Trade tariffs take centerstage as world tries to emerge from COVID-19 crisis

The week’s biggest news was China’s Ministry of Commerce announcement that it will extend anti-dumping duties on imports of alloy-steel seamless pipes for high temperature and pressure from the United States and the European Union for another five years.

Following an expiry review launched at the request of the domestic industry, the extension has taken effect from May 10, the ministry said in a statement on its website.

Meanwhile U.S. President Donald Trump said the United States would buy $3 billion worth of dairy, meat and produce from farmers as unemployment soars and the prices that slaughterhouses pay farmers for animals have fallen in the midst of the coronavirus pandemic.


Australia has raised concern that China is considering imposing hefty tariffs on imports of Australian barley, just as tensions rise between the world’s second-biggest economy and one of its biggest suppliers of farm products.

Australia is by far China’s top supplier of barley, exporting about A$1.5 billion to A$2 billion ($980 million to $1.3 billion) worth of the grain a year. China takes more than half of Australia’s barley exports.

The Chinese tariff threat comes as ties have frayed between Canberra and Beijing, exacerbated by a push by Australia for an investigation into the origins of the coronavirus outbreak. China’s ambassador to Australia last month said Chinese consumers could boycott Australian beef, wine, tourism and universities in response to Canberra’s push for the virus inquiry.

Meanwhile in India, the Minister for Food and Public Distribution has said that a massive exercise is underway to supply free food grains and pulses to about 80 crore people across the country under PM-GKAY. FCI has loaded a total of 2641 rakes carrying about 74 lakh tonnes of food grains, setting an all-time record.

The operation has been undertaken by NAFED to provide free pulses to about 19.50 crore households for three months in the country. The Minister also said that there is no shortage of food grains. Procurement of rabi harvest is also on the track.


The steel raw materials markets are being affected to a lesser or greater extent depending on the demand-side and supply-side regional focus, and exposure to oil prices and exchange rate fluctuations, both of which are impacting delivered costs. The current iron ore price is holding up well, whereas that for met coal has dropped.

At a high level, this is the result of differing supply-side trends over recent months, and the reliance on Chinese seaborne demand, for iron ore, which is now strengthening, and Indian demand, for met coal, which is slowing and shrouded with uncertainty.

Gold continued its ascent above US$1,700 per ounce this week, driven by continued weak economic data and massive job losses. While the rest of the precious metals were a mixed bag, the broader base metals market made significant gains this period as Chinese demand has begun to increase again.

Since breaking past US$1,700 on May 1, gold has retained its worth save for a brief two day period this week, which saw the currency metal slip. Soaring unemployment numbers in the US, which recorded 22 million job losses in April, were compounded by almost 2 million lost jobs in Canada, pushing gold above US$1,720 on Friday.

Despite that dismal data, gold exchange-traded funds (ETFs) have continued to make historic gains. In April, gold-backed ETFs added 170 tonnes, increasing holdings to 3,355 tonnes, an all-time high.

Mine closures in South Africa — the leader in output — are likely to lead to supply constraints later in the year, setting the stage for a potential shortage, according to a note from Bank of America Merrill Lynch.

In the base metals space, copper has made a week of straight gains as Chinese demand for the unwrought metal grew by 4.4 percent month-over-month to 460,000 tonnes in April.


After months of a deep and harrowing slide, fuel demand across the world is finally starting to sputter back to life. Traffic data, pipeline flows, and sales at gas stations in the Texas City of San Antonio, Beijing, and Barcelona all suggest that the oil demand slump may have already bottomed out. However, the road to full recovery is going to be harder than climbing out of a subterranean pit, with many oil traders predicting that it might be a year or more before demand returns to pre-crisis levels.

A growing minority are even less sanguine and speculate that it may never get back there again. During the company’s latest earnings call, Royal Dutch Shell’s CEO warned investors of “… major demand destruction that we don’t even know will come back,” 

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