FX.co ★ Steel Drops to 4-Month Low

Steel rebar futures fell below CNY 3,060 per ton, hitting a four-month low as shrinking profit margins at steel mills and seasonally weak demand pressured prices. Industry data showed that the share of profitable Chinese steel mills dropped to about 51% in the latest week, down 4.8 percentage points from the previous week and 8.2 percentage points from a year earlier. The margin squeeze followed a fatal coal-mining accident in Shanxi last month, which pushed up coke prices and prompted mills to use more medium- to high-grade iron ore to boost efficiency. At the same time, crude steel production in the world’s largest producer continued to soften amid the prolonged slump in the property sector, with May output falling 2.7% year-on-year to 84.35 million tons.