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Tag Archives: manufacturing

Insight from Shanghai: NEV regime takes off training wheels as government slashes subsidies

China has put leadership in the development of New Energy Vehicles (NEVs) – battery electric, plug in hybrid and fuel cell vehicles – at the heart of its industrial policy. The country is the world’s largest market for electric vehicles, with 2.3 million battery electric and plug in hybrid vehicles on the road in 2018, accounting for 45% of the global stock. In a draft of the latest development plan for the sector released early December, the government envisages that NEVs will account for a...

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China Macro & Metals: Steel output falls, but property creates bright spots

Chinese steel production posted a rare drop in October, while domestic steel prices have been buoyed by the property sector. Paul Bartholomew and Sebastian Lewis analyze China’s key economic indicators, and what they mean for the metals sector. Crude steel production growth falls for first time in nearly 4 years   China’s crude steel production fell 1% on year in October, marking the first time output has contracted since the beginning of 2016. The fall was mainly due to production...

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All Signs Of More Slack

The evidence continues to pile up for increasing slack in the US economy. While that doesn’t necessarily mean there is a recession looming, it sure doesn’t help in that regard. Besides, more slack after ten years of it is the real story. The Federal Reserve’s favorite inflation measure in October 2019 stood at 1.31%, matching February for the lowest in several years. Despite constantly referencing a tight labor market and its fabulous unemployment rate, broad pricing pressures remain scant....

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Tariffs and tribulations: recasting US metals industries

“Trade wars are good, and easy to win,” President Donald Trump tweeted in March 2018 after imposing sweeping tariffs on US imports of steel and aluminum. The application of a little-known trade remedy sent shockwaves across the metal markets and upended well-established supply chains. More than two years have passed since the Section 232 investigation was carried out by the US Department of Commerce, under provisions in a 1962 trade act, and 20 months since the tariffs were imposed on the...

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The ISM Isn’t An Isolated Case

They absolutely loved the China PMI numbers, after having taken no note of Japan’s IP, dismissed Markit’s slightly higher revisions, and then totally hated the ISM’s Manufacturing PMI. That last one was supposed to join the others in moving substantially upward, contributing to widespread hopes all recession fears have been extinguished even this late into 2019. Instead, the Institute of Supply Management index continues to suffer. This one hurts, too, because it was this outfit who really...

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Weekend’s PMI Joy Was Spoiled Before It Ever Got Started

The weekend began with pure joy over PMI’s before it ended in deep disappointment early Monday…over a PMI. It started in China. That country’s National Bureau of Statistics (NBS) released its November 2019 numbers for manufacturing and non-manufacturing sentiment. According to the government’s calculations, the gauge for manufacturing ticked back above 50 last month for the first time since April. At 50.2, that was up from 49.3 in October. Assuming that this better-than-expected rebound is...

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Manufacturing Sector Contraction Continues, Led By New Orders – ISM

Of the 18 manufacturing industries, five reported growth in November: Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; and Computer & Electronic Products. (Tempe, Arizona) — Economic activity in the manufacturing sector contracted in November, and the overall economy grew for the 127th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®. The report was...

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Do PMI Trends Have A Midpoint?

It was a huge sigh of relief, seen as confirmation of the word “transitory.” Oil prices in late 2014 had crashed and while globally monetary officials tried to reassure everyone it was a good thing, a supply glut giving consumers something like a tax cut, the wipeout was still unnerving. And that uneasy feeling was reinforced by forward-looking economic data that ended 2014 on an increasingly sour note. Early 2015, however, it began to look much better. Janet Yellen, in particular, had found...

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Around the tracks: Auto sales, coil prices unlikely to gain traction before 2020

This new monthly feature looks at key auto markets around the globe, including output and sales trends and the impact on relevant steel and metals prices. The auto sector accounts for around 25% of steel consumption in the US and Germany, 7% in China and 12% in India. The sector will play a growing role in metals demand in emerging nations. Global manufacturing has undergone a severe downturn this year, due in large part to US-China trade tensions undermining investor confidence. Consumers...

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Powell’s Strong Economy Canceled By Powell’s Data

US Industrial Productions continues to more and more resemble the worst of the Euro$ #3, that “manufacturing recession” of four years ago. Back at the end of 2014 and lasting well into 2016, IP was led lower by the oil crash among other problems. They called it a supply glut but we all know that wasn’t ever the case. What changed was demand, and the lack of sufficient demand caused production to eventually plummet. In other words, one of the only parts of the US economy that had been actually...

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