Steel prices advance as monsoon seems over in China, auto sales accelerate

Steel prices have rebounded firmly as higher passenger vehicles retail sales escalate hopes for recovery.
Russia is offering steel at lucrative discounts to cater for the mass market of Asia.
The conclusion of the monsoon will resume construction activities in China.

Sagar Dua FXStreet

Steel prices have advanced as the monsoon season is about to over in most provinces of China, and the demand will recover soon. The resumption of construction activities for real estate and infrastructure will bring a revival in demand for steel, and the corresponding prices may accelerate further.

Production of steel in China has remained vulnerable after the announcement of an export duty of 15% on selected pig iron, flat-rolled products of iron or non-alloyed steel, bars and rods, and various flat-rolled products of stainless steel, as per The Hindu. The steel export market in China has witnessed a severe slump after the sanctioning of export duty and the pledge to save the environment from the harmful effects of steel production.

Meanwhile, Russia plans to escalate steel exports at lower prices to cater to a large market in Asia. However, the payment mechanism will remain critical as the US abandoned Russia from the SWIFT payment mechanism after it invaded Ukraine. Russia is providing attractive discounts to address the mass market of Asia, which might force China to sum up its export duty levied on steel.

On the demand front, retail sales of passenger vehicles remained upbeat on July 11-17 after remaining 16% higher on an annual basis and 20% higher on a weekly basis. A gradual improvement in the overall demand after remaining muted due to the arrival of the monsoon may advance the steel price vigorously.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

GBP/USD fills weekly bearish gap; upside seems capped amid UK political chaos

The GBP/USD pair climbs back to the 1.3235 region during the Asian session and fails the weekly bearish gap opening amid a modest US Dollar downtick, though the upside potential seems limited.

EUR/USD declines to near 1.1450 amid concerns over progress for US-Iran peace deal

The EUR/USD pair drifts lower to around 1.1460 during the early Asian session on Monday. Concerns about progress for the US-Iran peace deal and expectations of higher US interest rates boost a safe-haven currency such as the US Dollar against the Euro. European Central Bank President Christine Lagarde is set to speak later on Monday.

Gold sticks to modest gains; bulls seem hesitant amid Fed hike bets, Iran risks

Gold attracts some buyers at the start of a new week, and seems to have snapped a three-day losing streak to a more than one-week low, touched last Friday. Crude Oil prices turn lower following a modest bullish gap after mediators Qatar and Pakistan announced a formal 60-day roadmap aimed at securing a final US-Iran peace deal. This helps ease concerns around inflation and higher interest rates, offering some support to the precious metal.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

Bitcoin recovers, Ethereum clings to support, XRP consolidates

Bitcoin, Ethereum and Ripple begin the week on a steadier footing after correcting by nearly 4%, 2% and 6%, respectively, in the previous week. BTC is attempting a modest recovery, trading above $64,500 on Monday, while ETH continues to defend the crucial $1,700 support level.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.