Steel yesterday
settled down by -0.7% at 43860 as hopes for demand growth from top consumer
China dimmed after Beijing's promise to support economic recovery did not roll
out any specific measures. The Politburo said it will pass measures to combat
cyclical slowdowns and boost real-estate consumption to support debt-ridden
property developers that are critical to the Chinese economy, but fell short of
announcing large-scale stimulus as the country’s recovery continuously fails to
gain traction. In the meantime, dryness in the steel-production hub of Sichuan
hampered the region’s critical hydropower levels and drove authorities to
reduce and shut down mills until at least August. People's Bank of China Deputy
Governor Li Guoqiang's comments that monetary policy in the second half of the
year would be "targeted and forceful". Any stimulus may see
additional demand from restocking, with steel inventories down 12% year-on-year
in early July.
China's June crude steel output rose 1.1% from May and 0.4% from
a year earlier, the statistics bureau said, as mills were encouraged to ramp up
production after steel prices rose. The world's largest steel producer
manufactured 91.11 million metric tons of the ferrous metal last month, data
from the National Bureau of Statistics (NBS) showed, higher than 90.12 million
metric tons manufactured in May and 90.73 million metric tons in the same month
in 2022. India's finished steel purchases from China touched a six-year high in
the first two months of the fiscal year beginning in April, according to
provisional government data, while its overall imports reached a three-year
high.
Technically market is under fresh selling as the market has
witnessed a gain in open interest by 9.77% to settle at 2810 while prices are
down -310 rupees, now Steel is getting support at 43550 and below same could
see a test of 43240 levels, and resistance is now likely to be seen at 44460, a
move above could see prices testing 45060.