Reuters reported that a series of mini stimulus policies designed to rejuvenate China's flagging economy will help support steel demand over the coming months but prices will continue to be weighed down by a supply glut.

The country's steel association said that China's economy grew at an annual rate of 7.5% in the Q2 up slightly from 7.4% in the first three months of the year, responding to a modest stimulus package that included tax cuts for small firms, reserve requirement cuts for some banks and infrastructure spending.

The China Iron and Steel Association said that new housing construction helped drive an improvement in steel demand in June, and inventory levels declined 5.65% declined from the end of May but prices still remained near 11 year lows.

It said that steel production remains at a high level, which isn't conducive to easing the oversupply problems in the steel market, and it will be difficult for steel product prices to see any large scale recovery.