China has seen sluggish demand, particularly in the machinery sector, in the second half of 2024, while supply levels remain high. This imbalance has added additional pressure to the market, although rising nickel ore prices and lower production margins have provided some support.
Several factors may affect the market in the future. The upcoming Mid-Autumn Festival and National Day holidays, as well as expected interest rate cuts, are expected to positively affect market dynamics. Despite the weak overall demand, especially in the machinery and derivatives sectors, there is cautious optimism that these factors can stimulate market activity and investment.
The overall steel market has been weak since the beginning of the year, partly due to stalled infrastructure projects and slow bond issuance. However, the central government’s renewed focus on infrastructure in July-August and the acceleration of bond issuance are expected to boost steel demand in September-October. Bond funds are expected to flow into municipal construction, infrastructure and affordable housing, gradually increasing steel demand.
In addition, China’s promotion of major projects such as affordable housing and urban village renovation, as well as campaigns run by the Ministry of Commerce, are expected to further increase steel consumption. The campaign has already shown positive results in boosting demand for automobiles and home appliances.
In summary, although China’s stainless steel market faces ongoing challenges due to weak demand and high supply, the upcoming holidays and supportive policies offer potential for recovery. The steel market is expected to benefit from accelerating infrastructure investment and development projects and to experience a gradual recovery in the second half of the year.
Comments
No comment yet.