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

Steel rebar futures in China have risen to above CNY 3,080 per tonne, recovering from the seven-month low of CNY 3,017 recorded on April 22nd. This increase comes after the Chinese government announced plans to support key export-oriented industries impacted by escalating trade protectionism. While specific details were not disclosed, the government hinted at initiatives like easier access to loans for sectors facing difficulties and broader economic stimulus to enhance domestic consumption. Prior to this, ferrous metals in China experienced a sell-off due to declining consumer demand, heightening concerns that property prices might continue to drop. This posed a threat to the financial stability of heavily indebted developers, potentially leading to their liquidation and resulting in a significant decrease in global rebar demand. The combination of reduced demand and rising trade protectionism had previously led Beijing to propose capacity cuts in the steel sector. However, recent data show that steel production remains robust, with China's crude steel output increasing by 3.6% year-on-year to 93 million tons in March.