2024-09-25 02:00:22
The announcement by China’s central bank of an ambitious monetary stimulus plan to lift the Asian giant’s economy out of the morass in which it has been developing yesterday sent the share price of steel producer ArcelorMittal and some raw materials down. iron ore and oil – in anticipation that the strategies of the People’s Bank of China (PBoC) will be able to revive domestic demand.
ArcelorMittal, which leads the advances in the Ibex 35 – the alternative index of the Spanish stock market -, with an appreciation of 4.71%, and the stainless steel producer Acerinox, which is the second most bullish amount with a renewal of 3.67% , are seen as the clear benefits of Beijing’s financial authority achieve its goals.
The decline of the demand for Chinese steel due to the loss of losses in its economy in general, and in particular in some sectors that are large consumers of steel – in the case of construction, which is going through a great crisis – has meant that the country – the world’s largest steel producer – has diverted production to other markets, flooding Europe in particular with cheap steel. This oversupply, added to the loss of losses in the European industry and the resulting weakness in continental demand for steel, has placed the EU steel sector in a critical situation, according to European and Spanish employers’ associations in the sector. . Arcelor has extended the long-term idling of a blast furnace in the south of France and it is not certain whether or not it will close one of the two blast furnaces in Gijón.
The Chinese system – unexpected due to the size and simultaneity of the various measures – includes interest rate reductions, the promotion of bank credit through the release of part of the funds that banks have frozen in the so-called mandatory reserve ratios, action lines to promote liquidity in the capital market, and specific measures to shore up the real estate sector. The aggressive rate cut by the US Federal Reserve on Wednesday, which weakened the dollar, has given the PBoC room to launch the attack announced yesterday without much fear of the deterioration of the yuan against the North American currency.
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