Chinese steel futures fell on Wednesday after hitting two-week highs in the previous session, dragging down the prices of steelmaking ingredients including iron ore as global economic headwinds added to worries about demand for ferrous metals.
Concerns over a rapid rise in steel production in recent weeks amid a fragile domestic demand recovery, and the prospect of intensified COVID-19 restrictions in China also weighed on the ferrous complex.
The most-traded January rebar contract on the Shanghai Futures Exchange ended morning trade 1.7 percent lower at 3,725 yuan ($534.87) a ton, snapping a three-session rally.
Hot-rolled coil, which is steel used in producing home appliances and car bodies, fell 1.9 percent to 3,787 yuan a ton following a six-session winning run.
Asian shares tumbled, the dollar held firm and two-year Treasury yields hit a new 15-year high, as a US inflation report dashed hopes for a peak in inflation, fueling bets rates may have to be raised higher for longer.
“Overseas interest rate hikes are detrimental to global commodities,” analysts at Zhongzhou Futures said in a note.
China is the world’s biggest producer and exporter of steel.
