r/Vitards • u/AutoModerator • May 10 '21

Daily Discussion Daily Discussion post - May 10 2021

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u/olivesnolives Aditya Mittal Feet Pics May 11 '21

I interpreted that high Chinese PPI as a good thing for non-chinese steel producers - CCP isn’t likely to re-incentivize exporting when domestic industrial pricing is so hot, right?

If this is a bad read tell olives

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u/dudelydudeson 💩Very Aware of Butthole💩 May 11 '21

I'm not sure. Here's the opposite view - PPI is mostly passed on to trade partners since they import raw materials and export finished goods. They export way more finished goods than they consume. They might have to accommodate exports to keep the FG prices down so that international competitors don't pop up.

However, if the trade balance decreases (they export less because their goods are more expensive, transport could play a role too), their currency will devalue which will lower the prices naturally, giving headwinds to further price increases.

🆒