China’s Steel Prices Hit Three-Month Low Amid Weak Construction Sector

Azeez Mustapha

Updated:

Unlock Daily Forex Signals

Select a Plan

£39

1 - month
Subscription

Select

£89

3 - month
Subscription

Select

£129

6 - month
Subscription

Select

£399

Lifetime
Subscription

Select

£50

Separate Swing Trading Group

Select

Or

Get VIP forex signals, VIP crypto signals, swing signals, and forex course free for lifetime.

Just open an account with one our affiliate broker and make a minimum deposit: 250 USD.

Email [email protected] with a screenshot of funds on account to get access!

Sponsored by

Sponsored Sponsored
Checkmark

Service for copy trading. Our Algo automatically opens and closes trades.

Checkmark

The L2T Algo provides highly profitable signals with minimal risk.

Checkmark

24/7 cryptocurrency trading. While you sleep, we trade.

Checkmark

10 minute setup with substantial advantages. The manual is provided with the purchase.

Checkmark

79% Success rate. Our outcomes will excite you.

Checkmark

Up to 70 trades per month. There are more than 5 pairs available.

Checkmark

Monthly subscriptions begin at £58.


Steel prices in China have plunged to their lowest levels in over three months, driven by sluggish demand in the nation’s construction sector, the largest consumer of the metal alloy.

On Wednesday, rebar prices on the Shanghai Futures Exchange (SHFE) dropped by as much as 0.8% to 3,483 yuan ($478.73) per metric ton, marking the lowest point since April 8.

By midday, the contract had slightly recovered but remained down by 0.7%.Recent data from China indicates a slow recovery in domestic demand.

The construction sector, in particular, has shown significant weakness, with a double-digit percentage decline in activity over the first five months of the year.

This poor performance has heavily impacted steel demand, contributing to the falling prices.SHFE hot-rolled coil steel prices also fell to a new low since April 8, reaching 3,687 yuan per ton before stabilizing at 3,688 yuan by midday, down 0.5%.

Similarly, SHFE wire rod steel decreased by 0.7% to 3,665 yuan per ton, and stainless steel saw a 1.2% drop to 13,955 yuan per ton.
China's Steel Prices Hit Three-Month Low Amid Weak Construction SectorWider Impact on Commodity Markets
The decline in steel prices extends beyond rebar and hot-rolled coil. The most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) fell by 1.2% to 818.50 yuan per ton, while the benchmark August iron ore contract on the Singapore Exchange dropped by 2.3% to $106.90 per ton.

DCE coking coal prices decreased by 2.7% to 1,520 yuan per ton, and coke prices declined by 1.3% to 2,209 yuan per ton.Despite the downturn, market participants believe that the decline in steel prices may be limited.

“Although demand has been weak, it’s not like it has evaporated completely. So, any fall in prices will not be overly dramatic, especially given that a lot of the negativity has been priced in,” commented a trader.

The SHFE rebar contract is expected to find support around 3,360 yuan, while the hot-rolled coil contract is likely to stabilize around 3,600 yuan, according to market predictions.

Looking Ahead: Policy Hopes
Market participants are now looking ahead to China’s key political meeting next week, hoping for policies that could boost steel demand.

“There might be some talks of boosting the economy, but what the market is really looking for are details,” said the trader.

In summary, while steel prices in China are experiencing significant lows due to weak construction demand, the potential for policy support and the inherent demand in the market may prevent a dramatic further decline.

Make money without lifting your fingers: Start using a world-class auto trading solution.

LonghornFXyour trusted Partner in CFDs, Cryptocurrencies and Stocks.

 

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

Leave a Reply

Your email address will not be published. Required fields are marked *