FXStreet (Barcelona) – Greg Gibbs, FX Trading Strategist at RBS, notes that weak demand and a flat production have led the Chinese steel prices to fall down to 17.6% year-to-date.
Key Quotes
”Chinese steel prices have fallen further over the last month, hitting new lows on our index based on data available back to 2003. They are down 5.5% over the last month, down 17.6% year-to-date.”
“However, the iron ore market may be achieving better balance, with slowing imports and probably some slowing in domestic Chinese production, helping iron ore prices improve over the last month as port inventories have fallen. The one-month forward iron ore swap price is up from the mid-$40s per tonne low point at the beginning of April to the low $60s. Although 12mth forward swaps are around $50 per tonne, suggesting a lack confidence in recent price gains being maintained.”
“The falling steel price may be another indicator of weak demand in China, especially since steel production has been flat for the last two years, and exports of Steel from China have been trending up.”
(Market News Provided by FXstreet)