FX.co ★ Steel Holds Rebound from 9-Month Low

Steel futures in China stood at CNY 3,030 per tonne, maintaining their recovery after dipping to near nine-month lows of approximately CNY 2,940 in June due to anticipated supply reductions. Chinese policymakers have pledged to reform industrial policies with the aim of reducing capacity and addressing the oversaturation in the steel market. Such reforms are expected to benefit the profit margins of furnaces and mills, particularly as China's ongoing property crisis and increased protectionist trade practices by major steel-importing nations continue to suppress demand. Notably, leading producer Baosteel has projected a decrease in national steel output by 50 million tonnes this year. Supporting the market rebound, the construction PMI, as reported by the National Bureau of Statistics (NBS), reached a three-month high in June, showing stronger performance than other economic sectors. However, the rebound faced constraints as iron ore exports from Australia's Port Hedland increased significantly in May, following earlier supply disruptions due to adverse weather.