FX.co ★ Steel Hits 2-Month Low

In mid-September, steel rebar futures declined to approximately CNY 3,020 per tonne, marking a two-month low, largely due to weakening demand from China, the lead consumer. The nation's property sector is still facing challenges, with steel manufacturers experiencing a squeeze as the construction season remains sluggish. Additionally, rising iron ore costs, influenced by potential supply disruptions at Guinea's Simandou mine and the seasonal restocking demands in China, have further compressed steel margins.

On the international trade side, China's steel product imports increased by 11.1%, reaching 0.50 million tonnes, while exports decreased by 3.4% to 9.51 million tonnes. Meanwhile, since mid-August, there has been a rise in inventories of key steel products, reflecting diminished consumption due to the ongoing property market slump. This persistent excess inventory continues to exert downward pressure on prices and could deter mills from ramping up production.