Chinese Policy Stoking Protectionist Sentiment

Reuters: China's rising output, price rout deepen aluminum industry gloom
Sinking aluminum prices and a ballooning surplus of the metal have deepened the industry's worst crisis in years, intensifying pressure on high-cost smelters to embark on another round of production cuts to revive prices from their malaise.

...Last month, Century Aluminum, controlled by Glencore, announced plans to shutter its 244,000 tonne-per-year Hawesville, Kentucky smelter, blaming Chinese exports and weak prices.

..."In China, production growth and demand growth are completely divorced," said Patel, noting that political factors such as the desire to keep workers employed drive output decisions more than questions of profitability.

..."If China's not going to take price cues, then the ex-China countries will have to take matters into their own hands through protectionism," said analyst Jorge Beristain of Deutsche Bank.
China is exporting its policy mistakes around the globe. Free traders don't have a good argument for why a country such as Australia, the U.S. or Japan, should allow its domestic economy to be wrecked by disastrous Chinese investment policies. Protectionism would force China to absorb the cost of its mistakes.

No comments:

Post a Comment