tariffs on steel and aluminium. “Global steel production increased over the first half of 2019, but was highly concentrated in China which drove nearly all the growth in global steel production yearto-date,” she said. “Steel prices have been dropping over the past year after peaking last summer, with large variations between regions and products. The market is clearly becoming more regional as demand trends diverge and trade barriers evolve,” said Eglinton, indicating that uncertainty around the outcome of ongoing trade negotiations and developments weighed heavily on the near-term outlook for steel. “The outlook for steel has turned less favourable,” said Eglinton. “The market has deteriorated over the past few months as trade negotiations dragged on and demand growth slowed.” She said uncertainty remained, exacerbated by increasing risk of a “no-deal” Brexit, the timing and scale of any Chinese stimulus, and tension in the Persian Gulf. “US tariffs on imports from China will further restrain exports throughout supply chains in Asia.”
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