Canada

In the previous Mirror report, we highlighted how Purchasing Managers’ Index figures underlined Canada’s slowing manufacturing sector. And as since reported by S&P Global Canada, the PMI is now in its eighth consecutive month of decline - a downtrend largely viewed as a direct impact of the tariffs imposed by the USA.

The unemployment rate provides further evidence of Canada’s economic struggles: this stood at 7.1% as of September, with forecasts of ending the year at 7.3%. Excluding the COVID period, Canada’s unemployment rate has not been this high since May 2016. With a concerning economic trend now forming, The Bank of Canada has responded with the September 17 announcement of another benchmark rate cut of 0.25 percentage points to 2.5%.

Canada is the world's fourth-largest producer of primary aluminium behind China, India and Russia. Unusual dynamics have unfolded owing to tariffs imposed by the USA whereby sellers of high-grade recycled materials are fetching a premium to primary metal. The dynamic is driven by recycled materials crossing the southern border to the USA tariff-free into a seemingly distorted market from the Midwest Transaction Premium’s arbitrage over the LME benchmark.