Steel prices showed a 0.62%
increase, settling at 46830, driven by optimism regarding China's support for
its struggling property sector. China's efforts to relax home-purchase
restrictions and extend preferential loans for first-time buyers boosted
confidence. Additionally, Chinese developer Country Garden received approval to
extend bond payments, further enhancing market sentiment. Chinese steelmakers
increased production since mid-August to evade potential output cuts, depleting
inventories and raising expectations for iron ore demand.
Global crude steel production also saw a 6.6% rise in
July, with China, the top producer, contributing significantly. However, the
year-to-date production in major steel-producing nations remained relatively
stable, down only 0.1%. On the flip side, India's imports of finished steel
from China reached a five-year high in the first four months of the fiscal
year, signaling China's increased presence in the Indian steel market. India's
domestic steel production and consumption also saw robust growth during this
period.
From a technical perspective, the market experienced
short covering, with a 7.07% drop in open interest, settling at 1710. Prices
surged by 290 rupees. Steel's support level is at 46520, with a potential test
of 46210 if it drops below. Resistance is expected around 47030, and a
breakthrough could lead to a test of 47230.