Eramet voices concerns over impact of China-US trade relations on raw material prices

July 24, 2018

Eramet, Paris, France, has voiced its concerns over the potential impact of China-US trade relations on the market for raw materials, according to Reuters. The metals group reported positive results for the first half of 2018, helped in part by a sharp rise in the prices of manganese ore and nickel, but stated that, “in a context of tensions and uncertainty observed in international trade relations, which increase the volatility of raw materials’ prices, the visibility still remains limited.”

Nickel, used in stainless steel and as a key material in electric vehicle batteries, saw a price rise of an average $13,871 per tonne in the first half of 2018 on the London Metal Exchange, stated Reuters, an increase of 42% compared to the previous year, thought to be driven mainly by falling inventories. However, prices fell sharply in early June, alongside several other materials affected by concerns that a trade row between China and the United States could weaken demand for industrial metals.

“All quoted metals have plunged in the past month,” stated Christel Bories, Eramet’s Chief Executive. “We are being particularly careful to adapt to any change that could hit our markets.”

The United States imposed tariffs in July 2018 on $34 billion of Chinese imports. In response, China has levied taxes on the same value of US products. The US has also imposed 25% tariffs on steel and 10% on aluminium on the EU, Canada and Mexico.

Eramet is said to be reflecting on its medium-term strategic options for the branch. “There are different dynamics (within Aubert & Duval) in terms of markets, profitability, strategic positions, market shares, etc. There had never been an inventory of all these elements. We made it and we are thinking about what would be the best portfolio,” Bories commented.

www.eramet.com

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