FX.co ★ Steel Rises Toward 5-Month High

Steel rebar futures in China have increased to CNY 3,150 per tonne, marking the highest level since reaching nearly CNY 3,160 on January 7. This rise is attributed to measures aimed at enhancing the financial stability of Chinese property developers, which subsequently fuels optimism for ferrous metal demand. Chinese state media have reported that several leading property developers are now exempt from complying with the "three red lines" policy, which was originally designed to restrict their financial leverage. This exemption is expected to improve access to loans and mitigate short-term liquidity risks for financially strained developers, thereby boosting the prospects for projects that heavily rely on rebar. Furthermore, the latest official figures reveal a resurgence in Chinese construction activity in December after experiencing four consecutive periods of decline. Additionally, the World Steel Organization has provided evidence indicating a projected decrease in global steel supply by 2025, primarily driven by production cuts in China as part of their anti-involution efforts.