Fitch rating agency has been crossing the wires with comments related to Chinese steel production.
- Fitch on Chinese steel production says demand will be supported by higher infrastructure investment by the government.
- Fitch on Chinese steel production says expects a slowdown in residential property construction and an overall decrease in total steelmaking capacity.
- Fitch on Chinese steel production says expect profitability to recover due to normalising raw material costs, stabilising average selling prices.
- Fitch says expects china’s “annual apparent steel consumption” (steel production less net exports) to fall.
FX implications
There is a keen focus on the global metals industry following the recent announcements over a phase one trade deal between the US and China. While there is no direct impact to such news, it is an area to watch with respect to correlations to the Fx space. AUD trades as a proxy to commodity prices. Other metals saw gains last night too with zinc up 1.4%; nickel up 0.46% and aluminium up 0.45%.
However, stronger economic data also eased concerns about demand. “A New York Federal Reserve measure of general business conditions in the next six months jumped in December to its highest level in five months. Signs of improvement in China were also evident. Industrial output and private consumption were both stronger than expected. This saw copper prices push towards USD6200/t while zinc was also up strongly,” analysts at ANZ bank explained.
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