Münster’s review

China’s attitude against the US government actions has remained calm (see below).

General price development for flanges and raw materials

After a slight but steady decline in P250GH prices in the first quarter, April saw some unexpected, slight price increases of + 2.3%. It is expected that there will be further modest increases throughout May, mainly due to renewed and more intensive controls at the steel mills. Of course, the increased demand from EU countries for price increases also plays a not insignificant role.

Nevertheless, a controlled serenity is required, because we are still far from the maximum prices in January this year. Controlled, for example, can mean that, when placing an order, attention is drawn to the time when the offer is made, in order to protect against possible price increases.

Situation in China

The worldwide topic no. 1 in the steel industry are the protectionist measures of the US government. The measures taken with #section232 are very strongly directed against Chinese exports. But even the fact that China – unlike the EU – has not got a grace period, the Chinese seem relatively relaxed about these measures.

Maybe it’s because the Chinese state is aware that the US, with its soaring exports to China, should not be allowed to spoil the Middle Kingdom. Perhaps the Chinese rate Trump’s actions as voter-oriented actionism rather than as real market surveillance measures.

Overall, it seems as if no doors should be slammed.

On the other hand, China is taking the fight against pollution seriously. In addition to recent environmental protection measures, preparations are under way for the 2nd Census on Pollution Sources, the results of which will be available in 2019.

In advance, it is believed that there are unbelievable 9 million sources of pollution in China. So-called WEchats (Whatsapps groups) are formed for the collection of all sources, so that all sources are to be discovered through extreme participation.

This rigid approach shows once again that the Chinese want to put off the gripe image regarding their production and create a completely new image. This is certainly in all of our interests and in principle very welcome, but also has its price.

Forecast or my view into the crystal ball

The situation will not get easier. A continuous development in the price development is missing and the market as well as the world politics can not be controlled. Nevertheless, it should be assumed that prices from China will not fall back to the 2016 level on sight. The decisive factor will be whether and how prices can be enforced on the market. Because the alternative measure of shrinking margins seems to be exhausted for everyone.

Greetings from Bremen – and have a good time!

Claudia Munster