FX.co ★ Stell Rises to Over 4-Month High

In July, steel futures in China increased significantly, reaching CNY 3,300 per tonne—marking the highest level since early March. This rise is driven by expectations of reduced production and a rebound in demand. Chinese authorities have committed to reforming industrial policies to tackle overcapacity in construction materials. Such initiatives are expected to benefit margins for steel manufacturers, even as the ongoing property crisis in China and protectionist measures from major steel-importing countries continue to weaken demand. In line with these developments, crude steel production fell to 75.5 million tonnes in June, marking the lowest production for that month since 2018. Furthermore, Baosteel, a significant steel producer, projected a decrease of 50 million tonnes in national output this year. Meanwhile, an announcement about a CNY 1.2 trillion investment in a hydropower plant has also bolstered steel prices. This project, which supports demand for ferrous metals, indicates the Chinese government's commitment to using infrastructure development to stimulate a slowing economy and mitigate the effects of its property sector challenges.