Steel price tracks other commodities to the south as market players await the key US inflation data on early Wednesday. Also exerting downside pressure on the metal are the softer Consumer Price Index (CPI) and Producer Price Index (PPI) data from China.
That said, the most active Steel rebar contract on the Shanghai Futures Exchange (SFE) renews the intraday low 4,050 yuan, down nearly 1.5%, while extending the previous day’s pullback from the monthly high. It’s worth noting that the prices of the hot-rolled coil and stainless steel futures on the SFE are also down 1.5% and 1.2% by the press time.
China’s headline CPI eased to 2.7% YoY in July versus 2.9% expected and 2.5% prior, whereas the PPI dropped to 4.2% compared to 8.0% market forecasts and 6.1% previous readings during the stated month.
On the other hand, recently increasing steel output propelled coke prices and hence eat away profits, which in turn could fade the incentive to increase steel production. The same joins China’s plans to reduce output citing environmental issues to keep steel buyers hopeful. Additionally, firmer China car production data also underpin optimism on the metal front.
However, hopes that Chinese steel output may increase in August, per SMM Survey, joins the market’s risk-off mood to pour cold water on the face of the metal bulls.
Elsewhere, chatters that the US tax, climate and health-care bill won’t be able to tame recession woes, as per JP Morgan, join the fears of more hardships for the Eurozone due to the Russian energy crisis to underpin the risk-aversion.
Amid these plays, the US 10-year Treasury yields struggle to extend the previous day’s rebound to 2.79%, around 2.786% by the press time. Also portraying the sluggish market is the S&P 500 Futures that remains unchanged at 4,125 at the latest, despite Wall Street’s losses.
Looking forward, the US CPI, expected to ease to 8.7% from 9.1% on YoY, as well as the CPI ex Food & Energy which is likely to rise from 5.9% to 6.1%, will be crucial for steel traders to watch for clear directions.
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EUR/USD continues to decline toward 1.0250 during the American trading hours on Friday. After the data published by the UOM showed that the long-run inflation outlook rose to 3% in August from 2.9% in July, the dollar gathered strength against its rivals, weighing on the pair.
GBP/USD is trading deep in negative territory near 1.2100 during the American session on Friday. With the UoM's Consumer Sentiment Survey pointing to a modest increase in the long-run inflation outlook, the US Dollar Index extended its rally, reflecting a broad dollar strength.
Gold stays relatively resilient on Friday and trades modestly higher on the day above $1,790. Although the greenback continues to outperform its rivals on the latest US data, falling US Treasury bond yields help XAU/USD hold in positive territory.
Shytoshi Kusama, the project leader of Shiba Inu announced the launch of Shiba Eternity for Vietnamese players. The game is available for testing and the team has asked users for their review.
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