FX.co ★ Steel Edges Lower Toward 7-Month Low

Steel rebar futures in China eased to CNY 3,040 per tonne, maintaining a narrow trading range after reaching a seven-month low of CNY 3,017 on April 22nd, due to abundant supply and unpredictable demand. The U.S. Presidential administration indicated a departure from the stringent tariffs previously enforced on China; however, both Beijing and Washington have clarified that discussions toward de-escalating these measures have yet to commence, thereby dampening hopes for a swift reduction of trade levies. As a result, these tariffs continue to exert pressure on China's already fragile consumer demand, heightening the risk of persistent declines in property prices. This situation threatens the financial health of indebted developers, posing a risk of liquidation and diminishing a significant source of global rebar demand. Previously, declining demand coupled with rising trade protectionism prompted Beijing to hint at steel sector capacity reductions, yet recent data reveals that mills have actually increased production. In March, China's crude steel output rose by 3.6% year-on-year, reaching 93 million tons.