FX.co ★ Steel Holds November Pullback

Steel rebar futures in China have declined to CNY 3,040 per tonne, down from the two-month peak of CNY 3,120 on October 28th. This drop can be attributed to weakened demand and the escalation of trade protectionism by key trading partners of China. In October, China's steel exports decreased by 12.5% compared to the previous year, totaling 978.2 million tonnes, marking the first decline of the year. This underscores the impact of protectionist measures from consumers in Southeast Asia and Latin America, prompting domestic mills to reduce reliance on foreign clients. Consequently, intra-Asian price spreads have tightened, with manufacturers increasingly turning to Indian and Russian steel. Simultaneously, China's official construction Purchasing Managers' Index (PMI) has fallen to 49.1, matching a record low and indicating a third consecutive contraction in the sector. This is largely due to households' diminished purchasing power and government restrictions aimed at curbing housing oversupply, which have negatively affected the outlook for rebar and construction materials.