Steel futures in China were at CNY 3,030 per tonne, holding their rebound since trading near nine-month lows around CNY 2,940 throughout June on incoming supply cuts. Chinese policymakers vowed to reform industrial policy to cut back capacity and combat the current state of an oversupplied steel market.
Such policy would aid margins for furnaces and mills as the ongoing property crisis in China and the growing momentum of protectionist trade policies from key steel importers eroded demand. Previously, major producer Baosteel stated it expects national output to fall by 50 million tonnes this year. Also contributing to the rebound, the construction PMI measured by the NBS rose to a three month high in June, outperforming other sectors of the economy. Limiting the rebound, iron ore exports from Australian Port Hedland surged in May after bad weather limited supply earlier this year.
