Steel yesterday
settled flat at 45660 despite renewed bets that economic support from Beijing
will spur demand for construction inputs. Market players noted that the
implementation of macro and micro-targeted easing policy measures returned on
the municipal scale, while another report stated that Beijing permitted 12
provinces to issue CNY 1.5 trillion of special financing bonds. The measures
respond to a series of data underscoring the slowdown in the Chinese economy
and recent concerns that deflationary pressure for housing could trigger a
crisis in the Chinese financial system. Besides efforts to stimulate
consumption, the outlook of lower construction demand drove the Chinese
government to significantly lower the production outlook for 2023, resulting in
activity halts for key mill hubs.
China produced 90.8 million metric tons of crude steel in July,
up 11.5% from the same period a year earlier, the statistics bureau said. The
July volume was slightly lower than 91.11 million metric tons in June, data
from the National Bureau of Statistics showed. The world's largest steel
producer manufactured 626.51 million tons of the ferrous metal in the first
seven months of the year, up 2.5% from the same period a year before, NBS data
showed. The People’s Bank of China (PBoC) unexpectedly slashed the one-year
medium-term lending facility (MLF) rates by 15 bps to 2.50% on August 15th as
it seeks to help an economy that faces risks from a deepening property crisis
and weak consumer spending. China's new home prices fell for the first time
this year in July, official data showed, as piecemeal policy support failed to
shore up the embattled property sector, heaping pressure on authorities to
introduce bolder stimulus.
Technically market is under fresh selling as the market has
witnessed a gain in open interest by 15.93% to settle at 2110 while prices are
down -40 rupees, now Steel is getting support at 45420 and below same could see
a test of 45190 levels, and resistance is now likely to be seen at 46040, a
move above could see prices testing 46430.