FX.co ★ Steel Gains on China Stimulus Hopes

Steel rebar futures have surged above CNY 3,140 per ton, approaching five-month highs, fueled by optimism surrounding potential new stimulus measures in China, the world's largest consumer. Recently, senior government officials convened to deliberate on a set of fiscal and financial initiatives designed to invigorate domestic demand, including strategies to enhance household consumption. Furthermore, China’s central bank announced intentions to reduce the reserve requirement ratio and decrease key policy rates within this year to ensure sufficient liquidity and maintain a supportive monetary policy stance. Globally, expectations of two interest rate reductions by the US Federal Reserve this year are also bolstering the demand outlook. Concurrently, Chinese steel manufacturers are capitalizing on favorable profit margins, with the increase in hot metal production indicating robust production levels.