- Steel price extends the week-start pullback from a two-week top.
- China announces further covid-led manufacturing restrictions in Shenzhen.
- Output restrictions to limit emissions, talks of industry-wide capacity reduction targets also weigh on metal prices.
- Hawkish Fed bets join mixed concerns surrounding Beijing to keep sellers hopeful.
Steel price remains pressured on early Tuesday, drowned by grim concerns surrounding the largest consumer China, as well as fears of economic slowdown due to the aggressive central bank actions.
That said, steel rebar prices on the Shanghai Futures Exchange (SFE) fell 3.1% while hot-rolled coil dropped 2.4%. Stainless steel lost 1.2% on a day by the press time.
Steel prices stretched losses after authorities in China's southern city of Shenzhen shut the world's largest electronics market of Huaqiangbei and suspended service at 24 subway stations on Monday in a bid to curb a COVID-19 outbreak reported Reuters. Additionally, steel production control to curb emissions in China also dents demand for metal.
It should be noted that Reuters also came out with the news suggesting that in Tangshan, China's biggest steel-producing city, authorities and mills reportedly met on Friday to discuss capacity reduction targets. “To meet its target, Tangshan's average daily output for the rest of the year should be less than 314,700 tonnes, compared with 352,300 tonnes over January-July, based on a calculation by industry information provider Mysteel,” per the news.
Elsewhere, Politico came out with the news suggesting the Biden administration to ask congress to approve a $1.1 billion arms sale to Taiwan, which in turn appears to have triggered the latest run-up. Before that, the movement of the US vessels in the Taiwan Strait and American diplomats’ visits to Taipei teased China. On the same line were concerns raised by Financial Times (FT), over the mounting pressure on Chinese banks. “Chinese residential property owners are rushing to pay off their mortgages early, heaping pressure on commercial banks that were already struggling to identify attractive lending opportunities,” mentioned FT.
On a broader front, fears of economic slowdown, amid the aggressive rate hikes from the global central banks, also exert downside pressure on the steel price. That said, the CME’s FedWatch Tool signals a 72.5% chance of the Fed’s 75 basis points (bps) rate hike in September.
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD drops toward 1.0700 after US jobs report
EUR/USD came under renewed bearish pressure in the second half of the day on Friday and declined toward 1.0700. Stronger-than-expected Nonfarm Payrolls (NFP) data helps the US Dollar gather strength ahead of the weekend and forces the pair to stay on the back foot.
GBP/USD extends slide below 1.2450 amid a stronger USD
GBP/USD dropped further and hit fresh daily lows below 1.2450 amid a stronger US dollar. The Greenback remains firm following the release of the US May jobs report. Despite losing almost 100 pips on Friday, GBP/USD is still on track for a weekly gain.
Gold falls below $1,960 as US yields rebound after US jobs data
Gold price turned south and declined below $1,960 on Friday. After the data from the US revealed that Nonfarm Payrolls rose 339,000 in May, the benchmark 10-year US Treasury bond yield gained more than 2% and recovered toward 3.7%, weighing heavily on XAU/USD.
China crypto community picks Ethereum, Arbitrum and BNB Chain as top protocols
Ethereum, Arbitrum and BNB Chain protocols are top picks for the Chinese crypto community, data from a report shows, a possible bullish catalyst for tokens related to these protocols as Hong Kong opens the door of crypto to retail investors.
LULU stock adds 15% on big Wall Street beat
Lululemon Athletica did it again. In something that has become quite predictable, LULU stock sailed 14.9% higher in Friday’s premarket to $377.20 after the prized athleisure brand posted a nearly 15% earnings beat for the first quarter.