In fact, this is not news. Prices of steel stocks have been driven mainly by weaknesses in USD since early August instead of strengths in fundamentals. Steel prices have been declining since its peak in July. Most recently, China's second largest , the world's fourth largest steel producer, China Hebei announced yet another price cut .
China, the largest steel producer in the world, has let supply gone ahead of demand to take advantage of the increase in steel price in the second quarter this year. In August, Chinese steel producers cranked out record high output, as much as production of the rest of the world combined.
In the first half of the year, the steel order was driven more by restocking very low inventory, mainly in China, instead of renewed demand. The restocking is done. Catalysts in the second half lie in global economy, particularly developed countries. The auto industry has announced plans to increase productions in the second half while housing market has slowly recovered . Together with public infrastructure, the recovery from these two industries is key to supporting steel prices in coming months.