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IMF sees less severe global recession in 2020

  • Market: Crude oil, Emissions, Metals, Natural gas
  • 13/10/20

The global economy is likely to contract less severely this year as a result of the Covid-19 pandemic than previously expected, the IMF said today.

But nearly every major economy next year will still be below 2019 levels, the IMF said in its latest World Economic Outlook report, which projects that the global economy will shrink by 4.4pc this year.

The IMF in June was anticipating a sharper contraction of 4.9pc this year, but it has since changed the metrics it uses to evaluate economic activity. Under the new metrics, the revised projection is an upgrade of 0.8 percentage points from its previous forecast. The IMF forecasts the global economy to grow by 5.2pc in 2021.

The less downbeat forecast reflects a lower than forecast contraction in the US economy and the eurozone during the second quarter, which the IMF attributes to trillion-dollar stimulus packages that helped consumer demand rebound following relaxation in travel and economic activity imposed to contain the pandemic.

China's emergence from the economic downturn also proved stronger than expected. The report projects China's economic growth at 1.9pc this year and 8.2pc next year, marking the country as an outlier with a combined growth of more than 10pc in 2020-21. By contrast, every other major advanced and emerging economy is projected to shrink or record zero growth this year. IMF forecasts are widely used in modeling for key oil demand projections, including those of the IEA.

The IMF attributes China's fast recovery to a rebound in its exports, including of medical devices and equipment to support the shift to remote working.

The IMF expects the US economy to contract by 4.3pc this year and expand by 3.1pc in 2021. Almost every other economy in Europe, the western hemisphere, Asia Pacific and Africa is expected to follow a similar pattern — a sharp contraction this year followed by a recovery in 2021 that still leaves the economy smaller than in 2019.

The eurozone is expected to shrink by 8.3pc this year and grow by 5.2pc next year. India's economy is forecast to contract by 10pc this year and expand by 8.8pc next year.

The projected economic contraction for oil exporters in the Middle East and north Africa is 6pc this year, followed by a 3.3pc growth in 2021.

"The ascent out of this calamity is likely to be long, uneven, and highly uncertain," IMF director of research Gita Gopinath said.

As in its previous forecasts earlier this year, containing the pandemic is a key uncertain variable behind the forecast. "The virus is resurging, with localized lockdowns being re-instituted," Gopinath said. "If this worsens and prospects for treatments and vaccines deteriorate, the toll on economic activity would be severe."

An alternative outlook scenario, which assumes renewed lockdown measures to contain the pandemic, would result in a sharper global contraction this year and keep next year's growth to just above 2pc. An upside alternative scenario, which assumes early advances in treating the coronavirus and widespread availability of a vaccine, would add an additional 0.5 percentage points of growth in 2021.


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04/04/25

Egyptian rebar clears EU customs as merchant bar

Egyptian rebar clears EU customs as merchant bar

London, 4 April (Argus) — Egyptian rebar has cleared at the Lithuanian port of Klaipeda under a product code that sits under a different EU quota category, a mill test certificate sent to rebar buyers and obtained by Argus shows. The documentation shows a parcel of steel products with the properties and specifications of rebar registered under HS code 722830, which is for hot-rolled bar, not rebar. The material is supplied by an Egyptian steel mill, and the mill test certificate obtained by Argus contains the assertion "HS code for rebar is: 72 28 30 69 00", followed by the signature of a senior quality engineer. The mill's website indicates it produces rebar, rebar in spools and rebar in coil, which fall respectively under the rebar and wire rod EU import quotas. Hot-rolled bar under the HS code 72283069 falls under category 12 for "non-alloy and other alloy merchant bars and light sections", for which there is currently no import restriction on Egyptian material. A trading company is thought to have discharged at least 17,000t of rebar and rebar in coils at Klaipeda on 28 March, after loading at the Egyptian port of Alexandria on 24 February. But it is not clear how much material in total has passed through customs or under which HS codes. As of 1 April, the EU's Egyptian rebar quota is capped at about 27,500t, after previously having had no limitation within the "other countries" allocation of about 138,000t. Some market participants estimated that there were about 80,000t of Egyptian rebar waiting to clear at EU ports on 1 April, but only about 30,000t cleared under the rebar quota on the first day, according to market participants, meaning duties paid by companies clearing material on that day will not be as high as feared. Trade data also show that Bulgaria imported 17,000t of hot-rolled bar from Egypt under HS 72283069 in January 2025, nearly three times as much as the whole EU imported in the full year of 2024 or 2023, a sign that companies are increasingly keen to seek ways around EU safeguards as they tighten. By Brendan Kjellberg-Motton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Tariffs and their impact larger than expected: Powell


04/04/25
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04/04/25

Tariffs and their impact larger than expected: Powell

New York, 4 April (Argus) — Federal Reserve chairman Jerome Powell said today tariff increases unveiled by US president Donald Trump will be "significantly larger" than expected, as will the expected economic fallout. "The same is likely to be true of the economic effects, which will include higher inflation and slower growth," Powell said today at the Society for Advancing Business Editing and Writing's annual conference in Arlington, Virginia. The central bank will continue to carefully monitor incoming data to assess the outlook and the balance of risks, he said. "We're well positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell added. "It is too soon to say what will be the appropriate path for monetary policy." As of 1pm ET today, Fed funds futures markets are pricing in 29pc odds of a quarter point cut by the Federal Reserve at its next meeting in May and 99pc odds of at least a quarter point rate cut in June. Earlier in the day the June odds were at 100pc. The Fed chairman spoke after trillions of dollars in value were wiped off stock markets around the world and crude prices plummeted following Trump's rollout of across-the-board tariffs earlier in the week. Just before his appearance, Trump pressed Powell in a post on his social media platform to "STOP PLAYING POLITICS!" and cut interest rates without delay. A closely-watched government report showed the US added a greater-than-expected 228,000 jobs in March , showing hiring was picking up last month. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump talks up tariff deals as markets slide


04/04/25
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04/04/25

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Washington, 4 April (Argus) — US president Donald Trump held out prospects of a negotiated reduction in high tariffs targeting key US trading partners while insisting that import taxes are here to say. Trump via his social media platform said today he spoke with Vietnam Communist Party leader To Lam, who promised to cut their tariffs to zero on US products. Under the plan Trump unveiled on 2 April, US imports from Vietnam will be subject to a 46pc tariff. Trump late Thursday told reporters that a deal on tariffs is possible "if somebody said that we're going to give you something that's so phenomenal." He mentioned a possible deal with China over the sale of social platform TikTok, which is owned by Chinese company ByteDance. "We have a situation with Tiktok where China will probably say, we'll approve a deal, but will you do something on the tariff?", Trump said. The Trump administration is forcing ByteDance to sell TikTok to a US company, but Beijing must approve the sale. "The tariffs give us great power to negotiate," Trump said. But China's commerce ministry today unveiled a 34pc tariff on all imports from the US from 10 April, and vowed that no exemptions will be granted, unlike in its previous round of tit-for-tat tariffs on US commodities. Trump on 2 April announced a 10pc baseline tax on all foreign imports starting on 5 April, while many major US trading partners would be subject to an even higher tax beginning on 9 April. Imports from the EU would be subject to a 20pc tariff beginning on 9 April and imports from China subject to a 34pc tariff in addition to the previously imposed 20pc tariffs. "CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!", Trump said on social media after the announcement from Beijing. Trump's executive order exempted energy commodities and many critical minerals from new tariffs, as well as trade already covered under the US Mexico Canada free trade agreement (USMCA). But oil and stock markets continued to slide today as economists and investors concluded that the US tariffs and potential foreign counter-measures would lead to a protracted trade war and reduce economic growth globally. The latest tariffs are likely to cut global growth rates by 0.5 percentage points and reduce US GDP growth by 1pc in 2025-26, analysts with investment bank Standard Chartered said in a note to clients today. Federal Reserve chairman Jay Powell, speaking at a conference in Arlington, Virginia, today, warned that the latest bout of tariffs will lead to "higher inflation and slower growth." IMF executive director Kristalina Georgieva issued a similar warning on Thursday evening. Trump retorted via his social media platform that "This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates." What's next? Despite touting possible deals to avoid high tariffs, Trump also said today that investors planning to move manufacturing to the US should expect no changes in his tariff policies. Trump's cabinet also struggled to articulate what comes next, with commerce secretary Howard Lutnick saying that Trump would not lift the tariffs announced this week, while treasury secretary Scott Bessent said deals over tariff levels were possible. Secretary of state Marco Rubio, speaking to reporters on a trip to Brussels, Belgium, said that "it's not fair to say that the economies are crashing — markets are crashing because markets are based on the stock value of companies who today are embedded in modes of production that are bad for the US. "The markets will adjust business around the world, including in trade," Rubio said. "They just need to know what the rules are." By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Silicon, ferro-silicon hit by US tariffs


04/04/25
News
04/04/25

Silicon, ferro-silicon hit by US tariffs

London, 4 April (Argus) — Silicon and ferro-silicon prices in the US are likely to surge because of steep tariffs on imports announced this week, while prices in Europe might fall as countries hit by high tariffs redirect material to the EU. The tariffs announced by President Donald Trump on 2 April exempted a number of minor metals and ferro-alloys, listed in Annex II of the executive order, but ferro-silicon and silicon metal of less than 99.99pc purity were not among the exemptions. The US steel industry is a major consumer of imported silicon products. The tariffs are the second major US trade announcement on ferro-silicon in two weeks after the International Trade Administration (ITA) determined anti-dumping duty rates against ferro-silicon imports from Brazil, Malaysia and Kazakhstan on 25 March. A final decision on anti-dumping duties is due on 12 May, and it remains to be seen how the new tariffs will impact the ITA's decision. 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A trader with stocks in Europe told Argus that if he hears confirmation that the safeguard announcement will be delayed, he and other traders will look to sell material. "Prices are only inflamed because of the safeguarding," the trader said. "If it's a six-month delay, prices might stay firm, but if it's a year, we can't wait." By Maeve Flaherty Additional reporting from Samuel Wood Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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WTI crude falls to 4-year low on escalating trade war


04/04/25
News
04/04/25

WTI crude falls to 4-year low on escalating trade war

Calgary, 4 April (Argus) — The US light sweet crude benchmark WTI fell by as much as 9pc this morning after China retaliated to the US' latest tariff action, while a selloff in global equity markets deepened. May Nymex WTI traded as low as $60.81/bl Friday morning, a more than $6/bl tumble from the settled price in the session before when it gave up $4.76/bl. Prompt month WTI has not been this low since 13 April 2021 when it settled at $60.18/bl. Prices across commodities and equities are down sharply after China on Friday said it will impose a 34pc tariff on all imports from the US from 10 April, a retaliation for new tariffs launched by US president Donald Trump on 2 April . China faces a 34pc import tariff from 9 April, on top of the 20pc tariffs Trump has imposed over the past two months. The prompt-month WTI contract has given up more than $10/bl, or 17pc, in the two days since Trump announced that dozens of countries would be subject to "reciprocal" tariffs, prompting serious concerns over lower global economic growth and a higher chance of a recession. The IMF say tariffs represent a "significant risk" to the global outlook while US-based bank Goldman Sachs said Friday it has cut its oil demand growth estimate for this year to 600,000 b/d from 900,000 b/d, based on its economists' new view of economic growth. Adding price pressure this week has also been the unexpected plans by eight Opec+ members to unwind production cuts faster , upping output in May by 411,000 b/d. Turmoil continued for the second-straight day in equity markets, with the S&P 500, Dow Jones Industrial Average and Nasdaq all down between 3-5pc so far. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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