“China’s covid-19 outbreak will undoubtedly impact national steel demand, whether the easing of ‘zero tolerance’ permits infections to grow or the government imposes sweeping lockdowns,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.
“Therefore, we view the market as having peaked for the time being until this outbreak runs its course and stimulus trickles through to real demand in the second half,” he said in a note.
China has reported more local symptomatic covid-19 cases so far this year than it recorded in all of 2021, as the highly transmissible Omicron variant triggers outbreaks from Shanghai to Shenzhen.
A resurgent coronavirus at home, sluggish domestic real estate market, geopolitical tensions may prompt China to further ease monetary policy, despite a widely anticipated interest rate hike by the U.S. Federal Reserve later this week.
(With files from Reuters)
