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While higher exports from the US to China under the Phase One Agreement have added volumes for tanker and dry bulk shipping, containerised imports to the US have shifted from China to other countries in the region. Despite an increase in exports, the commitments made in the Phase One Agreement are a long way off and unlikely to be met, the consequences of which have not clearly been laid out. In the first seven months of 2021, the US trade balance with China has worsened compared with the same period in 2020, from a deficit of USD 162.8 billion to a deficit of USD 187.2 billion. However, the first seven months of 2020 were severely impacted by the pandemic, creating an artificially low deficit. Compared with 2019, the trade balance has in fact improved in the first seven months of this year, aided by higher valued exports. US exports in value to China have risen 34.7% in the first seven months of 2021 compared to 2019, and at USD 72.4 billion, exports this year are 14.1% higher than in the same period of 2017, before trade war tariffs were implemented. While total imports measured in value from China are also up from 2019 (+4.0%), the total value of imports is down 1.2% in the first seven months of this year compared to the same period in 2017 (2017 being the final pre-trade war year). Out of total US trade, imports from China have in the first seven months of 2021 accounted for 17.2% of total US imports, down from 20.6% in the first seven months of 2017. Exports to China have made up 8.7% of total exports so far this year. Exports to China rising faster than to the rest of the world Partly attributable to the Phase One Agreement, boosting US exports to China and repairing some of the damage done to trade between the world`s largest economies in the first years of the trade war, US exports to China have risen at a faster pace than those to the rest of the world. In the first seven months of this year, US exports to China are up 40.6%, almost twice the 22.2% export growth rate recorded in the same period to the rest of the world. The strongest growth has come from energy products and agricultural goods, with US containerised goods exports suffering both from the slow recovery in manufacturing as well as problems in getting goods exported. The contrast between the two is even more stark when comparing exports so far this year to those in the first seven months of 2019: exports to China are up 34.7%, while those to the rest of the world are up by just 0.2%. This has led to China talking a larger share of total US exports than it did in 2019, and has in fact recovered to its pre-trade war level. In the first seven months of 2021 the US sent 8.7% of its exports to China, slightly above the 8.5% from the same period in 2017. Growth driven by goods covered in the Phase One Agreement Just under three quarters of total US exports to China are covered in the Phase One Agreement, and these quarters have been the major growth-driver. Compared to the first seven months of 2020, exports of both goods included in the agreement, and those that aren`t, have increased. Compared to 2019, however, exports of goods not covered in the deal have fallen by 6.1%. This compares to 61.1% growth in exports of the goods included in the agreement. For seaborne trade, all three of the major shipping sectors have benefitted from higher exports on this long-haul trade as they are all covered by at least one of the categories of goods covered in the agreement: manufactured, agricultural and energy goods. The biggest winners are tanker and dry bulk shipping. The extra container volumes are being added on the backhaul transpacific trip. The most important commodity in the agreement for tanker shipping is crude oil, with 7.6m tonnes exported so far this year, just under 10% of total US seaborne crude oil exports. Although this, in volume terms, represents an increase from the first seven months of 2017, and shows much improvement from the second half of 2018 and the whole of 2019 in which there were many months with no imports, China has yet to return to the market share it held before the trade war when the country accounted for more than one fifth of US crude oil exports. Overall, exports of the energy goods included in the agreement have risen by 470.5% from the first seven months of 2020. This jump is attributable to a recovery in volumes as well as stronger energy prices. Compared to the first seven months of 2017, the value of exports of these energy goods to China has risen by 64.3%. Corn is the biggest volume driver for dry bulk shipping Dry bulk shipping has also benefitted from an increase in trade between the two hotspots. The strongest growth has come from US exports of corn which have grown from under 1 million tonnes in the first seven months of last year to 15.4m tonnes in 2021. Another large dry bulk good covered in the agreement is coal, of which 6.1 million tonnes have been exported to China. In the first seven months of the past four years US coal exports to China have averaged 1.2m tonnes. Another of the important dry bulk commodities included in the deal is soya beans. As the US export season is ramping up, this provides support to the mid-sized bulkers that cater to this trade. However, BIMCO does not expect soya bean exports this season to match the record high volumes from the 2020/2021 season. Also included in the agreement is a long list of manufactured goods, and exports of these good have increased at the slowest pace of the three groups of goods. This is due to the US manufacturing sector recovering from the pandemic at a slower pace than other sectors. Compared to the first seven months of 2020, value of exports of the manufactured goods included in the agreement are up by 21.3%. [Despite the higher value and volumes, exports this year are still far from the commitments made in the agreement. In fact, it looks increasingly unlikely that the targets will be met by the end of the year. However, even if the agreement`s targets are not met, the higher exports from the US to China have added volumes and important tonne mile demand to a struggling oil tanker shipping industry while also boosting the strong dry bulk market," says Peter Sand, BIMCO`s Chief Shipping Analyst. In the first seven months of this year exports of the goods in the Phase One Agreement have reached 21.3% of the commitments made for the full year. Just as in 2020 the agricultural goods have come the closest to meeting their goal, though at 30.4% they are still far from the target. Tariffs have capped growth in imports from China While exports have benefitted from the Phase One Agreement, US imports from China continue to face higher tariffs with containerised goods affected the most. Comparing the first seven months of 2021 with the first seven months of 2020, the tariffs have left China with a much lower growth rate than other countries in the region. During the first seven months of this year, strong growth has been recorded in containerised imports by the US from the region, as evidenced by the congestion on the Transpacific trade, but the tariffs have left China with a much lower growth rate than its neighbours. Containerised imports by Far East and South East Asian countries have risen by 18.3% between the first seven months of 2017 and the same period this year, reaching 63.3 million tonnes. In contrast, China`s imports stand at only 2.8% growth compared to 2017, rising by just under 1 million tonnes to 36.1m. Volumes from the other countries in the region have grown much faster, up 48.5%, which at 27.3 million tonnes is however still overshadowed by China. Compared to the first seven months of last year, growth is much more evenly distributed between China and the other countries in the region, with total containerised volumes up 26.7%, following the large drop in imports at the start of last year. In this period, China has recorded growth of 29.6% compared to growth of 23.1% from the other countries in the region. The strongest growth comes from Cambodia, Burma and Vietnam, with the latter solidifying its second spot behind China. The US has imported 7.3m tonnes of containerised goods from Vietnam so far this year. [Even before the pandemic induced talk of supply chain resiliency, US importers had been adapting to the changing geopolitical situation, with China`s neighbours, rather than US manufacturers, emerging as the biggest winners. There are however still huge volumes of goods being imported from China despite the higher tariffs being applied, paid for by US consumers. While originally these may have avoided being passed on to consumers, this may now be inevitable as higher supply chain costs squeeze margins even further," says Sand.

The European Union imposed tariffs of as much as 44% on optical-fiber cables from China, affecting the supply of next-generation telecommunications equipment used by Deutsche Telekom AG and others. Chinese exporters of core broadband gear for future 5G networks will face EU tariffs to counter unfair price undercutting known as dumping, according an EU legal document published on the authority`s website on Wednesday. Regulators said below-cost pricing risked driving EU producers out of the European market and there were plenty of alternative suppliers in Europe and elsewhere to replace the Chinese goods. The tariffs will enter into force the day after the document is published in the EU`s Official Journal. They include a 44% duty on EU imports from companies the EU says are controlled by the Chinese state: FiberHome Telecommunication Technologies Co. Ltd. and Nanjing Wasin Fujikura Optical Communication Ltd. The EU probe of optical-fiber cables imported from China stems from the first-ever dumping complaint by Europacable, an association that represents European producers including Prysmian SpA, Nexans SA and Leoni AG. The industry previously sounded an alarm that Chinese imports jumped 150% between 2016 and 2019, taking some 15% of the EU market, which is worth about 1 billion euros ($1.1 billion) a year. The European Commission said [it was inevitable that anti-dumping duties would have cost implications" for companies that bought cables from China, bit added that [this was due to the unfair export behavior" of suppliers and that cables accounted for only a minor share of the total roll-out cost of digital networks, less than 5% for 5G networks. Deutsche Telekom and Spanish distributor Comercial Electro Industrial SA opposed the tariffs, the EU said.

HANOI, April 14 (Reuters) - Aluminium prices rose on Wednesday, with the Shanghai contract hitting a near 10-year high on fears that top producer China will limit output to meet its environmental targets. The most-traded May aluminium contract on the Shanghai Futures Exchange rose as much as 2.7% to 18,045 yuan ($2,760.57) a tonne, its highest since August 2011, before retreating to trade up 1% at 17,745 yuan a tonne at 0218 GMT. Three-month aluminium on the London Metal Exchange rose 0.3% to $2,300 a tonne, having hit its highest since June 2018 earlier in the session of $2,313.50 a tonne. Traders said there were market talks that China`s Xinjiang region will limit output of aluminium, an energy intensive industry, as the country strived to curb pollution, but there has been no confirmation of such event. Combined aluminium inventories in LME and ShFE warehouses have fallen 4.5% since a near-three-year high level hit on March 19, but current stockpiles of 2.23 million tonnes were still 43% higher than the beginning of the year. MALSTX-TOTALAL-STX-SGH FUNDAMENTALS * Russian metals producer Nornickel will boost output of nickel products at its Harjavalta plant in Finland, betting on an expanding market for electric vehicle battery materials. * LME copper rose 0.2% to $8,912.50 a tonne, nickel fell 0.4% to $16,095 a tonne while lead fell 0.3% to $1,980.50 a tonne. * ShFE copper advanced 0.4% to 66,160 yuan a tonne, nickel was down 0.6% to 121,210 yuan a tonne while lead rose 0.7% to 14,805 yuan a tonne. * For the top stories in metals and other news, click or MARKETS NEWS * A gauge of global equity markets extended their record high as bond yields eased after data showed U.S. inflation was not rising wildly. DATA/EVENTS (GMT) 0630 India WPI Inflation YY March 1800 US Federal Reserve issues the Beige Book of economic condition $1 = 6.5367 yuan Reporting by Mai Nguyen; Editing by Rashmi Aich Our Standards: The Thomson Reuters Trust Principles.

Annotations: 1. Explanatory Notes Producer Price Index for manufactured goods consists of producer price index and purchaser price index. The industrial producer price index reflects the trend and level of prices change when the products are sold for the first time. The industrial purchaser price index reflects the trend and level of prices change for the products purchased by the industrial enterprises as intermediate inputs. 2. Statistical Coverage The factory price survey of industrial producers covers the prices of industrial products in 40 major industrial categories and more than 1300 basic categories; the purchase price survey of industrial producers covers the prices of industrial products in 9 major categories and more than 800 basic categories. 3. Survey Methods The industrial producer price survey adopts the method of combining key survey with typical survey, involving more than 40000 industrial enterprises in China. 4. Statistical Standard Industrial Classification is based on the [Industrial Classification for National Economic Activities" (GB/T4754-2017). 5. Data Description Due to "rounding-off", sometimes the aggregate data is the same as the high or low value of the classified data. 6. Base Period Rotation According to the provisions of the statistical system, China's industrial producer price statistical survey has a base period rotation every five years, and the price index with 2020 as the base period will be compiled and released from January 2021. Compared with the previous round of base period, the survey classification catalogue, representative specifications and survey enterprises in the new base period have been adjusted, and the classification weight has also changed to reflect the latest changes in the industrial production structure. It is estimated that the average impact of base period rotation on the year-on-year index of each month is about 0.05 percentage point, which is within the statistical acceptable range.

Price Indexes for the Industrial Sector in March M/M(%) Y/Y(%) Jan-Mar Y/Y(%) I. Producer Price Indices 1.6 4.4 2.1 Means of production 2.0 5.8 2.8 Mining and quarrying 1.0 12.3 6.6 Raw materials 3.9 10.1 4.0 Processing 1.3 3.4 2.0 Means of subsistence 0.2 0.1 -0.1 Food 0.2 2.0 1.7 Clothing 0.3 -0.8 -1.1 Articles for daily use 0.0 0.0 0.0 Durable consumer goods 0.3 -1.4 -1.7 II. Purchaser Price Indices 1.8 5.2 2.8 Fuel and Power 1.4 2.7 -1.1 Ferrous Metals 3.0 15.6 12.0 Non-ferrous Metal Materials and Wires 3.8 17.3 11.9 Chemical Raw Materials 4.8 7.1 2.0 Wood and Pulp 2.1 2.5 1.1 Building Materials and Non-metallic -0.4 -1.4 -1.9 Other Industrial Raw Materials and Semi-products 0.5 1.0 0.6 Agricultural and Sideline Products 0.5 6.2 5.5 Textile Raw Materials 1.3 1.4 0.1 III. Producer Price Indices of Major Industries Mining and Washing of Coal -3.1 6.9 8.9 Extraction of Petroleum and Natural Gas 9.8 23.7 -3.8 Mining of Ferrous Metal Ores 4.4 34.7 28.8 Mining of Non-Ferrous Metal Ores 1.1 13.3 10.9 Mining and Processing of Nonmetal Ores 0.0 0.8 0.9 Processing of Food from Agricultural Products 0.2 5.6 5.0 Manufacture of Foods 0.4 0.8 0.6 Manufacture of Wines, Beverage and Refined Tea 0.3 2.0 1.8 Manufacture of Cigarettes and Tobacco 0.1 0.4 0.5 Manufacture of Textile 1.9 0.1 -1.4 Manufacture of Textile Wearing Apparel and Ornament 0.3 -0.5 -1.0 Processing of Timbers, Manufacture of Wood, Bamboo, Rattan, Palm, and Straw Products 0.0 0.1 0.0 Manufacture of Paper and Paper Products 2.3 2.3 1.0 Printing, Reproduction of Recording Media 0.5 -0.6 -0.9 Processing of Petroleum, Coking, Processing of Nucleus Fuel 5.7 13.9 1.0 Manufacture of Chemical Raw Material and Chemical Products 5.3 11.4 5.5 Manufacture of Medicines -0.1 -0.3 0.0 Manufacture of Chemical Fibers 8.7 10.5 2.1 Manufacture of Rubber and Plastics Products 1.1 1.2 -0.1 Manufacture of Non-metallic Mineral Products -0.1 -1.7 -2.2 Manufacture and Processing of Ferrous Metals 4.7 21.5 15.1 Manufacture and Processing of Non-Ferrous Metals 4.5 21.3 14.0 Manufacture of Fabricated Metal Products 1.2 3.5 2.2 Manufacture of General- Purpose Machinery 0.4 0.2 0.0 Manufacture of Motor Vehicles 0.0 -0.8 -0.8 Manufacture of Railway Locomotives, Building of Ships and Boats, Manufacture of Air and Spacecrafts and Other Transportation Equipments 0.1 0.0 0.1 Manufacture of Computer, Communication Equipment and Other Electronic Equipment 0.4 -1.8 -1.9 Production and Supply of Electric Power and Heat Power 0.2 -0.8 -1.3 Production and Distribution of Gas -1.6 1.8 0.9 Production and Distribution of Water 0.0 0.9 0.5

In March 2021, Producer Price Index (PPI) for manufactured goods rose by 4.4 percent year-on-year and 1.6 percent month-on-month. The purchasing price index for manufactured goods increased by 5.2 percent year-on-year and 1.8 percent month-on-month. From January to March, on average, the producer price of industrial products increased by 2.1 percent over the same period last year, and the purchasing price of industrial products increased by 2.8 percent.

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China is now the EU's biggest trading partner, overtaking the US in 2020. China bucked a wider trend, as trade with most of Europe's major partners dipped due to the Covid-19 pandemic. Trade between China and the EU was worth $709bn (€586bn, £511bn) last year, compared with $671bn worth of imports and exports from the US. Although China's economy cratered in the first quarter due to the pandemic, its economic recovery later in the year fuelled demand for EU goods. New WTO boss warns against vaccine nationalism China takes new foreign investment top spot from US Cognac targeted with tariffs in US-EU trade row China was the only major global economy to see growth in 2020, stoking demand for European cars and luxury goods. Meanwhile, China's exports to Europe benefited from strong demand for medical equipment and electronics. "In the year 2020, China was the main partner for the EU. This result was due to an increase of imports (+5.6%) and exports (+2.2%)," according to Eurostat, the EU's statistical office. The figures were similar to China's official data published in January, which showed trade with the EU grew by 5.3% to $696.4bn in 2020. The EU's trade deficit with China also grew from $199bn to $219bn according to Eurostat figures, which were released on Monday. Trade with US and UK slumps Although the US and the UK remain the EU's largest export markets, trade with both countries dropped significantly, the statistics showed. "Trade with the United States recorded a significant drop in both imports (-13.2%) and exports (-8.2%)," the data agency said. Transatlantic trade has been hit by a series of tit-for-tat disputes that have resulted in tariffs on steel and products such as French Cognac or American Harley-Davidson motorcycles. In 2020, the US had a trade volume of $671bn with the EU, down from $746bn the previous year. Media caption, WTO head warns against vaccine nationalism It's not year clear if new US President Joe Biden will re-evaluate the US approach to trade with Europe. The EU and China, however, are trying to deepen their economic ties, with both sides seeking to ratify an investment deal that would give European companies better access to the Chinese market. Analysts are tipping global trade to turn around in 2021 after a lacklustre 2020. The real value of global trade is set to rise by 7.6% after an an estimated contraction of 13.5% in 2020 to $16.4tn, according to research firm IHS Markit.

Aluminum prices jumped to their highest in nearly three years. The price for aluminum for three-month delivery on the London Metal Exchange has risen to its highest since June 2018, reaching $2,350 per ton. The most-traded May aluminum contract on the Shanghai Futures Exchange rose as much as 2.7% to 18,045 yuan ($2,760.53) a tonne, its highest since August 2011.