FX.co ★ Steel Prices Steady Despite Weak Chinese Output

Steel rebar futures held steady above CNY 2,970 per tonne on Tuesday, maintaining a stable trend observed throughout the past week. This occurred despite new data indicating a 6.9% decrease in China’s steel production in May, marking the first year-on-year drop since March when Beijing committed to addressing industry overcapacity. The decline has raised concerns about weakened demand for raw materials, fostering a cautious market outlook. Traders are also on alert as they anticipate the US Federal Reserve’s forthcoming policy decision. Although it is broadly anticipated that the Fed will keep interest rates unchanged, expectations for further rate cuts have diminished due to ongoing trade uncertainties and inflation risks driven by rising oil prices. Furthermore, market sentiment remains guarded following US President Donald Trump's call for a complete evacuation from Tehran amid ongoing Israeli airstrikes. President Trump also left the G7 summit in Canada prematurely to monitor the escalating situation in the Middle East.