·
Steel
price refreshes weekly high amid market’s cautious optimism.
- Fed’s Powell hinted at gradual pause in the
rate hike cycle while announcing 0.75% rate lift.
- Indonesia’s Krakatau, South Korea’s Posco
announces plan for $3.5 billion investment.
- Recession fears in the US, Japan and China
test bulls, US GDP Xi-Biden talks in focus.
Steel price takes the bids to renew
one-week high amid broad US dollar weakness, as well as cautious optimism in
Asia during early Thursday. In doing so, the metal ignores headlines suggesting
more investment in steel production, as well as fears of recession. While
portraying the moves, the most active steel rebar contract on the Shanghai
Futures Exchange rises to 3,980 yuan per metric tonne ($590) by the press time.
That said, Indonesia's Krakatau Steel
and South Korea's Posco have signed an agreement to invest $3.5 billion
starting next year to expand their production capacity in the Southeast Asian
country, Indonesia's investment ministry said on Thursday, reported Reuters.
The news also mentioned that the expansion will also include the production of
automotive steel for electric vehicles, the ministry said in a statement.
Elsewhere, US Treasury yield curve
inversion keeps signaling the fears of the US economic slowdown even if Fed
Chairman Jerome Powell’s speech signaled that the hawks are running out of
fuel. It’s worth noting that the US Federal Reserve (Fed) matched market
forecasts by announcing a 75-bps rate increase.
Also portraying the recession risks
were comments from the International Monetary Fund’s (IMF) Chief Economist
Pierre-Olivier Gourinchas, not to forget looming concerns over China’s failure
to return to the growth trajectory despite heavy stimulus announcements. On
Wednesday, JP Morgan followed the IMF and Moody’s white citing the recession
risks for the Eurozone.
Looking forward, updates from the
virtual meeting between US President Joe Biden and his Chinese counterpart Xi
Jinping will join the recession fears to entertain steel traders. However,
major attention will be given to the flash readings of the US second quarter
(Q2) Gross Domestic Product (GDP).