US tariffs fail to disrupt market terms of trade

The United States intends to impose 25 percent tariffs on an additional $ 16 billion of Chinese goods by August 23, adding to the $ 34 million already passed since July 6.

China will respond with 25 percent tariffs on US $ 16 billion in goods as the trade dispute between the world's two largest economies continues to escalate.

As a result, steel product prices in the United States are so strong that imports began to rise again in July, as even with the recently imposed 25 percent tariffs, arbitrage is attractive enough to bring more metal into the country, analysts say.

US domestic steel production rose three percent in the first half of the year.

But this was the case in all 10 of the world's leading manufacturing countries. Indeed, global production rose 4.6 percent during this period and in June was a record year on year 1.84 billion tonnes.

According to the World Steel Association, in June 2018, steel capacity utilization was 78.5 percent, up 3.8 percentage points from June 2017.

The irony is that the steel sector, which fired the first arrows of the trade war, is enjoying such a collective sweet success.

CHINA TO SALVATION?
Accused by nearly everyone else for dumping surplus steel onto world markets over the past decade, China has eliminated a huge amount of domestic steel capacity, much of which was “illegal” and therefore not accounted for in the past.

Eliminating the shortage of cheap low-cost material has reshaped the domestic market and increased profits in a part of the Chinese economy that was previously characterized by high levels of indebtedness and zombie operators.

Official steelmakers in China are raising production in response to these measures.

They are being helped by sliding environmental repression in the steel sector. While steel mills in one part of the country are adopting mandatory regulatory downtime, those elsewhere benefit, the whole process revolving in different parts of the country at different times.
Market interest in the Shanghai rebar contract is high and growing. So far, this has been attributed to a record participation of more than five million contracts seen in the middle of last year, but in the current four million contracts, it matches everything seen before this particular spike.

As China is the world's largest steel producer, this price strength is transmitted throughout the entire global supply chain.

It seems like Chinese funds are doing a lot of relative value trading, selling metals like copper and zinc while occupying everything in black space, from steel arm