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China worries linger in market as steel price drops past 11.5 year low in September

Despite risk-on in favor today, worries over China continues to linger in the market, especially in the commodity segment. And with commodities continuing their rout, recent Glencore share sell offs suggests equity markets can't make ways when commodities are clearly under threat.

Steel, which can be called as key barometer of world construction and industries dropped to lowest level in more than a decade. According to MEP, price has fallen to 11.5 year low in September.

China before slowdown was consuming about more than 50% of global steel production which led to massive increase in capacity of domestic production and now with slowdown these domestic producers are looking to export some of their surplus.

According to analysts, steel market is excessively oversupplied.

Steel price in Shanghai fallen below RMB 1850 per ton in January contract and price action suggest bottom hasn't hit yet. Steel price for the same contract dropped from RMB 5500/ton in mid-2011 to current level, which clearly suggests the level of strain.

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July 2 15:00 UTC Released

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