Market sentiment in the Chinese domestic rebar market was optimistic on Thursday March 12 after the National Health Commission (NHC) announced the peak of the novel coronavirus (2019-nCoV) in China has passed.
    China’s domestic rebar prices edged down in the eastern region but kept flat in the north.
    Eastern China (Shanghai): 3,430-3,460 yuan ($492-496) per tonne, down 10 yuan per tonne
    Northern China (Beijing): 3,300-3,340 yuan per tonne, unchanged
    The fall in the Eastern China assessment was attributed to a drop in the rebar futures price in the first hour of trading, which caused some sellers to cut their spot rebar prices to destock.
    The Shanghai Futures Exchange May rebar futures price fell by 31 yuan per tonne to 3,466 yuan per tonne as of 10am, the price later recovered to close up 24 yuan per tonne from a day ago.
    Participants’ outlook became bullish after the NHC announced in the afternoon that the worst of the coronavirus spread in China was over.
    The number of new cases dropped to 15 on March 11 from 202 cases on March 1, according to the NHC.
    Market watchers hope this signals the start of a recovery in demand and a resumption of normality in the rebar market.
    Fastmarkets’ steel reinforcing bar (rebar) index export, fob China main port: $445 per tonne, down $0.50 per tonne
    Offers were unchanged at $445-465 per tonne fob.
    Bids were $15-25 per tonne lower at $430-440 per tonne fob.
    China’s steel mills were willing to take orders at $445-450 per tonne fob but no buyers were ready to buy at those prices, sources said.
    Market chatter
    “End-user demand is rising, but stockists have destocking needs. These factors will cause a fluctuation in rebar prices in the coming one or two weeks,” a trader in eastern China said.
    As at 3pm, billet was being traded at 3,130 yuan per tonne including value-added tax in Tangshan, up 10 yuan per tonne from a day earlier.
    Shanghai Futures Exchange
    The most-traded May rebar futures contract closed at 3,521 yuan per tonne on Thursday, up 24 yuan per tonne from 3,497 yuan per tonne a day earlier.

    Pulses Production Expanding as Consumers Cultivate a Taste for U.S. Lentils and Chickpeas

    Pulses are a versatile group of 12 leguminous crops, including dry beans, dry peas, lentils, and chickpeas (also known as garbanzo beans), which produce an edible seed that grows within a pod. U.S. pulses production has trended higher for several years and for the 2016/17 marketing year, lentil and chickpea production is set to reach consecutive record highs. Strong exports and rising domestic demand are driving the surge in pulse crop production. In particular, Americans are consuming more pulse-focused food products like hummus, which has seen retail sales rise from less than $10 million in the late 1990s to industry estimates in the range of $700-800 million in more recent years, according to the U.S. Dry Pea and Lentil Council.

    Consumption of chickpea-based hummus and other pulse products, such as lentils, is supported by trends toward more healthful and varied snacking, as well as growing demand for gluten-free products. Pulse crops are naturally gluten-free and are also high in fiber and a good source of protein. In recognition of these nutritional properties, the 2010 U.S. Dietary Guidelines for Americans recommends more frequent consumption of lentils, dry peas, and beans and notes that servings of pulses can be classified as belonging to either the vegetable or protein food group.

    Encouraged by growing demand for pulses that has supported rising prices at the farm level, American farmers have increased plantings of lentils, dry peas, and chickpeas while area for dry beans (less garbanzo beans) has remained relatively stable. Areas of expanded plantings and harvested area are largely concentrated in the Northern Plains (Montana, North Dakota, and South Dakota) and the Palouse area of the Pacific Northwest (includes parts of Washington, Idaho, and Oregon). Cool-season legumes grow well in these regions, which are typically characterized by dry land farming practices and are important production areas for small grains, including wheat and barley. Since 2011, as consumer demand for lentils and chickpeas surged, combined harvested area for these crops rose in Idaho (up 73 percent), Montana (up 128 percent), North Dakota (up 274 percent), and Washington (up 71 percent), while wheat planted area either remained fairly level (Montana and North Dakota) or declined (Idaho and Washington).

    U.S. pulse production gains have benefited not only from increased domestic consumption but also from generally rising growth in volume exports. For the 2011/12 marketing year, combined pulses exports were estimated at about 1.78 billion pounds; for 2016/17, exports are projected to reach 2.79 billion pounds and to account for about 43 percent of total production.  Despite the volume increase, over the past several years, the proportion of the U.S. pulse crop entering export channels has generally trended down. This effect is a reflection of growing domestic consumption but masks the important effects of world markets on U.S. markets. For example, following a shortfall in Indian lentil production, dubbed the “dal crisis,” U.S. farmers expanded 2015/16 lentil production by 53 percent over the previous year. In combination with low wheat prices and maintained export and domestic prospects, U.S. farmers are projected to increase lentil production for 2016/17 by a full 120 percent over the 2015/16 estimate.

    Line/bar chart
    This article is drawn from...

    Vegetables and Pulses Outlook: August 2016 , by Hodan Farah Wells and Jennifer K. Bond, USDA, Economic Research Service, August 2016

    This article was updated on 16 March 2020 at 1500 GMT.

    Latest developments:

    • China's factory output posts sharpest plunge in three decades in Jan-Feb.
    • Unprecedented Federal Reserve move fails to calm markets.
    • US share trading halted; market falls 9% on Monday.
    • Spain, France follow Italy in imposing severe restrictions on movement.

    Previous headlines:

    • UNCTAD warns of a $1 trillion cost to the world economy.
    • Cryptocurrencies plunge.
    • Italy's entire population under quarantine measures.
    • Some key industries in Wuhan are told they can resume work.

    As the world grapples with the coronavirus, the economic impact is mounting - with the OECD warning the virus presents the biggest danger to the global economy since the 2008 financial crisis.

    UNCTAD, the UN trade agency, warned of a slowdown of global growth to under 2% this year, effectively wiping $1 trillion off the value of the world economy.

    poll of economists by the London School of Economics found 51% believed the world faces a major recession, even if COVID-19 kills no more people than seasonal flu. Only 5% said they did not think it would.

    There are now some 170,000 confirmed cases of COVID-19 globally, the new coronavirus that emerged in Wuhan, China, in December and is spreading around the world.

    Businesses are dealing with lost revenue and disrupted supply chains due to China’s factory shutdowns. Weeks after China imposed travel restrictions on million of its people, Italy placed quarantine measures on its entire population, with France and Spain imposing similar measures and many other European countries restricting movement and business activity. On 11 March, some key industries in Wuhan were told they can resume, a day after Chinese President Xi Jinping visited the city for the first time since the outbreak began.

    Here are a few ways the outbreak is sending ripples around the world.

    Predicted slump

    China is the world’s second-largest economy and leading trading nation, so economic fallout from COVID-19 also threatens global growth.

    Economists polled by Reuters on March 3-5 said the outbreak likely halved China’s economic growth in the current quarter compared with the previous three months.

    The poll of more than 40 economists, based both in and outside mainland China, forecast growth to fall to a median of 3.5% this quarter from 6.0% in the fourth quarter of 2019, a full percentage point lower than predicted in a Feb. 14 poll.

    “If you’re in a city which has been basically closed down or put (under) virtual house arrest, you’re not going to go out to the streets, you can’t go to the cinema, the restaurants...with all those sorts of things, economic activity will be substantially negatively affected,” said Rob Carnell, head of Asia-Pacific research at ING.

    The Chinese economy is likely to be hit further by reduced global demand for its products due to the effect of the outbreak on economies around the world.

    Data released on 16 March showed China's factory production plunged at the sharpest pace in three decades in the first two months of the year - something which could mean an even greater economic slowdown than predicted in that poll.

    "Judging by the data, the shock to China's economic activity from the coronavirus epidemic is greater than the (2008) global financial crisis," said Zhang Yi, chief economist at Zhonghai Shengrong Capital Management.

    "These data suggest a small contraction in the first-quarter economy is a high probability event. Government policies would need to be focused on preventing large-scale bankruptcies and unemployment." 

    Falling oil, stock prices; central bank action fails to calm markets

    To combat the economic fallout, the US Federal Reserve on 15 March cut its key interest rate to near zero.

    But the move, coordinated with central banks in Japan, Australia and New Zealand in a joint-effort not seen since the 2008 financial crisis, failed to shore up global investor sentiment, with oil prices dipping below $30 a barrel on 16 March, and a 9% slump in share values when Wall Street opened.

    China is the world’s biggest oil importer. With coronavirus hitting manufacturing and travel, the Internationa Energy Agency (IEA) predicted the first drop in global oil demand in a decade.

    "Covid-19 (coronavirus) has spread beyond China and our 2020 base case global oil demand forecast is cut by 1.1 mb/d. For the first time since 2009, demand is expected to fall year-on-year, by 90 kb/d," the IEA said in its monthly report for March 2020.

    On 9 March, oil prices lost as much as a third of their value - the biggest daily rout since the 1991 Gulf War, as Saudi Arabia and Russia signaled they would hike output in a market already awash with crude, after their three-year supply pact collapsed.

    “A WHO declaration of global emergency and U.S.-EU traffic ban is dampening the global energy demand outlook, in conjunction with an intensified price war between Saudi and Russia,” Margaret Yang, market analyst at CMC Markets in Singapore, told Reuters.

    “Bears are dominating the oil market and there might be more downside before a bottom can be reached.”

    Anyone hoping cryptocurrencies might prove a safe haven was disappointed. Bitcoin lost more than 30% of its value in the five days to 12 March, Reuters reported, outpacing losses for stocks and oil.

    “We’ve seen de-risking across all asset markets,” said Jamie Farquhar, portfolio manager at London-based crypto firm NKB. “Bitcoin is certainly not immune to that."

    See also:

    Impact on air travel

    On 5 March - before the US travel ban was announced - the International Air Transport Association (IATA) predictied the COVID-19 outbreak could cost airlines $113 billion in lost revenue as fewer people take flights.

    “The industry remains very fragile,” Brian Pearce, the IATA’s chief economist, told the Associated Press. “There are lots of airlines that have got relatively narrow profit margins and lots of debt and this could send some into a very difficult situation.”

    On March 16, British Airways said it would cut flying capacity by at least 75% in April and May. Other UK airlines, including Virgin Atlantic and easyJet also announced drastic cuts.

    Disruption to commerce

    The shortage of products and parts from China is affecting companies around the world, as factories delayed opening after the Lunar New Year and workers stayed home to help reduce the spread of the virus.

    What is the World Economic Forum doing about epidemics?

    Apple’s manufacturing partner in China, Foxconn, is facing a production delay. Some carmakers including Nissan and Hyundai temporarily closed factories outside China because they couldn’t get parts.

    The pharmaceutical industry is also bracing for disruption to global production.

    Many trade shows, cultural and sporting events across the world have been cancelled or postponed.

    The travel and tourism industries were hit early on by economic disruption from the outbreak.

    Besides the impact on airlines, the UN’s International Civil Aviation Organization (ICAO) forecasts that Japan could lose $1.29 billion of tourism revenue in the first quarter due to the drop in Chinese travellers, while Thailand could lose $1.15 billion.

    For more World Economic Forum coverage of COVID-19, click here.

    JANUARY 24, 2020 / 6:37 PM / UPDATED 17 HOURS AGO

    U.S. says its producers harmed by some structural steel imports


    WASHINGTON (Reuters) - The U.S. government said on Friday domestic producers of fabricated structural steel were being harmed by imports from China, Canada and Mexico.

    The U.S. Commerce Department said in a statement that fabricated structural steel from the three countries had been sold at less than fair value at rates of up to 6.7 percent for Canada, up to 154.1 percent for China and up to 30.6 percent for Mexico.

    It also said steel from China and Mexico had received unfair subsidies at rates of up to 206.5 percent for China and up to 68.9 percent for Mexico. The department said its investigation found that fabricated struc

    tural steel from Canada had not received unfair subsidies.

    Reporting by Eric Beech; Editing by Sandra Maler

     Thomson Reuters.

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