Steel prices dive further on accelerating recession fears as inflation scorches

Steel prices are dropping strongly as scorching inflation in the global economy has bolstered the odds of a recession situation. The inflation rate is sky-rocketing in the global economy and in order to tame the same central banks are hiking their interest rates like there is no tomorrow.

On Wednesday, the inflation report by the US Bureau of Labor Statistics spooked the market sentiment.  The release of the red-hot inflation soared has strengthened the odds of 100 basis points (bps) by the Federal Reserve (Fed). The annual US Consumer Price Index (CPI) print of 9.1% is going to force the Fed to make a historic move and dictate a rate hike by 1%.

Well, the Bank of Canada (BOC) has accelerated its interest rates by 1%. Therefore, the fed won’t look for mental support further and will announce the unusual.

On the demand front, escalating demand for automobiles in China is expected to spurt the demand for steel going forward. June’s production of automotive vehicles in China has been recorded at 2.499 million units, which is higher by 29.7%, as per China’s Association of Automobile Manufacturers (CAAM). The advancing pattern of automobile production could be a game changer for steel prices.