FX.co ★ Steel Falls on Demand Concerns

Steel rebar futures slipped toward CNY 3,010 per ton, pulling back from three-week highs as evidence of persistently weak demand in top consumer China pressured the market. Chinese steelmakers continued to face shrinking margins and the drag of a prolonged downturn in the property sector, curbing demand for steel products. Industry data showed that China’s daily crude steel output fell 11% in July from the previous month to 2.48 million tons, while daily hot metal production edged down 2.2% to 2.2 million tons. China’s property market has been mired in a five-year slump, with real estate values still falling, financially strained households being forced to sell homes, and heavily indebted developers under intensifying pressure after amassing large debts on speculative projects. At the same time, export prospects for Chinese steel mills have been limited by rising protectionist measures from foreign governments.