Shanghai steel futures extended gains to trade close to 4,900 yuan a tonne in June, amid supply concerns and despite China’s efforts to limit rising commodity prices against production curbs based on carbon emissions, pollutant discharges and energy consumption. China portside iron ore inventory hit 4-month low in the first week of June and shipment arrivals were lower than the prior-week, amid COVID-19 breakouts around China’s southern ports and lower exports from Rio Tinto. Iron ore is the raw material used to produce steel and China is the top steel producer and consumer. Steel prices rallied to an all-time high of 5,975 yuan per tonne on May 11th, buoyed by rising iron ore cost and as China’s steel capital Tangshan instructed most mills to cut production by 30%-50% until the end of the year to reduce carbon emissions.
Historically, Steel reached an all time high of 6198 in May of 2021. Steel - data, forecasts, historical chart - was last updated on June of 2021.
Steel is expected to trade at 4535.24 Yuan/MT by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 3708.31 in 12 months time.