Steel experienced a
marginal decline of -0.17%, settling at 46540, as worrisome data from China
sparked renewed expectations of stimulus measures from Beijing. Chinese
construction companies reported substantial losses in their latest quarterly
earnings, largely attributed to plummeting demand and concerns of oversupply in
the housing market. Furthermore, policymakers extended both macro and
micro-targeted support measures at the municipal level. Additionally, they
allowed 12 provinces to issue special financing bonds totaling CNY 1.5
trillion.
Meanwhile, Chinese steel producers increased production
since mid-August in anticipation of potential output cuts mandated by
policymakers in the coming weeks. Global crude steel production saw a notable
6.6% increase in July, reaching 158.5 million tonnes, up from 148.9 million
tonnes in the same period last year. Notably, China, the top producer, produced
90.8 million tonnes in July, marking an 11.5% increase compared to the previous
year. India's imports of finished steel from China reached a five-year high in
the first four months of the fiscal year, starting in April. During April-July,
China became India's second-largest steel exporter, with sales of 0.6 million
metric tons, reflecting a 62% increase compared to the same period a year
earlier.
From a technical perspective, the steel market is
currently undergoing long liquidation, with open interest falling by -6.12% to
settle at 1840, accompanied by a price decrease of -80 rupees. Steel is finding
support at 46440, and a breach below this level could lead to a test of 46330.
On the upside, resistance is expected at 46660, with potential for prices to
test 46770 if this level is surpassed.