FX.co ★ Steel Pressured by Demand Concerns

Steel rebar futures were trading around CNY 3,160 per ton, hovering near five-week lows, as China’s steel market entered its seasonally weak demand period earlier than usual this year. The combination of persistent rainfall and an early onset of summer heat has curtailed construction activity, which typically slows during periods of heavy rain and high temperatures, thereby dampening demand for steel products. At the same time, Chinese steelmakers are facing pressure from tighter profit margins, curbing their appetite for building up raw material inventories or increasing production. These margins have been further squeezed by rising coal prices following a recent mine accident in Shanxi Province. In parallel, the latest industry data showed that domestic crude steel output fell 2.8% year-on-year to 83.6 million tons in April, the lowest April production level since 2018.