COVID-19 - trade impact on the metals industry by market 2020

Currently, China manufactures about 20 percent of intermediate products traded in the global supply chain and Chinese intermediate products represent a critical element of the global value chain of the metal and metal products sector. For this reason, the disruption caused by COVID-19 in China alone is expected to reverberate on the economy of many other countries worldwide. In the European Union, the metal industry is expected to lose over one billion U.S. dollars from a two percent reduction in China exports of intermediate inputs.

China's output of metal products

As a fast-growing economy, China is one of the major producers of various metals necessary for industrial production. The country produces metals not only to meet the internal demand, but also to export overseas. As of 2017, China’s raw steel production was over 831 million metric tons. Its export volume of semi-finished and finished steel products amounted to over 68 million metric tons in 2018. In the same year, rolled aluminum exports from China were worth over 15 billion U.S. dollars, up from 4.6 billion U.S. dollars in 2009. China’s share of fabricated metal product exports between 2013 and 2017 accounted for 23 percent of the global market.

International trade of metals

In 2018, China was the largest steel exporter, with a trade surplus of 54.4 million metric tons. On the other hand, Europe and North America were major importers of steel. That year, the trade deficit of North American steel imports and exports amounted to 31.3 million metric tons. During that same year, Japan was the second-largest steel exporter, with approximately 36 million metric tons of steel exported to countries across the globe. Despite the large trade flows of metal products across countries, some countries impose various trade restrictions to favor local producers of metals. Currently, the trade war between the U.S. and China is one of the major events affecting global trade. As of February 2020, the estimated levy from tariffs imposed on U.S. steel and aluminum imports to China amounted to about one billion U.S. dollars.