Overview
Slowdown is looming in the metals sector, especially in steelmaking, even though prices rose and there was significant global growth in metals consumption in 2017, driven by a proliferation of construction and infrastructure projects. The automotive industry is the main cause of rising aluminium prices, further boosted by the closure of some Chinese plants. Nickel, zinc and copper prices have showed similar recent rises.
Strengths and weaknesses
Half of the world’s steel is produced and consumed in China. In 2018 planned tariffs on Chinese steel imports to Europe and the US may slow down along with the previously healthy construction and manufacturing sectors. Chinese steel consumption should fall in 2018, but it is expected to grow in Europe. Growth in steel consumption is also anticipated in the USA, thanks to President Trump’s planned infrastructure programme, and the proposal to impose customs duties on imports and favour domestic steelmakers.
The advent of tariffs and fluctuations in demand illustrate how unpredictable the metals sector can be. Only by protecting your business from bad debt and having the inside track on future market developments can you hope to trade safely.
A Coface Credit Insurance policy provides continuous access to both.
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