- Steel prices drop for the second
consecutive day, remains pressured around monthly low.
- Fears that China’s heatwave and covid
conditions will weigh on profits from steel manufacturing challenge the
buyers.
- Recession woes, higher prices of
ingredients also test the metal buyers.
Steel price extends the
previous day’s pullback from the weekly top, as bears attack the monthly low,
amid a cluster of catalysts weighing on the quote during Friday’s Asian
session. With this, the industrial metal is up for the first weekly loss in
five.
Steel rebar futures on the
Shanghai Futures Exchange (SFE) slipped 0.3% while hot-rolled steel coil shed
0.6% by the press time. Further, Stainless steel dropped the most with 1.2%
daily loss at the latest.
China’s electricity rationing, due to a heatwave in the top steel-producing
region, has forced some mills to halt operations. The same joins the recent
increase in the dragon nation’s coronavirus count to add to hardships for the
metal traders. Also, the US dollar strength and fears of global
recession, not to forget the Sino-American tension over Taiwan, are extra catalysts
that exert downside pressure on the steel price.
That said, Bloomberg came out
with the news that Chinese President Xi Jinping and Russian President Vladimir
Putin plan to attend a Group of 20 Summit to be held in Bali later this year,
Indonesian President Joko Widodo said in an interview. The news also mentioned
that it was the first time the leader of the world’s fourth-most populous
nation confirmed both of them were planning to show up at the November summit.
The news adds to the market’s anxiety and fears of more drama, which in turn
contributed to the flight to safety and helped the US dollar to refresh the
monthly high after the release.