Chinese steel prices remained low in June, kept down by two trends. The first was the staggering surge in steel production in May, when annualised rates surpassed peak 2014 production. The second is the realisation, brought about most clearly by the slowing down of private investment, that the outlook for steel demand is weak. The good news for prices is we expect a recovery in H2. In Europe, the decision of the United Kingdom to leave the European Union adds uncertainty to our steel demand growth outlook. Should investment falter, the outlook for steel demand in the construction sector would worsen, particularly in countries that were just beginning to experience a long-awaited recovery.
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As global demand weakens and commodity prices fall, we're seeing a challenging environment in the metals and mining industry. Mining companies are increasingly coming under pressure to reduce operating costs, causing many to shift their strategic planning, delay new investments and look to long-term future growth.
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Commodity market report | Jun 2016
Global steel short-term outlook June 2016
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