New property development in China has been on a downward trend for the past few years and is expected to remain so in 2022. Steel demand is down because all demand is down.Ĭhina’s massive appetite for steel has historically been driven by the property sector. Chinese government authorities have responded with increased fiscal support in the form of tax rebates and new infrastructure spending. S&P Global Commodity Insights reports that domestic demand in China remains sluggish and consumer confidence has fallen. The most straightforward explanation for the dip in steel production and consumption is the lockdowns and supply disruptions that resulted from China’s zero-COVID policy in the face of the new, more-contagious variants. These numbers begin to take on a deeper meaning when considering that China is the world’s leading producer and consumer of steel. In other words, China is making less steel, selling less steel, and buying less steel. Meanwhile, steel imports into China are down 65.2% on the year and Chinese steel production is believed to be down 2-3% for the year. In the first half of 2022, China’s steel exports fell 8.7% on the year, according to S&P Global Commodity Insights. The Deeper Meaning Behind China’s Steel Numbers Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy.
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