FX.co ★ Steel Pressured by Weak China Data

In early June, steel rebar futures slipped below CNY 3,000 per tonne, maintaining levels near their lowest point since September 2024. This decline can be attributed to underwhelming economic data from China, the dominant consumer, casting a shadow over demand expectations. China's export growth for May fell short of predictions, largely due to a significant reduction in exports to the United States amid ongoing trade tensions. Additionally, imports contracted beyond forecasts, indicating continued weak domestic demand. Consumer prices witnessed a decline for the fourth consecutive month, with producer deflation nearing a two-year low, highlighting the country's subdued economic pace. Despite US and Chinese officials resuming trade discussions in London today, market sentiment remains guarded. Furthermore, global steel markets faced added stress last week after President Donald Trump signed an executive order elevating US steel tariffs to 50%. This policy move increased domestic US steel prices but exerted downward pressure on international markets, particularly affecting China.