Steel prices rebound on supply constraints as mills owners voluntarily reduced production

Steel prices have witnessed a minor rebound despite the onset monsoon season in Asia. The season-sensitive commodity has picked some bids after remaining lower from a few trading sessions despite escalating odds of a fall in the demand for steel due to the arrival of monsoon in the Asian territory. The arrival of monsoon results in lower construction activities as monsoon rains halts the construction process, which leads to a significant fall in the demand of steel.

The major rationale behind the recovery in the steel prices is the advancing supply constraints. Various steel mills owners have voluntarily halt their production capacities to extremely lower levels. The steel mills owners are operating in an already high-inventory market thanks to the earlier Covid-19 issues and lower usage of steel due to higher interest rates, which reduced the demand for steel in the global market.