Steel prices rose 0.62% to 46830 due to China's property sector support

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Steel prices rose 0.62% to 46830 due to China's property sector support
Credit: © Reuters.

Steel prices showed a 0.62% increase, settling at 46830, driven by optimism regarding China's support for its struggling property sector. China's efforts to relax home-purchase restrictions and extend preferential loans for first-time buyers boosted confidence. Additionally, Chinese developer Country Garden received approval to extend bond payments, further enhancing market sentiment. Chinese steelmakers increased production since mid-August to evade potential output cuts, depleting inventories and raising expectations for iron ore demand. 

Global crude steel production also saw a 6.6% rise in July, with China, the top producer, contributing significantly. However, the year-to-date production in major steel-producing nations remained relatively stable, down only 0.1%. On the flip side, India's imports of finished steel from China reached a five-year high in the first four months of the fiscal year, signaling China's increased presence in the Indian steel market. India's domestic steel production and consumption also saw robust growth during this period. 

From a technical perspective, the market experienced short covering, with a 7.07% drop in open interest, settling at 1710. Prices surged by 290 rupees. Steel's support level is at 46520, with a potential test of 46210 if it drops below. Resistance is expected around 47030, and a breakthrough could lead to a test of 47230.

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