The Effect of Brexit on the Metals Industry
Editor’s Note: Every week, Diamond Brite Metals, the country’s most comprehensive architectural and commercial polisher, will be publishing an article analyzing market conditions in every step of the metals market.
In 2015, the first fissures in the global economy surfaced with Great Britain’s decision to leave the European Union in what has become known as “Brexit.” Brexit not only foreshadowed the election of Donald Trump to the United States’ Presidency but also it planted the seeds for the complete reorientation of the global economy. The emergence of economic protectionism and the disintegration of multilateral, cooperative trade deals has complicated a multitude of industries including the metals sector.
Over the past two years, the talk in boardrooms throughout mills, service centers, and fabricators has been focused on Section 232, known as the steel tariffs, which the Trump Administration issued to protect the domestic steel industry. While protecting domestic mills and service centers on the supply of raw material, Section 232 passed the cost along to Original Equipment Manufacturers (OEM(s)) thereby forcing them to raise prices or risk shrinking margins. While Section 232 has had a direct effect on the metals industry due to its domestic nature, metals executives across the United States should also be aware of the impact of Brexit. For those organizations that are not involved on international fronts, they see Brexit as an insignificant European event that has no direct effect on the metal sector. They do not believe that their distribution channels or supply chains will be subject matters reserved for the European Union.
However, there are ancillary consequences of Brexit that will involve the metals sector. The most significant consequence is that Brexit will mark the continued proliferation of protectionist measures to increase the profitability of domestic industries. As governments square off in geopolitical squabbles, OEMs will suffer the most as raw material, projects, and services, such as architectural and commercial polishing, become more expensive. Countries will continue to enact countervailing measures to eliminate steel dumping thereby diluting the supply of raw material. Additionally, Brexit will chill market conditions. Undoubtedly, the stock market will react negatively to the news that Great Britain has officially left the European Union. Foreign investment will stagnate and end-use industries that rely heavily on the metals sector may be reluctant to spend money on capital projects. In other words, Brexit may have a trickle down effect that will ultimately effect the metals sector. Regarding architectural and commercial metals polishing, Brexit will most likely have the same effect on demand and price.
Diamond Brite Metals is the country’s most comprehensive architectural and commercial polishing facility. Our management team pays meticulous attention to the ever-changing landscape of the metals sector. We are always one step ahead in analyzing market trends not only in architectural and commercial polishing but also in the macro metals sector.
Our architectural and commercial polishing capabilities cover all product lines in any size. We welcome and all inquiries for architectural and commercial polishing. For an inquiry or an RFQ, please contact Sales@diamondbritemetals.com or our new business development associate firstname.lastname@example.org.