FX.co ★ Steel Firms Despite Weak Demand

Steel rebar futures traded around CNY 3,090 per ton, rebounding after recent declines as firmer iron ore prices and improving sentiment toward China’s steel industry lent support. Confidence was reinforced by resilient crude steel output, which averaged 2.79 million tons per day in June, the highest level since March. Robust iron ore imports and expectations of further policy stimulus from Beijing also helped bolster the market mood. However, upside remains limited by ongoing weakness in China’s property sector: real estate investment in the first half of the year fell 18% year-on-year, while new construction starts dropped 23.4%. In addition, persistent high temperatures and frequent rainfall in parts of the country continued to disrupt outdoor building activity, keeping demand for construction steel muted.