The hottest steel industry affects the small stock

2022-08-12
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The impact of the steel industry on the small stock market sector was hurt

the US Tariff Act fell, and the steel sector in Shanghai and Shenzhen fell collectively in the afternoon. Yesterday, the Shanghai and Shenzhen stock markets closed slightly higher. Among all the more than 300 industry sectors, the steel sector ranked first in terms of decline, and more than 20 of the 36 steel stocks fell

indirect impact on China's steel industry

yesterday, trump signed a tariff decree to impose a tax of 25% on imported steel and 10% on imported aluminum products, which will be implemented in 15 days. Except Canada and Mexico, other countries are on the list, but there is room for negotiation

as soon as the news was released, China's Ministry of Commerce and the China Association of steel industry and trade unions made a clear accusation of Trump's harmful practices. The head of CISA publicly responded to the media: "this is the United States' pursuit of trade protectionism on the grounds of protecting the domestic steel industry, undermining WTO rules and disrupting the international trade order. This behavior is harmful to the global steel industry and seriously damages the interests of steel products consumers, especially American consumers. CISA firmly opposes it."

according to the announcement issued by the American Iron and Steel Association in January, the total import volume of steel in the United States in 2017 reached 38.121 million tons, and the import source countries were: South Korea 3.753 million tons, Turkey 2.191 million tons, Japan 1.504 million tons, Germany 1.405 million tons, China 1.18 million tons. In 2017, steel and products accounted for 4.5% of China's exports, 2.6% of exports to the United States, 1.0% of exports to the United States and 0.9% of exports to the United States

industry analysts pointed out that at present, steel accounts for a slightly higher proportion of China's exports, while aluminum accounts for a relatively low proportion, while only 3.3% of the main income of the ferrous metal smelting and processing industry comes from exports, that is, the proportion of exports in the industry is relatively low. From this point of view, the impact of a single policy is limited

however, some analysts said that the imposition of steel tariffs by the United States would indirectly affect China's exports through steel trade in other countries. Take South Korea as an example: in 2017, China exported 11.4 million tons of steel to South Korea, while South Korea exported about 3.75 million tons of steel to the United States. In this trade process, although China did not directly export crude steel to the United States, a certain proportion of the crude steel exported by South Korea to the United States actually came from China

the impact on China's stock market is obvious

stimulated by the news of steel and aluminum tariffs, the three major indexes of the U.S. stock market closed slightly higher on the 7th. But steel stocks fell. As for a shares, as of the close, the steel sector fell 1.96%, leading the decline among all 314 sectors, including Valin steel fell 9.42%, Chongqing steel fell 3.49%, Baosteel fell 2.99%, Liugang fell 2.33%, Bayi Steel fell 1.15%, and TISCO stainless fell 2.37%

compared with steel stocks, aluminum stocks performed quite smoothly yesterday, with Chinalco down 0.19%, changaluminum up 0.15%, Zhongfu industry up 0.23%. Recently, steel stocks have always remained in a depressed state, with the steel sector down 3.34% in the past five trading days and down 7.24% in the past ten trading days, all ranking first in the decline list, And 20 will ensure the raw material supply of Santon new energy cathode materials business, with a decline of 9.29% for the first trading day. The appearance in contact with the sample is made of sticky soft rubber. Valin Iron and steel, Baosteel shares, etc. have fallen continuously recently

relevant analysts of Guosen Securities said that benefiting from the capacity reduction policy, the domestic steel market is in a tight balance between supply and demand, and steel enterprises are less dependent on exports. The direct impact of changes in export policies on the export volume of China's steel market is limited. In 2017, affected by the domestic supply side structural reform, the domestic steel production was effectively controlled, and the supply and demand pattern of the steel market was greatly improved. The export volume of steel has decreased significantly, on the one hand, because various international anti-dumping and countervailing investigations have restrained the export of China's steel to a certain extent, on the other hand, because the sharp increase in domestic steel prices has narrowed the price difference between domestic and foreign steel, the space for steel export premium has narrowed, and steel mills have taken the initiative to reduce the export proportion

however, the U.S. tariff policy still plummeted steel stocks, and the negative sentiment of investors has been quite obvious. Analysts said that recently, the steel sector has been relatively injured. Although the mood will not affect the company's operating conditions, it will affect investors' transactions. Therefore, we should pay attention to volatility risk. It is better not to touch steel and aluminum plates in the short term

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analysis of the high tariff imposed by the United States on steel and aluminum products

■ why and how are the tariffs imposed on steel and aluminum in the United States

trump said on the same day that because imported steel and aluminum products endanger the "national security" of the United States, a 25% tariff will be imposed on imported steel products and a 10% tariff on imported aluminum products. The tariff will take effect on the 23rd

the United States levied these two tariffs on the basis of the "232 investigation" conducted by its Ministry of Commerce. According to section 232 of the trade expansion act of 1962, the U.S. Department of Commerce has the right to initiate an investigation into whether imported products harm U.S. national security

the U.S. Department of Commerce launched a "232 investigation" on imported steel and aluminum products in April 2017, and submitted an investigation report to trump in January this year, proposing to protect relevant U.S. industries through tariffs or quotas

trump finally decided to restrict imports through tariffs, and the tariff rate he decided was higher than the proposal of the Ministry of Commerce. As the United States, Canada and Mexico are currently renegotiating the North American Free Trade Agreement, Canada and Mexico will be exempted temporarily, but the possibility of cancelling the exemption in case of failure of the negotiations is not ruled out. At the same time, other economies can also apply for tariff exemption, but the decision is up to the United States

■ how will the new tariff affect the global economy

analysts generally believe that the latest trade protection measures of the United States may trigger a global trade war and damage the global economy and the multilateral trading system

since the subprime mortgage crisis, the global economy has recovered for nine years, and a rare "synchronous recovery" has been achieved in 2017. Once the trade war breaks out, the benign recovery of the global economy will suffer serious setbacks

according to the research of Brookings Institution, a think tank in Washington, if a small trade war breaks out globally, that is, tariffs increase by 10%, the gross domestic product (GDP) of most economies will decrease by 1% to 4.5%, of which the U.S. GDP will lose 1.3%; If a serious trade war breaks out in the world, that is, tariffs increase by 40%, the global economy will repeat the Great Depression of the 1930s

in addition to the global economy, another major victim of the trade war will be the global multilateral trading system. Bowen believes that the new tariff will inevitably impact the WTO. If other countries file a lawsuit to the WTO and win, the US government may ignore the judgment, which will weaken the authority of the WTO; If the WTO decides that the United States will win, other countries will follow suit, and the global trade war will escalate; If other countries do not file a complaint with the WTO, it may mean that the international community has lost confidence in the multilateral trading system. Therefore, no matter what the outcome is, it is not conducive to the multilateral trading system

Caohui, a lawyer at the US Shiqiang law firm, told Xinhua: "the US' 232 clause 'tax on global steel and aluminum products is the most influential trade protection action since the establishment of the WTO. The unilateral trade protection measures based on domestic laws of the United States have fundamentally shaken the trade system under the multilateral framework of the WTO."

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