Street Calls of the Week
Steel prices dipped by -0.32% to settle at 46660, with concerns about financial problems in China's property sector offsetting strong infrastructure demand and reduced supply. Country Garden's missed payments raised worries about the financial stability of major Chinese property developers, despite efforts to avoid defaults. However, robust demand for infrastructure and Beijing's economic support measures tempered concerns. JPMorgan (NYSE:JPM) noted that while financial worries persist for property developers, high infrastructure construction levels counterbalance weak residential sales.
Additionally, China's crude steel output fell by 4.8% in August, contributing to price support. China's crude steel production in August dropped to 86.41 million metric tons, down from 90.8 million tons in July but up 3.2% year-on-year. Despite the monthly decline, daily steel output remained relatively steady. In India, finished steel exports decreased by 6.4% month-on-month in August but rose by 5.7% year-on-year. Notably, India's steel imports from China reached a five-year high in the first four months of the fiscal year.
Technically, the steel market experienced fresh selling, accompanied by a 14.81% increase in open interest, settling at 1860 contracts. Steel's support level stood at 46530, with a potential test of 46390, while resistance was at 46850, and a move above could lead to testing 47030 levels.