Steel yesterday
settled down by -1.13% at 43870 as steel demand and property sector concerns
lingered as repayment worries at two of the China's biggest developers plunged
confidence in the sector deeper into crisis. Steel demand remained soft as
property indicators deteriorated and lean seasonal demand leaves little hope of
a favourable shift. Moody's and S&P Global (NYSE:SPGI)
sent stark warnings about China's biggest commercial real estate firm, Dalian
Wanda Group, adding to concern that the country could be about to suffer its
most high-profile default since Evergrande. For June, China’s industrial
output topped forecasts with a 4.4% uptick from a year earlier, with crude
steel output posted a 1.1% month-on-month rise and 0.4% year-on-year growth.
People's Bank of China Deputy Governor Li Guoqiang's comments that monetary
policy in the second half of the year would be "targeted and
forceful". Any stimulus may see additional demand from restocking, with
steel inventories down 12% year-on-year in early July.
China's June crude steel output rose 1.1% from May and 0.4% from
a year earlier, the statistics bureau said, as mills were encouraged to ramp up
production after steel prices rose. The world's largest steel producer
manufactured 91.11 million metric tons of the ferrous metal last month, data
from the National Bureau of Statistics (NBS) showed, higher than 90.12 million
metric tons manufactured in May and 90.73 million metric tons in the same month
in 2022. India's finished steel purchases from China touched a six-year high in
the first two months of the fiscal year beginning in April, according to
provisional government data, while its overall imports reached a three-year
high.
Technically market is under fresh selling as the market has
witnessed a gain in open interest by 8.82% to settle at 2220 while prices are
down -500 rupees, now Steel is getting support at 43690 and below same could
see a test of 43500 levels, and resistance is now likely to be seen at 44210, a
move above could see prices testing 44540.