FX.co ★ Steel Inches Higher from 7-Month Low

Steel rebar futures in China have climbed to above CNY 3,060 per tonne, marking a slight recovery after reaching a seven-month low of CNY 3,017 on April 22nd. This rebound came as US officials adopted a more conciliatory approach on tariffs, temporarily mitigating fears of decreased growth in China. The ongoing trade dispute between China and the United States, however, continues to heighten anxiety regarding the potential exacerbation of China's property crisis. Concerns persist that property prices may decline further due to subdued consumer demand, exerting additional pressure on the financial standings of heavily indebted developers and possibly leading to their liquidation. This scenario could significantly reduce the demand for global rebar. Despite earlier signals from Beijing about reducing capacity in the steel sector, driven by dwindling demand and increasing trade protectionism, recent data indicates that steel production remains robust. In March, China’s crude steel output increased by 3.6% year-on-year to reach 93 million tons.