- Steel prints three-day downtrend to refresh yearly bottom.
- Chatters surrounding inflation and recession underpin market’s rush towards risk-safety.
- Shanghai’s covid update, doubts over China stimulus keep metal traders worried.
Steel Price remains on the back foot for the third consecutive day as sellers attack the $600 threshold, near 4010 Chinese yuan per tonne at the latest, on Shanghai Futures Exchange (SFE) during Tuesday’s Asian session.
That said, prices of steel rebar on SFE weren’t the only metal indicator that portrayed the market’s pessimism as steel prices on the London Metal Exchange (LME) and COMEX also hint at dark days for the industrial metal.
The escalating fears of economic slowdown weigh on the industrial metal prices as traders rush for risk-safety. A record-high print of the US one-year inflation expectations, as per the NY Fed’s survey of one-year-ahead consumer inflation expectations, join chatters surrounding recession to drown the Steel Price.
On the same line could be the hopes of a further increase in inflation and hawkish Fedspeak. Considering the data, White House Press Secretary Karine Jean-Pierre told reporters that she expects new Consumer Price Index (CPI) data to be highly elevated. Further, Atlanta Fed President Raphael Bostic said that recent inflation data has not been as encouraging as I would have liked, per Reuters.
Elsewhere, Shanghai’s first coronavirus Omicron sub-variant BA-5 case escalated virus woes and public outrage after the dragon nation failed to sustain the unlock activities. Moreover, strong inflation data from the Asian major and doubts over Beijing’s GDP goal, as well as on the stimulus’ ability to renew optimism, also weigh on the steel prices due to China’s status as the world’s biggest metal consumer.
On the positive side, India announced a bit of relaxation of duties on steel products and the same appears to limit the metal’s plunge, at least for now.
However, looming woes of economic contraction and central bankers’ aggression keep the steel bears hopeful with eyes on Wednesday’s Consumer Price Index (CPI) for June, expected 8.8% versus 8.6% prior.
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