China’s Steel Exports Set to Hit Record Despite Rising Trade Barriers

Economic

Commodity

Summary:

China’s steel exports are projected to reach an all-time high in 2025, driven by the need to find markets for surplus steel amid domestic stagnation....

Record Exports Defy Predictions

China is on track to export between 115 and 120 million metric tons of steel in 2025, marking a 4% increase from last year. Analysts had initially expected exports to fall due to unprecedented global trade barriers. The surge reflects both domestic overcapacity China’s steel consumption peaked in 2020 amid the property market collapse and the urgency among steelmakers to move metal before additional restrictions take effect.

To sustain exports, Chinese steelmakers are pivoting toward emerging markets with lower trade barriers, including the Middle East, Central Asia, and North Africa. Baosteel, China’s largest listed steelmaker, projects 10 million tons of exports to these regions this year. Exports to Saudi Arabia, Malaysia, and Thailand rose 24%, 14%, and 13%, respectively, in the first seven months of 2025, even as shipments to Vietnam and South Korea fell due to anti-dumping measures.

Another strategy has been a product shift from higher-value finished steel to lower-value semi-finished products, such as steel billets and rebar, which face fewer tariffs. Billet exports tripled in the first seven months, while rebar shipments rose 77%. Meanwhile, hot-rolled thin steel, frequently targeted by tariffs, declined 23%. Despite higher volumes, the export value fell slightly, reflecting this move toward less complex products.

Trade Tensions and Government Concerns

China’s export drive risks provoking further protectionist measures. Since 2024, 54 tariffs and trade barriers have been imposed on Chinese steel more than in the preceding five years combined. The European Union and Mexico have signaled additional restrictions, while domestic authorities are concerned that exporting low-value products could undermine long-term competitiveness. Beijing is reportedly considering higher export taxes to encourage value-added production.

While 2025 may set a record, analysts expect China’s steel exports to peak this year or next. Forecasts for 2026 suggest a decline to 100–105 million tons, though even this level would surpass the output of most steel-producing nations except India. Rising trade disputes, protectionist policies, and saturated overseas markets are likely to constrain further growth.

As Baosteel’s general manager Baojun Liu stated, “As a steel company at the current scale, we must export,” highlighting the tension between corporate imperatives and evolving trade realities.

China’s record steel exports underscore the global interdependence of supply chains and the fragility of international trade policies. While short-term volume growth alleviates domestic overcapacity, the shift toward semi-finished products may increase tensions with trade partners, potentially accelerating protective measures that could reshape the global steel market.

Source: Reuters

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Pepperstone

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Economic

WHERE WE STAND – Markets began the new trading week, yesterday, in a very similar vein to how we finished the last, amid a broad lack of conviction across the board, in a continuation of the ‘calm before the storm' vibe that we saw on Friday.At risk of repetition, the cagey and tentative nature of trade makes a lot of sense considering that the week ahead brings 5x G10 central bank decisions, plus a ton of impactful economic data releases. With such a packed slate of event risk looming large, it makes sense to see participants taking down position size, or even choosing to sit on the sidelines altogether.

The lack of impactful news- or data-flow through the day certainly didn't give participants much reason to enter the fray either, besides a brief wobble in risk on news that China have found Nvidia to be violating anti-monopoly laws. Quite why this matters, though, when the Nvidia assume no sales to China in their guidance, and when China are advising firms not to buy Nvidia chips anyway, is beyond me. Still, I struggle to turn my laptop on most mornings, so perhaps am not best placed to comment on the tech sector!

Speaking of Nvidia, though, I did some digging yesterday, given that endless common inches seem to be getting taken up recently on the issue of equity market concentration, and narrow market breadth. For all that brouhaha, the best performing ‘Magnificent Seven' stock this year – Nvidia – is only the 58th best performer in the S&P 500 at large. That hardly screams that we should be panicking about a tightly concentrated market, quite the opposite in fact, with the rally being relatively broad-based in nature.

That said, I do see some cause for caution in the short-term, even as the SPX & NDX hit new record highs. With money markets discounting ~70bp of Fed cuts by year-end, the bar for a dovish surprise from the FOMC tomorrow night is a high one, potentially an impossibly high one to meet. Hence, with a 25bp cut fully discounted, any guidance that J-Pow offers is likely to be interpreted as hawkish relative to how markets are positioned. As a result, it increasingly feels as if Wednesday's FOMC meeting could shape up as a classic ‘buy the rumour, sell the fact' event, especially with spoos having rallied 7% in five weeks since the August lows.

Still, even if some headwinds may crop up in the short-term, my faith in the longer-run bull case remains, hence I'd be viewing any equity dips as a buying opportunity. The underlying economy remains resilient, earnings growth is solid, calmer tones continue to prevail on the trade front, and an easier monetary policy backdrop over the next 6-12 months should also give the rally a nice helping hand. We might, though, if the FOMC proves a ‘sell the news' event, need to get over the hump of typically negative EoM/EoQ seasonality first.

Away from the equity complex, there wasn't overly much signal to be extracted from yesterday's market moves – Treasuries firmed across the curve, albeit remaining inside last week's ranges, while the dollar ticked a touch softer against most DM peers, in turn seeing gold advance once more & print a new record high.Although that USD demand faded somewhat as the day progressed, it was enough to take cable to its best levels since early-July. To be completely clear, this is not some sort of sudden vote of confidence in UK Plc, but almost purely a reflection of a broadly firmer greenback, again helping to re-affirm my longstanding view that the best way to play the ‘bearish UK' theme remains either short GBP in the crosses or, perhaps more simply, being short the long-end of the Gilt curve.

LOOK AHEAD – That deluge of event risk that I've been harping on about, starts today.

Last month's US retail sales figures highlight the docket, with headline sales seen having risen just 0.2% MoM in August which, if realised, would be the slowest monthly rise since May. While the control group metric, which broadly represents the GDP basket, is set to post a healthier 0.4% MoM rise, participants will be watching the release closely for any signs that a stalling labour market may be seeing consumers begin to tighten their belts.

Elsewhere, the US also releases industrial production stats for August today, with production data also due from the eurozone. On this side of the pond, though, focus will fall firstly on this morning's UK employment report, set to show unemployment having held steady at 4.7% in the three months to July, before participants turn their focus to the latest ZEW sentiment figures from Germany.Rounding things out today, we have last month's Canadian CPI which, despite likely rising back to 2% YoY shouldn't derail the BoC from delivering a 25bp cut tomorrow, as well as a 20-year Treasury auction tonight, which should go relatively well given how easily last week's supply was digested.

Source: Pepperstone

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Golden Gleam

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Economic

Gold's stellar rally to successive record highs shows every sign of continuing for the rest of the year, but a healthy correction is on the cards before breaching the $4,000 per ounce milestone in 2026, traders and industry experts said.

Strong tailwinds such as expectations for monetary easing by the U.S. Federal Reserve, lingering geopolitical tensions, worries over the Federal Reserve's independence, and strong central bank purchases have prompted investors to flock to the precious metal.

"The long-term gold bull run looks intact, as demand, particularly from central banks and ETFs, continues to rise at a faster pace," Renisha Chainani, head of research at Mumbai-based refiner Augmont said, on the sidelines of the India Gold Conference in New Delhi.

"But gold is currently in overbought territory and may see a 5-6% correction in the short term, before consolidating and rising again to reach new highs above $4,200 in 2026," she said.

Spot gold was trading around $3,680 per ounce on Tuesday after hitting a record $3,689.27 earlier in the session, having gained about 40% so far this year, following a 27% jump in 2024.

Nearly all industry participants at the conference were expecting gold's bull run to continue into 2026 on a reduction in U.S. interest rates, strong investment demand and geo-political risks.

"Analysts have been hedging prices to reach $4,000 in 2026. But it's really difficult to say, because every projection that we've looked at the price has gone to that level much faster than we expected," said Nicholas Frappell, global head of institutional markets at ABC Refinery.

The U.S. central bank is widely expected to cut interest rates at the end of their monetary policy meeting on September 17. Trump has been pushing the Fed to cut rates and has repeatedly criticised Federal Reserve Chair Jerome Powell for acting too slowly.

Gold, traditionally known as a favoured hedge against geopolitical and economic risks, also thrives in a low-interest rate environment.

"Gold prices are in uncharted territory, having not spent too much time in the $3,400's and $3,500's," said Philip Newman, managing director at consultancy Metals Focus, adding the firm expects prices to climb to around $3,800 at the end of the year.

"We could see a potential correction ahead after this price rally, but we also see that as a buying opportunity for investors who are waiting on the sidelines to get into the market. We could see gold prices scale above $4,000 in 2026."

Source: Yahoo Finance

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Gerik

Economic

Investor Optimism Drives Market Gains Ahead of Fed Rate Cut

On September 15, 2025, stock markets across Europe and the U.S. saw broad gains, fueled by investor optimism ahead of the U.S. Federal Reserve’s anticipated interest rate cut. The mood was further uplifted by news of a framework agreement between the U.S. and China regarding the TikTok platform, which is set to be finalized by Presidents Trump and Xi Jinping on September 19.

In the U.S., the S&P 500 and Nasdaq Composite both reached new record highs, closing at 6,615.28 points (+0.5%) and 22,348.75 points (+0.9%), respectively. The Dow Jones Industrial Average also saw a modest increase of 0.1%, closing at 45,883.45 points.

Positive Sentiment from Economic Data and Fed Expectations

Global stock markets have enjoyed a robust rally in recent weeks, buoyed by a series of U.S. labor and inflation data that have provided the Federal Reserve with room to resume interest rate cuts. The labor market continues to show signs of weakness, while inflation has remained more subdued than feared following President Trump’s trade wars.

The Fed is widely expected to lower borrowing costs by 25 basis points, though some observers predict the reduction could be as high as 50 basis points. Investor sentiment has been supported by hopes that the Fed will continue its dovish stance, with signals for additional rate cuts in the coming months.

Optimism in European Markets

European stock markets also saw gains, with the CAC 40 in Paris rising by 0.9% to 7,896.93 points and the DAX in Frankfurt increasing by 0.2% to 23,748.86 points. However, the FTSE 100 in London was slightly down, falling less than 0.1% to 9,277.03 points. The positive momentum in Europe reflects broader market confidence driven by expectations of continued accommodative monetary policy from central banks.

Another factor boosting market sentiment was the announcement of a framework agreement between the U.S. and China regarding TikTok. The agreement marks a rare breakthrough in the long-running negotiations between the two countries and has further eased trade tensions. As the deal heads toward finalization, it is seen as a positive sign for risk sentiment, especially in global markets that have been concerned about U.S.-China relations.

Local Markets React to Positive Global Trends

In Vietnam, local stock indices mirrored the positive global trend. The VN-Index rose by 17.64 points (1.06%) to close at 1,684.90 points, while the HNX-Index increased by 4.18 points (1.51%) to reach 280.69 points. This reflects growing investor confidence, fueled by the global optimism surrounding monetary easing and geopolitical developments.

The optimism surrounding the U.S. Federal Reserve’s expected interest rate cut, coupled with a breakthrough in U.S.-China relations over TikTok, has led to strong performances in global stock markets. Investors are hopeful that these factors will provide continued economic support in the coming months, while local markets like Vietnam also experienced positive movements, aligning with the global bullish sentiment.

To stay updated on all economic events of today, please check out our Economic calendar

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Gerik

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China’s Private Investment Maintains Strong Growth Amid Challenges

China's economy has continued to demonstrate solid growth in August 2025, driven by resilient private sector investments. According to Fu Linghui, spokesperson for the National Bureau of Statistics (NBS), private investment remains strong, with businesses adapting flexibly to external challenges and expanding their market presence.

Despite facing global uncertainties, private enterprises have made substantial strides in emerging industries such as new energy vehicles, solar products, and lithium batteries. Furthermore, private companies are actively planning investments in future technologies like artificial intelligence and robotics. These efforts are expected to further expand the growth potential for private investments in China.

Private Enterprises Driving Technological and Green Innovations

Private companies in China have become a key force in driving technological progress, especially in high-tech sectors. Since the beginning of the 14th Five-Year Plan (2021-2025), private companies have accounted for more than 92% of China's high-tech enterprises, underscoring their crucial role in shaping the country’s innovation landscape.

Additionally, private businesses have shown remarkable resilience in overcoming operational difficulties. They have adapted to changing market conditions while maintaining production stability, showcasing both recovery capacity and creative ability. The government's policy support has played a key role in facilitating the growth of private investments, with initiatives aimed at improving investment conditions, market access, and financial support.

Government Policies Support Private Investment Growth

The official implementation of the Private Economy Promotion Law has sent a strong signal of support for the private sector’s development. Various governmental departments are actively improving investment mechanisms, further optimizing market access, and strengthening support for private businesses in areas such as capital and resources.

Despite the pressures faced by some private enterprises, China's private sector remains a strong driver of economic growth, with a promising outlook for continued expansion. As of the latest data from the National Development and Reform Commission (NDRC), the private sector continues to play a significant role in advancing China's technological progress.

Entrepreneurship on the Rise: Record Number of Private Businesses Established

Data from China’s State Administration for Market Regulation highlights the ongoing vibrancy in the private business sector. Around 4.35 million new private businesses were registered in the first half of the year, marking a 4.6% increase compared to the same period last year. Additionally, approximately 33,000 new foreign-funded companies were established, reflecting strong foreign interest in the Chinese market.

In total, 13.28 million new companies were registered across China during the first half of the year, reflecting a dynamic and thriving entrepreneurial ecosystem. This continued growth in private investment and entrepreneurship indicates the resilience and potential of China’s economy, particularly within the private sector.

China’s private sector remains a powerful engine for technological and economic advancement, despite the challenges posed by both domestic and global factors. The ongoing strong growth in private investment, particularly in green and high-tech industries, positions China’s economy for continued resilience and innovation. With continued government support and a favorable investment environment, the future of private investment in China looks promising, contributing to the broader economic recovery and transformation.

To stay updated on all economic events of today, please check out our Economic calendar

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Gerik

Economic

Fed’s First Rate Cut of 2025 and Market Expectations

The U.S. Federal Reserve is widely anticipated to announce its first interest rate cut of 2025 during its meeting this Wednesday, likely reducing rates by 25 basis points. This would mark the first easing of monetary policy since December, signaling a shift from the aggressive rate hikes of the past few years.

However, the main concern among investors is whether this rate cut will be an isolated action or the start of a series of reductions. The Fed is navigating a complex economic landscape, where a weakening labor market and persistent inflationary pressures make future decisions particularly challenging.

The Role of the Fed’s “Dot Plot” and Political Pressures

An important indicator of the Fed’s future policy trajectory will be the updated "dot plot" a quarterly chart showing the interest rate expectations of Fed officials. The June 2025 dot plot showed a consensus for two rate cuts in the year, but with the current economic uncertainty, further cuts are still a subject of debate.

The political landscape also adds another layer of complexity. President Donald Trump has repeatedly criticized Fed Chair Jerome Powell for acting too late on rate cuts and has been pushing for a more dovish approach. He is also working to install his economic advisor, Stephen Miran, as a Fed governor, further influencing the central bank’s policy direction.

Diverging Views: Fed’s Caution vs. Wall Street's Expectations

Former Fed officials like Loretta Mester remain cautious, arguing that a single 25 basis point cut is unlikely to resolve the political pressure on the Fed. Mester believes that while a modest cut could help ease labor market pressures, it won’t signal a sustained easing cycle.

In contrast, Wall Street experts are more optimistic. Morgan Stanley predicts that the Fed will continue cutting rates in subsequent meetings in October and December, ultimately reducing the target rate to 3.5% by January 2026. Other economists, such as Luke Tilley from Wilmington Trust, forecast three consecutive cuts over the next three meetings, driven by weakening labor market data.

Inflation and Employment Data Impacting Fed’s Decision

Despite the push for easing, inflation remains a persistent concern. The latest data shows that inflation is stuck around 3%, which is above the Fed’s target. Additionally, the labor market is showing signs of weakness. In August, the U.S. economy added only 22,000 jobs, far below expectations of 75,000. This slowdown in job creation, coupled with an increase in the unemployment rate to 4.3%, could prompt the Fed to prioritize supporting labor markets over controlling inflation.

Former Fed Kansas City President Esther George emphasized that while inflation is still a concern, the Fed’s next moves will depend heavily on how the central bank perceives the “restrictiveness” of its current policy.

The upcoming rate cut by the Fed is a pivotal moment, but the bigger question is whether it marks the beginning of a broader easing cycle or if it will be a temporary adjustment. With the U.S. economy facing a weaker labor market and persistent inflationary pressures, the Fed’s next steps will have significant implications for both economic growth and inflation management. The central bank will need to strike a delicate balance as it navigates the complexities of monetary policy in 2025.

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Gerik

Economic

Historic Agreement Marks New Era for Nuclear Energy

In a groundbreaking move, the U.S. and UK have signed a historic agreement to jointly advance nuclear energy, marking the beginning of what both countries are calling a "golden era" for the sector. The deal, set to be announced during U.S. President Donald Trump's visit to the UK, is aimed at reducing reliance on traditional energy sources and addressing the global energy crisis while fostering economic growth and long-term energy security.

The agreement includes a commitment to streamline nuclear reactor licensing processes, with both countries aiming to cut the approval time for new projects from 3-4 years down to just 2 years. This will accelerate the development of next-generation nuclear power plants and related infrastructure, creating new opportunities for innovation and economic growth.

Strategic Partnerships and Major Investments

The partnership involves large-scale projects and investments. One of the key initiatives includes the collaboration between U.S.-based X-Energy and UK’s Centrica to develop up to 12 advanced modular reactors (AMRs) in the northeast of the UK. Chris O'Shea, CEO of Centrica, emphasized that this cooperation would help create a sustainable, affordable, and low-carbon energy system.

Additionally, a major £11 billion ($15 billion) project is underway to develop data centers using small modular reactors (SMRs) in central England, specifically at the site of the former Cottam coal plant. This project involves significant players like Holtec International (U.S.), EDF (France), and Tritax, with thousands of local jobs expected to be created.

Nuclear Collaboration to Improve Efficiency and Speed

One of the most innovative aspects of the agreement is the shared approach to nuclear management. The deal allows one country’s nuclear reactor safety findings to be used in the other country’s licensing processes, dramatically cutting down the time required for reactor approvals. This collaboration aims to make nuclear energy projects more efficient and timely, enabling faster deployment of clean energy solutions.

The UK government has also committed £14 billion ($19 billion) to the Sizewell C nuclear plant and is backing Rolls-Royce's development of the UK's first SMR. Meanwhile, Rolls-Royce is also extending its efforts in the U.S. to manage its reactors, creating new job opportunities and investment across both nations.

Long-Term Strategic and Economic Benefits

British Prime Minister Keir Starmer expressed confidence that the agreement would usher in a "golden age" for nuclear energy, noting that it would reduce household energy bills over the long term while creating thousands of good jobs in the short term. The deal is expected to bring both economic and strategic benefits, enhancing energy security by reducing dependence on traditional energy sources and improving resilience against market fluctuations.

U.S. Energy Secretary Chris Wright underscored that the agreements provide a framework for both nations to access the commercial potential of nuclear energy, with additional focus on advancing technology and investments in UK data centers.

The historic nuclear energy agreement between the U.S. and UK signals a transformative shift in the global energy landscape. By accelerating nuclear power development, reducing regulatory hurdles, and fostering cross-border collaboration, this deal lays the groundwork for a more sustainable, secure, and economically prosperous future. As both countries lead the way in nuclear innovation, this partnership is expected to be a major driver in the global push for clean energy solutions.

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