Steel prices
experienced a slight decline of -0.11%, settling at 46,810. Concerns emerged
over financial contagion in China's key property sector, as missed payments by
Country Garden renewed worries about major property developers' financial
health. However, robust demand for infrastructure projects and reduced supply
continued to support the outlook for steel demand. Beijing's economic support
measures aimed at stabilizing the housing market and boosting infrastructure
projects have contributed to steady resource demand. JPMorgan (NYSE:JPM)
noted that despite financial concerns in the property sector, strong
infrastructure building in China keeps steel usage high, offsetting weaker
residential sales confidence.
In addition, China's crude steel output fell by a
sharper-than-expected 4.8% month-on-month in August, reflecting some steel
mills scaling back production due to shrinking profit margins. Despite this
decline, China's steel output for August was still up by 3.2% compared to the
same month in the previous year. India's finished steel exports in August 2023
decreased by 6.4% month-on-month but increased by 5.7% year-on-year, indicating
a positive trend. However, India's steel imports from China reached a five-year
high in the first four months of the fiscal year.
From a technical standpoint, the steel market witnessed long
liquidation, with a 2.99% drop in open interest to 1,620 contracts, accompanied
by a -50 Rupee decrease in prices. Steel is currently supported at 46,620, with
potential further testing at 46,420. Resistance is likely at 47,070, with a
potential breakout leading to prices testing 47,320