Shanghai steel futures hit two-month highs and are now trading above 5500 yuan. It had hit an all-time high of 5,975 yuan on May 11.
Two important factors that are supporting prices. One is that China’s steel production, which was at 563.33 million tonne in H1 2021; secondly, China’s steel exports are up by nearly 23 percent for the month of June.
While there is stronger demand within China for steel, it is outside demand that seems to be picking up given the export numbers. Market also believes that China may impose tax to curb steel exports and that clearly seems to be supporting.
Shanghai stainless steel prices meanwhile are trading at record high, steel prices were up 6 percent on Friday and are up 14 percent in past week. Nickel, which is a major ingredient in steel is trading at five-month high. There is strong consumption, weak raw material availability and all of that has been supportive here.
Markets believe that more than China, now the US demand is going to be strong as the administration shifts focus to infra and construction.
Watch the accompanying video of CNBC-TV18’s Manisha Gupta for more details.