FX.co ★ Steel Firms Up on Improving Margins

Steel rebar futures hovered near CNY 3,100 per ton, supported by a decline in spot coke prices that helped narrow steelmakers’ losses, improved the sector’s outlook, and may ease pressure for production cuts. At the same time, China stepped up efforts to bolster its economy amid weak consumption and investment, reallocating CNY 550 billion ($82 billion) in unused government bond quotas to shore up local government finances and boost infrastructure spending. Even so, the steel industry continued to face muted demand, dragged down by a prolonged property market slump and sluggish construction activity. Recent data showed that only 6.9% of Chinese steel producers were profitable at the end of September, underscoring the sector’s persistent difficulties. Steelmakers remain under pressure to curb output as shrinking margins and uncertain demand continue to weigh on prices.