Steel rebar futures climbed to CNY 3,290 per tonne on Monday, recovering from a near two-month low of CNY 3,180 on November 15th, as markets reassessed the potential impact of China’s economic support measures on ferrous metal demand.
Steel rebounds from two-month low
New infrastructure investment in China increased by 4.3% in the first 10 months of the year, suggesting that monetary and fiscal stimulus from Beijing could be helping to boost economic activity. In addition, the Chinese government passed a $1.4 trillion debt package for local governments, allowing them to swap out hidden debt and reduce financing costs as part of efforts to stimulate growth, following a series of interest rate and liquidity cuts by the People’s Bank of China (PBoC).
Output in China increases
As a result, steel production in China rose to 81.9 million tons in October, despite weak domestic demand. This surge in output led Chinese mills to increasingly target export markets, even as trade barriers from other nations have been growing. Exports during this period reached 11.2 million tons, marking the second-highest level on record.
