- Steel price fades
the previous day’s rebound from monthly low.
- Risk-off mood,
hawkish Fed bets propel US dollar, weighing on steel price.
- Covid woes,
emission-lined production jitters add to the negative catalysts.
Steel
price holds lower ground near the monthly low, reversing the previous day’s
bounce, as risk-aversion joins hawkish bias on the Fed’s next moves and
pessimism surrounding China to weigh on the metal prices. That said, the mixed
clues and anxiety ahead of the top-tier data/events seem to restrict the
quote’s latest moves during Wednesday’s Asian session.
That
said, the most active contract of steel rebar on the Shanghai Futures Exchange
(SFE) drops to 3,658 yuan per tonne at the latest.
“Most
base metals in Shanghai slid on Wednesday, dragged by a stronger dollar and a
bearish demand outlook amid worries about a recession in major economies,” per
Reuters.
Alternatively, growing fears of economic slowdown, amid the
energy crisis and China’s covid woes, join the firmer US data and hawkish Fed
bets to weigh on the metal prices. That said, US ISM Services PMI rose to 56.9
versus 55.1 market forecast and 56.7 prior. However, the S&P Global
Composite PMI and Services PMI eased to 44.6 and 43.7 respectively versus 45.0
and 44.1 initial forecasts in that order. Even so, the US Dollar Index (DXY) rose after the release
and refreshed a 20-year high.