Steel Sector Update - China Exports Normalise On Rebate Cuts: Motilal Oswal
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Motilal Oswal Report
China’s May steel trade data shows exports returning to normal levels, which is reassuring for the regional demand-supply balance.
Moreover, iron ore imports plunged 9% month-on-month to 90 million tonne, the lowest in the past 12 months.
With June–July being a seasonally weaker construction period in China (due to high temperatures and rains), iron ore imports are likely to decline further, which could impact iron ore prices in the near term.
Therefore, we expect regional steel prices to be subdued in the near term, particularly as China hot rolled coil prices have corrected by more than 10% in the past three weeks.
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