CANBERRA: The recent events surrounding President Trump’s decision to levy tariffs on steel and aluminum imports, seen by many as a first step towards triggering a global trade war, has, alongside others around the world, troubled Australian ultra-high-net-worth investors, who have everything to lose and nowhere to hide.
Net exports appear to remain depressed for another few months, thanks to explicit local Chinese government air quality targets, potentially leading to production cuts being maintained in key production regions across China.
For instance, for BlueScope, the temporary lack of Chinese export product is creating a tighter seaborne market and delivering improved pricing power and spreads for all mills in the region.
For Australia’s Sims Metal Management, the sustained contraction in Chinese finished steel exports have seen stronger demand for domestic Australian EAF (electric arc furnace) produced industrial steel, resulting in an increased demand for ferrous scrap here in Australia.
But Australian ultra high net worth investors know all too well that in one moment these currently favourable macro tailwinds could switch to become not only troublesome headwinds but darker rain clouds that could affect all corners of global investing.
