FX.co ★ Steel Pulls Back from 5-Month High

Steel rebar futures in China have decreased to CNY 3,100 per tonne, following a peak of CNY 3,160 on January 29th. This decline was influenced by a recent drop in industrial metals as investors reevaluated speculative trades. However, signs that demand may have reached its lowest point, along with Beijing's efforts to control overcapacity, have kept prices stable this year. In a strategic move, China has reportedly exempted major developers from providing data that previously restricted their access to leverage, facilitating easier access to loans and reducing short-term liquidity risks for financially distressed builders. This change is expected to enhance the prospects for projects that heavily utilize rebar. Furthermore, the most recent official data shows a resurgence in Chinese construction activities in December, after four consecutive declines. Additionally, the World Steel Organization has noted a projected decrease in global supply by 2025, largely due to production cuts in China as part of their anti-involution campaign.