FX.co ★ Steel Rises to 4-Week High

On Monday, steel rebar futures climbed above CNY 3,100 per tonne, marking their highest level in nearly four weeks. This surge was driven by improving margins for major steel producers as the market continued to evaluate the effects of the industry’s efforts to curb excessive competition and overproduction. Last month, the Chinese central government instructed major steel mills to cease production in an initiative aimed at addressing the issue of overcapacity within the ferrous metal sector. The anti-competition campaign heavily focused on steel and iron ore, as the ongoing property crisis in China continued to suppress demand for ferrous metals. This situation forced mills into intense competition for the limited market share available, consequently putting downward pressure on prices and increasing exports. Additionally, the China Mineral Resources Group has recommended that steel producers halt orders of iron from BHP's Jimblebar blend due to faltering long-term contracts, which may increase production costs.