Supply and Demand Assignment


Market: Aluminum and Steel

China’s aluminum exports have risen more than 25%, and steel exports have fallen by 30% since the start of 2018. At first glance, the change in steel exports may have developed from US President Donald Trump’s decision to implement high tariffs on the two metals. This is the demand determinant: buyer’s preferences and consumer taste. In addition, Beijing has reduced the production of aluminum to combat the air pollution it causes, but the number of exports have not slowed down. This is the supply determinant of factors of production. Steel exports have fallen in the past couple of years as the demand within China for steel has increased, so the decreasing exports are simply a continuation. The graph below demonstrates the aluminum industry in China. The demand curve has moved to the right, while the supply curve has moved to the left. This leads to both the equilibrium price, and equilibrium quantity decreasing.  

Supply and Demand Article


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