Iron ore, steel price pare losses amid mixed concerns over recession, China ahead of US NFP

  • Iron licks wounds during the sixth loss-making week, steel prices seesaw around monthly high.
  • Fears of weak demand from China joins central bank aggression to weigh on prices.
  • Steady decline in Chinese steel inventories favors the industrial metal prices.

Metal prices struggle to defend the latest recovery moves as traders await the US employment data during early Friday morning in Europe.

That said, iron ore futures print mild gains while steel price seesaws around a monthly peak as traders consolidate recent moves.

Even so, iron ore braces for the sixth weekly fall in prices of the front-month September contract on the Singapore Exchange, up 4.3% around $110.30. The stated iron ore contract tested the lowest levels in nearly two weeks the previous day, to $104.70. Elsewhere, China's Dalian Commodity Exchange, the most-traded January 2023 contract advanced 0.9% to 711.50 yuan ($105.45) a tonne, said Reuters.

On the other hand, steel rebar prices on the Shanghai Futures Exchange rose 0.5% whereas hot-rolled coil and stainless steel gained 0.7% and 0.4% on a day by the press time.

A rebound in the steel margins previously prompted some of the producers to restart their manufacturing facilities. However, those manufacturing units couldn’t run at full capacity and continued to signal the supply gap, as per Reuters. The news also mentioned that steel stocks held by traders in 132 Chinese cities surveyed by Mysteel consultancy dropped 603,700 tonnes from last week to a six-month low of 20.3 million tonnes, as of Aug. 4. Inventories at 184 Chinese steel mills declined for the sixth week during July 28-August 3, to 4.76 million tonnes, Mysteel reported, per Reuters.

Talking about China, the ailing property sector, COVID-19 curbs, steel production cuts, and Sino-U.S. tensions over Taiwan are the key catalysts that keep metal buyers hopeful. However, broad recession fears exert downside pressure on metal prices.

Looking forward, the metal traders should pay attention to the risk catalysts and yields ahead of the US Nonfarm Payrolls (NFP) for July, expected 250K versus 372K prior, for clear directions.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

AUD/USD holds lower ground near 0.6950 on softer Chinese inflation

AUD/USD holds lower ground near 0.6950 on softer Chinese inflation

AUD/USD is holding lower ground near 0.6950 as sellers keep reins following softer Chinese CPI and PPI data. Markets remain risk-averse ahead of US inflation, which is crucial for the Fed's next rate hike move. 


EUR/USD: Fake triangle breakout drags Eurozone bulls to near 1.0200

EUR/USD: Fake triangle breakout drags Eurozone bulls to near 1.0200

The EUR/USD is hovering around Tuesday’s low at 1.0203 and is likely to display a steep fall on its violation. The asset is declining swiftly after facing barricades above 1.0240 and has shifted into bearish territory. In the early Tokyo session, the major has given a downside break of the 1.0209-1.0215 range.


Gold bears seeking a critical rally in US yields around CPI

Gold bears seeking a critical rally in US yields around CPI

The gold price is flat in Tokyo as markets await the US inflation data for July that will come out during the New York open. The price has been supported by lower yields and that is supportive because the yellow metal offers no interest. 

Gold News

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

HBAR price shows a drop in volume amidst the current downtrend. Hedera Hashgraph has the potential to rally towards 2000%. Traders should keep the smart contract alternative token on their watchlists and consider a dollar cost average approach for investing. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!