FX.co ★ Steel Drops on Weak Demand

Steel rebar futures in China have declined to approximately CNY 3,070 per ton, reaching a two-week low amid faltering demand, which has compelled mills to curtail production. Recent industry data highlights that just 35% of Chinese steel mills were profitable at November’s end, a decrease from 45% in late October. Many mills undertook furnace maintenance last month due to high raw material costs and muted demand. Concurrently, China's steel exports increased by 2% month-on-month, reaching 9.98 million tons in November, marking a 7.5% rise from the previous year. Year-to-date exports have hit 107.72 million tons, setting a record for the period with an annual growth of 6.7%. Meanwhile, Beijing is contemplating new strategies to mitigate the ongoing downturn in its property market, the primary global rebar demand driver, encompassing initiatives like reduced taxes on home purchases and new mortgage subsidies.