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Economic Week in Review

As indicated, Caixin’s Chinese manufacturing PMI increased to 50.8 in March, up from 49.9 in February. Markit Economics reports “China’s manufacturing sector finished the opening quarter of 2019 on a positive note, with operating conditions improving for the first time since last November.

Firms signaled slightly quicker rises in output and overall new work, while employment increased for the first time in over five years … Sentiment regarding the 12-month business outlook improved to a ten-month high, amid hopes of further improvements in market conditions.”

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But trade barriers have translated into a disconnect between China’s manufacturing output and Chinese scrap import demand from the United States. According to trade data from the Census Bureau, the value of total U.S. scrap exports to mainland China plunged to $173 million in January 2019. For comparison’s sake, the U.S. exported nearly $1.16 billion of scrap to China in the month of August 2011:

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To reiterate, the monthly data for January 2019 show that U.S. scrap exports to China were down nearly a billion dollars from their monthly peak in 2011. That’s the bad news. The good news is that a number of other export markets have helped to take in the slack. According to the Census Bureau trade data, the fastest year-on-year export growth markets for U.S. scrap in January (in dollar terms) were Canada, Malaysia, South Korea, Indonesia, Italy, Japan, Hong Kong, and Taiwan:

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