Steel prices attempt rebound as pessimism exhausts, mills owners to resume production


  • Steel prices eye some recovery as demand for automobiles to escalate.
  • Demand for automobiles remained upbeat in June and a similar performance is expected in July.
  • Construction activities to resume as monsoon may be concluded sooner.

Steel prices are eyeing a rebound after remaining in a bearish grip for the past few months. Pessimism about the steel prices is getting exhausted now and steel mill owners are returning to their production units. Earlier, steel producers halted production processes as margins were squeezed amid a significant slippage in steel prices.

To boost domestic steel production, China’s Commerce Ministry will extend anti-dumping duties on grain-oriented flat-rolled electrical steel imported from Japan, South Korea, and the EU for five years from July 23. This will boost China's steel mill owners to fire-up production capacities.

Now, steel prices are finding a cushion, and steel mill owners have chosen to resume production to cater to the likely growing needs. Automobile production is enlarging in China as China's Association of Automobile Manufacturers (CAAM) has reported a significant increase in sales data in June.

The demand for passenger cars has grown 36.9% on a monthly basis and 23.8% on an annual basis.  Also, the demand for commercial vehicles has grown 17.4% on QoQ but fell 37.4% on yoy. Going forward, the demand is expected to escalate further as zero-Covid policy implementation by the Chinese government will force them to keep themselves isolated from others.

Apart from that infrastructure projects are gearing up again after the conclusion of monsoon in various provinces of China. Earlier, heavy rains in various parts of China forced postpone of construction activities. Now, infrastructure projects and real estate will start picking up pace and eventually, the demand for steel. Investors should be aware of the fact that global recession worries will remain stable as western central banks are ready for a fresh leg of interest rate elevation to barricade price pressures.

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD remains choppy below 1.0200 on dismal EU GDP, Fed minutes eyed

EUR/USD remains choppy below 1.0200 on dismal EU GDP, Fed minutes eyed

EUR/USD is extending choppy trading below 1.0200 amid a downgrade to the Eurozone Q2 GDP and risk-aversion. The US dollar pauses its renewed upside ahead of Fed minutes. The euro remains vulnerable to recession fears and the gas crisis. 

EUR/USD News

GBP/USD recaptures 1.2100 as USD rebound fizzles

GBP/USD recaptures 1.2100 as USD rebound fizzles

GBP/USD is trading above 1.2100 in the European session on Wednesday as investors assess the implications of surging UK inflation on the BOE's next policy move. The US dollar fails to hold the upside amid souring risk sentiment ahead of US data and Fed minutes. 

GBP/USD News

Gold struggles near one-week low, focus remains on FOMC minutes

Gold struggles near one-week low, focus remains on FOMC minutes

Gold turns lower for the third successive day amid the emergence of fresh USD buying. Hawkish Fed expectations, rising US bond yields continue to underpin the greenback. Recession fears could limit losses for the XAU/USD ahead of the key FOMC minutes.

Gold News

Solana price hints at a 50% upswing under these specific conditions

Solana price hints at a 50% upswing under these specific conditions

Solana price shows an interesting setup as it tries to overcome a stiff resistance level. The fifth attempt to overcome hurdles will likely be successful due to multiple bullish confluences. Solana price has been on a clear uptrend since producing the June 14 swing low at $25.76.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures