Steel price extend losses after three-day consolidation as China oversupply fears escalate


  • Steel prices have witnessed a steep fall after a three-day consolidation.
  • Oversupply of steel has pushed the steel prices to four-month lows.
  • Zero Covid-19 policy in China will keep the steel prices on the tenterhooks.

Steel prices have weakened further after a three-day consolidation on the Shanghai Futures Exchange. The asset has renewed its four-month lows as fears of overproduction of steel by China, the biggest consumer of building materials have escalated.

The zero-Covid policy by the Chinese administration has dented the demand for steel due to a halt in manufacturing activities. The Chinese economy is facing the headwinds of the resurgence in the Covid-19 pandemic. For the past three months, the Chinese manufacturing capacities are operating with extreme lockdown curbs. A strict restriction on the movement of men, materials, and machines has resulted in a serious fall in steel prices.

New data from Global Energy Monitor's Global Steel Plant Tracker states that the steel industry could face $518 billion in stranded asset risk as countries work towards meeting their long-term carbon neutrality commitments, if the 345.3 million tonnes per annum (mtpa) of emissions-heavy blast furnace basic oxygen furnace capacity (BF-BOF) proposed or under construction is fully developed, as per SME Times.

Earlier, supply constraints of steel were dictating the asset prices as most of the economies were committed to meeting their long-term goal of carbon neutrality commitments. Now, renewed demand worries in China due to the pandemic and heavy rains in some parts of China have pushed the steel prices significantly lower.

 

 

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

GBP/USD recovers to 1.3300 ahead of UK Retail Sales data

GBP/USD recovers to 1.3300 ahead of UK Retail Sales data

GBP/USD trades with a positive bias for the third straight day on Friday and hovers near the 1.3300 mark in the European morning on Friday. Traders digest the BoE and Fed policy decisions, awaiting the UK Retail Sales data for further trading impetus. 

GBP/USD News
USD/JPY keeps BoJ-led losses below 142.50, Ueda's presser eyed

USD/JPY keeps BoJ-led losses below 142.50, Ueda's presser eyed

USD/JPY remains in the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.  

USD/JPY News
Gold consolidates weekly gains, with sight on $2,600 and beyond

Gold consolidates weekly gains, with sight on $2,600 and beyond

Gold price is looking to build on the previous day’s rebound early Friday, consolidating weekly gains amid the overnight weakness in the US Dollar alongside the US Treasury bond yields. Traders now await the speeches from US Federal Reserve monetary policymakers for fresh hints on the central bank’s path forward on interest rates.

Gold News
Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum

Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum

Shiba Inu remains strong on Friday after breaking above a symmetrical triangle pattern on Thursday. This breakout signals bullish momentum, further bolstered by a rise in daily new transactions that suggests a potential rally in the coming days.

Read more
Bank of Japan set to keep rates on hold after July’s hike shocked markets

Bank of Japan set to keep rates on hold after July’s hike shocked markets

The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session. 

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures