- Steel Price remains firmer for the third consecutive day, keeping the bounce off yearly low.
- Over 6.0% fall in the global steel output joins sluggish USD to underpin bullish bias.
- Fears of recession, headlines concerning China adds filter to the north.
Steel Price extends the previous week’s recovery towards 4,300 Chinese yuan (CNH), around 4,280 CNH heading into Tuesday’s European session.
The metal’s latest gains could be linked to the market’s optimistic optimism, as well as the softer US dollar. However, receding fears of oversupply appear the top reason for the Steel Price to portray the quarter-end positioning.
That said, the Scrap Monster quotes the World Steel Association (worldsteel) figures to mention the reduction in the global steel output during the January-May period. That said, the news states that the steel output by the 64 reporting countries dropped to 791.8 million tons during the initial five months of 2022.
On the other hand, the US Dollar Index (DXY) struggles to extend the previous two-day downtrend as it flirts with the 104.00 threshold. In doing so, the greenback seems to follow the US Treasury yields amid a risk-off mood. That said, the US 10-year Treasury yields dropped 1.9 basis points (bps) to 3.17% by the press time.
Elsewhere, China’s rejection of the speculations suggesting a flood-like stimulus joins anti-dumping tariffs on the US, the UK and the European Union to weigh on the metal prices. “China’s commerce ministry said on Tuesday it would extend anti-dumping tariffs on certain steel fasteners imported from the European Union and the United Kingdom for five years,” said Reuters.
Moving on, US CB Consumer Confidence for June, prior 106.4, will precede Wednesday’s ECB Forum as an important catalyst to determine short-term market moves.