Issue 38, 2024 - This week's editorial: China receives limited US Fed boost, scrap prices seen bottoming

The US Federal Reserve’s long-expected interest rate cut provided a limited boost to Chinese steel prices last week, but two typhoons hampered activity in China’s eastern economic hubs and fundamentals remained weak. In Europe, amid economic stagnation, steel prices dropped, contrary to mills’ attempts to hike them. However, Turkish rebar mills succeeded in raising values, sparking expectations that scrap prices have bottomed.

New data showed China's rebar production in August fell to levels not seen since 2012, reflecting ongoing weakness in the construction steel market. Although rebar and hot rolled coil inventory fell last week, so did apparent demand as market confidence remained low. Doubts started to arise that China’s traditional September/October peak demand season would materialise this year. For more, see the Asia section.

On the upside for those suffering from Chinese exports, however, these appeared to be facing constraints from a stronger yuan versus the dollar, as well as Chinese port congestion. Stronger Asian currencies in general supported a rise in the ASEAN billet import market for the second consecutive week.

Turkey meanwhile reported multiple fresh scrap import deals, which pointed to a drop in prices. However, Turkish rebar mills closed deals at higher values to the EU and Balkans, helping them improve order books and increase utilisation rates. Some were even offering December-shipment material. 

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