February drew to a close with steel prices in the midst of a rally, following a slight reduction the week prior, with traders honing their focus on steel production cuts.
According to a recent piece from the Economic Calendar, Leia Toovey writes that China rebar futures grew 4% earlier in the week due to said cuts, but also due to seasonal demand.
Citing a recent report from Reuters, Toovey added that steel producers in China have been tasked with scaling back production to reduce pollution in time for the start of the China’s National People’s Congress.
Toovey writes:
The cutback in production ahead of the Congress was anticipated, but it also brings back to the forefront the fact that the country is serious when it comes to reducing pollution. Previously, the country announced that it would crack down on industries that were heavy polluters in order to reduce emissions.
A Cool February for Steel Prices
Our own Raul de Frutos wrote of the cool down in steel prices for February. He maintains that the slow down was just temporary and that, raw material prices, in addition to other factors are in full support of the ongoing steel price rally.
De Frutos concluded:
Steel prices have increased for three-consecutive months. The right time to buy steel was in November, now prices might need some time to digest last year’s gains. Steel buyers need to keep a close eye on China’s production, President Trump’s new policies and raw material price trends in order to identify new opportunities to buy steel in 2017.
How will steel and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:
by Kyle Fitzsimmons