Steel price extend losses after three-day consolidation as China oversupply fears escalate

Steel prices have weakened further after a three-day consolidation on the Shanghai Futures Exchange. The asset has renewed its four-month lows as fears of overproduction of steel by China, the biggest consumer of building materials have escalated.

The zero-Covid policy by the Chinese administration has dented the demand for steel due to a halt in manufacturing activities. The Chinese economy is facing the headwinds of the resurgence in the Covid-19 pandemic. For the past three months, the Chinese manufacturing capacities are operating with extreme lockdown curbs. A strict restriction on the movement of men, materials, and machines has resulted in a serious fall in steel prices.