Steel Price fails to extend the previous day’s corrective pullback from a five-month low as supply fears escalate. Also weighing on the metal is the market’s risk-off mood, as well as a firmer US dollar.
That said, the construction steel rebar on the Shanghai Futures Exchange fell 1.3%, while the hot-rolled coil dipped 1.1%. stainless steel rose 0.6%, per Reuters. The industrial metal recovered from the lowest levels since January by posting nearly 3.0% daily gains the previous day.
It’s worth noting that the latest data from the Shanghai Metals Market (SMM) raised oversupply fears by saying that China's stainless steel imports dropped 24% YoY in May, but exports rose 32.91% YoY. “In May 2022, stainless steel imports totaled 229,800 metric tonnes, down 9,176 mt or 3.84% month-on-month and 24.05% year-on-year,” add the SMM per Reuters.
SMM also cites the vigorously developing stainless steel industry in Southeast Asia, India and Vietnam by citing new plants opening one after another.
On the other hand, fears of the Fed’s aggression, as well as concerning the US recession. US President Joe Biden and Treasury Secretary Janet Yellen tried to convince markets that the recession fears aren’t inevitable. Further, Richmond Federal Reserve President Thomas Barkin said that there will be no rapid return for the U.S. economy to the experience of the previous decade of stable growth, jobs and inflation, Reuters reported.
While portraying the mood, the S&P 500 Futures drop 1.10% intraday to reverse the two-day rebound from the lowest levels since late 2020. It’s worth noting that the US Treasury yields also fail to cheer the risk-aversion as the benchmark 10-year Treasury yields dropped five basis points (bps) to 3.25% at the latest.
Given the fears of oversupply and recession, Steel Price may witness further downside. However, the shift in the market sentiment could offer breathing space to the bears if Fed Chair Jerome Powell again fails to impress bulls during his testimony on the bi-annual Monetary Policy Report.
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EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory.
GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.
Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.
Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.
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