FX.co ★ Steel Rebar Extends Fall on Weak China Data

Steel rebar futures declined to CNY 3,170 per tonne on Friday, marking their lowest point in two weeks. This drop was driven by underwhelming economic data from China, the largest consumer of steel. In July, China’s industrial production grew by 5.7%, which reflects a slowdown from the 6.8% growth seen in June and falls short of the anticipated 5.9%. Additionally, retail sales increased by 3.7%, down from 4.8% in June, and didn't meet the forecasted 4.6%. Moreover, the prices of new homes decreased by 0.3% compared to the previous month, signaling weak demand in the property market despite increased incentives from local governments encouraging home purchases. Concurrently, China’s crude steel production reached a seven-month low in July as the country continued its efforts to address overcapacity issues, compounded by severe weather conditions such as extreme heat and heavy rain that disrupted outdoor construction activities. These factors have contributed to enhanced profitability, bringing steel mill margins back into positive figures.