FX.co ★ Steel Falls to 7-Month Low

In April, steel rebar futures in China decreased to CNY 3,030 per tonne, marking their lowest point in seven months. This decline is attributed to an abundant supply coupled with a bleak demand outlook from the world's largest consumer. The ongoing trade war between China and the United States has notably dampened expectations for manufacturing demand in China. This has hurt growth prospects and heightened concerns that the country's property crisis may not have reached its nadir. The potential for continued declines in property prices, driven by weak consumer demand, has placed additional strain on the balance sheets of heavily indebted developers. This situation raises the risk of their liquidation and the subsequent loss of a major demand source for global rebar. Previously, Beijing had signaled potential capacity reductions in the steel sector as a response to diminishing demand and rising trade protectionism. However, the most recent figures reveal that steel mills have continued to increase production, with crude steel output in China rising by 3.6% year-on-year to reach 93 million tons in March.