FX.co ★ Stell Rises to 3-Month High

In early December, China's steel rebar futures climbed to CNY 3,100 per tonne, marking a three-month peak. This increase is attributed to reduced supply and government intervention, despite ongoing weak demand. In an effort to address the prolonged property market crisis—an area pivotal to global rebar demand—the Chinese government is contemplating interventions such as cutting taxes on home purchases and introducing new mortgage subsidies. This consideration follows a significant decline in home prices during the third quarter and continued contraction in China's official construction PMI for the fourth consecutive month in November. Additionally, China's crude steel production in October saw a 12% year-on-year drop, the lowest October output since 2021. This decline aligns with China’s commitment to impose caps on industries plagued by overcapacity, aiming to curb excessive competition and prevent a deflationary spiral. Consequently, steel exports also experienced a 12.5% decline from the previous year, down to 978.2 million tonnes.