Steel Price refreshes yearly low below $600 even as covid probes China production

• Steel Price remains pressured for the second consecutive day.
• Fears of economic slowdown in the US, China’s coronavirus-led activity restrictions weigh on prices.
• Updates on India’s readiness for price revision, US inflation will be important for fresh impulse.

Steel Price stays on the bear’s radar as they renew 2022 bottom at around 3,885 offshore yuan during Wednesday’s Asian session. That said, the metal takes offers around CNH 3,885, $577, amid fears of contraction in global demand, mainly from the US and China.

The latest economic projections from the International Monetary Fund (IMF) appear to have renewed the market fears. The same could exert downside pressure on the Steel Price as softer GDP in the world’s largest economy questions the metal’s demand.

It should be noted that multiple cities in China are on a halt due to the covid-led restrictions. While the same weighs on the Steel Price, it should also improve the quote amid a halt in the steel output from China. However, broad fears of the economic slowdown and China’s inability to please steel buyers with hopes of major stimulus appear to have played their role in luring steel sellers.

Furthermore, comments from the Chinese Customs Official also weigh on the Steel Price. “China's foreign trade still faces instabilities and uncertain factors even as trade growth in May and June reversed the declining trend in April, said Li Kuiwen, a spokesman for the General Administration of Customs, during a news conference in Beijing on Wednesday,” per Reuters.

Elsewhere, the White House (WH) statement joined downbeat US data to trigger the market’s cautious optimism and test the steel bears. “The US economic data, including the June jobs report, are not consistent with a recession in the first or second quarters,” the White House said in a memo released on Tuesday, as reported by Reuters. The news contributed to the market’s profit booking moves ahead of the key data/events. Further, the US NFIB Business Optimism Index for June slumped to the lowest since early 2013 while flashing 89.5 figures versus 93.1 prior.

Moving on, Steel traders should pay attention to the US inflation data as strong inflation could increase the odds of a faster Fed rate hike and weigh on the quote. However, any negative surprise could help the metal to consolidate the recent losses around a multi-month low.