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Tag Archives: manufacturing

Forget the PMI’s, Understand Xi Jinping’s Inner Mongolian

In a scene straight out of the Stalinist playbook, no one dared anything but to do their part pitching in with thunderous applause. Five hundred deputies from across China’s Inner Mongolia Autonomous Region showed up at the regional “people’s” Congress in January 2018 to elect the delegates who would represent them and the region’s 25 million inhabitants at the National People’s Congress held in Beijing that March. Of the 58 names put forward, it was just the one which caused so much fuss....

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COVID-19 speeds up global manufacturing, steel production shift

Global manufacturing was in the doldrums for much of last year, pulled down by weak demand in key consumer-driven segments amid ongoing trade tensions and slower economic growth. Countries such as Japan, South Korea and Germany that rely on exports found it tougher to sell to overseas customers, while the downturn in auto sales in the United States exemplified what was happening to the sector internationally. When the coronavirus outbreak hit in early 2020, it was akin to kicking...

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Much Talk but Little Action

Overview: The S&P 500 staged an impressive recovery yesterday, a sell-off that took it to its lowest level since April 21, to close more than 1% higher on the day, helped set the tone in the Far East and Europe today. Gains in most Asia Pacific markets, but Hong Kong, Shanghai, and India, trimmed this week's losses. Australia's 1.4% rally today managed to turn ASX positive for the week, extending the leg up for a third consecutive week. The Dow Jones Stoxx 600 is up around 1% to...

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Around the tracks: Virus topples global autos and weakens steel coil prices

As some national lockdowns begin to ease, Clement Choo assesses latest indicators of the health of the global auto industry, and the performance of a key input for the sector, steel coil. Vehicle markets saw their first quarter performance take a beating, with existing weak demand pummeled by the coronavirus pandemic as countries around the world reacted by going into lockdown. GM suspended its 2020 profit outlook amid the uncertainty, after it added $16 billion to its cash reserves by...

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What Might It Mean As Global PMI’s Move In Sight Of Reaching Zero?

Can a PMI actually hit zero? We may be about to find out. According to IHS Markit, the Eurozone’s economy is already flirting with that boundary this month. The services index plummeted way beyond March’s revised estimate of 26.4, an astoundingly alarming number in its own way. For April, though, down even more all the way to 11.7. That meant the composite was dragged down to 13.5, obviously a record low (dating back to 1998). And it only manages to come in that high because the...

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Hints of the Second Wave (Demand Destruction) Showing Up Right At The Start of the First

What’s going on right now in the global economy is mostly the first of two pieces. Waves, if you like. The economic shutdown is an artificial dislocation, a non-economic factor that is interrupting regular activity and business for non-economic reasons. Because it is near-total in most places, this first piece is going to produce ridiculous numbers across all the economic accounts.Far more important is the second piece, or second wave. That’s the true demand shock when we find out by just...

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China Macro & Metals: As work slowly resumes, high steel stocks weigh on prices

China’s virtual lockdown due to the coronavirus outbreak in February resulted in soaring steel inventories, which depressed prices and margins. Iron ore has been resilient, but for how much longer? Paul Bartholomew and Sebastian Lewis discuss the impact of the virus and when markets may return to normal. Supply demand imbalance leads to rising inventories The impact of the coronavirus on the economy was revealed by China’s two manufacturing purchasing managers’ indices with both falling to...

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China’s First Virus-Filled Economic Data May Not Be All That Helpful

There were only two possibilities and both related to their release. Either the Communist Chinese government was going to delay them, or would just say, screw it, everyone knows they’re going to be bad so let ‘em fly. There weren’t any questions about the data itself. Sure enough, the first glimpse at China’s economy in its full virus effects was one beyond ugly. Both the manufacturing and non-manufacturing indices plummeted. And the word “plummeted” is understated here. In fact, they went...

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Number Four Gets Back To Looking Nasty

Shocking, perhaps, but in no way unexpected. IHS Markit didn’t just throw a wrench into all that talk about a global rebound, the organization solidly hammered a substantial nail in its coffin. According the flash estimates for February 2020, the US economy hit a skid. The manufacturing version dropped back to 50.8 from 51.9 in January. The rebound on this side, if you could even call it that, appears to have run its course. It’s now three months in a row for Markit’s index to the downside,...

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COTD: Coronavirus Risk To Manufacturing

The holiday is over, but few people are back in offices and factories…the effects of covid-19 will be like those of SARS in 2003: a sharp shock to Chinese growth, followed by a strong rebound. But SARS may not be a reliable guide. China’s economy accounts for 16% of GDP today, up from just 4% then. It has become enmeshed in supply chains of mind-boggling complexity, and just-in-time production leaves little room for delays.  – Economist That Was Then, This Is Now Hat Tip:  Mike Bird ...

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