This morning in metals news, Canada plans to impose tariffs and quotas on seven categories of steel, the VIX surged this week to an eight-month high, and China’s steel and aluminum exports held relatively steady last month.
Canada to Impose Steel Safeguards
The Canadian government announced Thursday it plans to impose quotas and tariffs on seven categories of steel, Reuters reported.
A 25% tariff will be applied beginning Oct. 25.
MetalMiner’s Take: Although the popular press will likely emphasize that Canada has now engaged in a trade war with the U.S. on steel, buying organizations should note that the 25% tariffs will be applied, “in cases where the level of imports from trading partners exceeds historical norms,” according to a government statement. Jerry Dias, the head of Canada’s plargest private sector union, said the tariffs will protect from subsidized steel from China and South Korea, according to Global News.
Fear Index Surges
The VIX, sometimes known as the “fear index,” has surged this week.
The index, which serves as an indicator of market volatility, reached its highest level since February.
MetalMiner’s Take: Stocks have since rebounded from a two-day rout. Although the VIX spiked to an eight-month high, these sharp moves in the past few days likely came as a result of the Federal Reserve’s actions on interest rates and the perception of rising inflation. Time will tell if the VIX blip portends any longer-term trend change or not.
Today, the VIX has flattened on news that consumer inflation remains in check. Commodities and stocks don’t have a strong correlation, meaning the movement in one may or may not impact the movement in the other. The only exception to that rule involves precious metals, which tend to increase when the stock market declines.
Chinese Aluminum, Steel Exports
China’s exports of aluminum fell slightly in September while steel exports rose slightly, Reuters reported.