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The Inpact of the TRADE WAR on the stainless steel

June 17, 2019

A number of risky asset prices in the capital markets fell after US President Donald trump announced high import tariffs on a range of Chinese goods.

According to the main content of the trade memorandum signed by trump, it is concluded that trump has two intentions in this trade war.

First, in the name of protecting intellectual property rights, it aims to curb China's high-tech development.

The United States sees China's rapid growth in science and technology as a threat to American leadership, so the fight against Chinese technological advances is at the heart of the trade war.On the one hand, the United States increases tariffs on the export of key equipment to China in the field of technology; on the other hand, it also restrains the development of Chinese technology by controlling the industrial structure of Chinese investment in the United States.

Second, reduce the china-us trade deficit.

In 2017, for example, the U.S. trade deficit in goods was $796.1 billion, the highest in nearly a decade.The trade deficit with China was $375.2 billion.The high deficit, even as the dollar continues to fall, is a sore point for Washington's trade with China.So trump has proposed cutting the deficit with China by $100 billion in 2018.The idea is also to woo swing states to the polls in the mid-term elections, cementing republican rule.

Third, the impact of stainless steel.

In recent years, China's stainless steel production continues to grow, exports in recent years are also in a sustained growth.Because this other country is opposite the trade friction of our country stainless steel product also increases gradually.Since the export of stainless steel products, the board and strip products account for about 80%, so since 2016, the amount of China's stainless steel products exported to the United States has decreased from 205,000 tons to around 70,000 tons, accounting for about 2% of the total exports of stainless steel.By 2017, the growth rate of domestic stainless steel exports continued to slow by about 12 percentage points to 3.5%.Stainless steel exports to the United States remain low.As the global stainless steel supply is currently in surplus, China's stainless steel production is increasing year by year.With China and the United States trade friction gradually heating up, not only the United States of China's stainless steel products anti-dumping policy will continue, other countries on China's stainless steel anti-dumping investigation is likely to continue to increase, negative stainless steel exports.

As for the end products of stainless steel, mechanical manufacturing accounts for about 40% of the consumption of stainless steel, medical treatment and some metal products account for 20%, and transportation accounts for 10%.Therefore, with the continuous escalation of trade friction, the export of China's stainless steel terminal products may be affected, which will increase the domestic stainless steel market surplus situation.