Steel Price fades rebound from yearly low on China oversupply fears, risk-off mood


Share:
  • Steel Price consolidates the previous day’s gains from five-month low.
  • Fears of oversupply from China magnify after the latest trade numbers.
  • Sour sentiment amid fears of recession, hawkish Fed also weigh on commodity prices.

Steel Price fails to extend the previous day’s corrective pullback from a five-month low as supply fears escalate. Also weighing on the metal is the market’s risk-off mood, as well as a firmer US dollar.

That said, the construction steel rebar on the Shanghai Futures Exchange fell 1.3%, while the hot-rolled coil dipped 1.1%. stainless steel rose 0.6%, per Reuters. The industrial metal recovered from the lowest levels since January by posting nearly 3.0% daily gains the previous day.

It’s worth noting that the latest data from the Shanghai Metals Market (SMM) raised oversupply fears by saying that China's stainless steel imports dropped 24% YoY in May, but exports rose 32.91% YoY. “In May 2022, stainless steel imports totaled 229,800 metric tonnes, down 9,176 mt or 3.84% month-on-month and 24.05% year-on-year,” add the SMM per Reuters.

SMM also cites the vigorously developing stainless steel industry in Southeast Asia, India and Vietnam by citing new plants opening one after another.

On the other hand, fears of the Fed’s aggression, as well as concerning the US recession. US President Joe Biden and Treasury Secretary Janet Yellen tried to convince markets that the recession fears aren’t inevitable. Further, Richmond Federal Reserve President Thomas Barkin said that there will be no rapid return for the U.S. economy to the experience of the previous decade of stable growth, jobs and inflation, Reuters reported.

While portraying the mood, the S&P 500 Futures drop 1.10% intraday to reverse the two-day rebound from the lowest levels since late 2020. It’s worth noting that the US Treasury yields also fail to cheer the risk-aversion as the benchmark 10-year Treasury yields dropped five basis points (bps) to 3.25% at the latest.

Given the fears of oversupply and recession, Steel Price may witness further downside. However, the shift in the market sentiment could offer breathing space to the bears if Fed Chair Jerome Powell again fails to impress bulls during his testimony on the bi-annual Monetary Policy Report.

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD declines toward 1.0800 after US data

EUR/USD declines toward 1.0800 after US data

EUR/USD lost its bullish momentum and declined toward 1.0800 in the second half of the day on Thursday. The upbeat Jobless Claims and February PMI data from the US helps the US Dollar find demand and weighs on the pair.

EUR/USD News

GBP/USD drops below 1.2650 as USD rebounds

GBP/USD drops below 1.2650 as USD rebounds

GBP/USD reversed its direction and declined below 1.2650 after rising above 1.2700 earlier in the day. Renewed US Dollar strength on the back of better-than-forecast Jobless Claims and upbeat PMI data makes it difficult for the pair to keep its footing.

GBP/USD News

Gold stays below $2,030 as markets assess US data

Gold stays below $2,030 as markets assess US data

Gold is having a hard time preserving its bullish momentum and trading below $2,030 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield holds steady near 4.3% after US data, not allowing XAU/USD to gain traction.

Gold News

XRP price declines with developments in SEC v. Ripple lawsuit

XRP price declines with developments in SEC v. Ripple lawsuit

XRP price dropped below $0.55 on Thursday as both Ripple and SEC work on remedy-related briefs. March 13 is the next key deadline for the SEC v. Ripple lawsuit.  

Read more

Nvidia drives global markets to records, as European stocks defy German economic gloom

Nvidia drives global markets to records, as European stocks defy German economic gloom

Markets are a sea of green after Nvidia’s earnings report has boosted global risk appetite and stock markets surging. Boost to Nvidia’s share price after another monster earnings report and super forecast has led to a collective relief rally across markets.

Read more

Forex MAJORS

Cryptocurrencies

Signatures