China's steel production recovered in October, ending a four-month decline. According to data from China's National Bureau of Statistics, output increased by 6.2% from September to 81.88 million tons as steelmakers' profit margins improved. Compared to the same period last year, production increased by 2.9%. This increase contributed to the cumulative decline in production to 3% in the first 10 months of the year. Real estate investment in China decreased by 10.3% yoy in January-October this year. Property sales decreased by 15.8% in 10 months compared to the region. In the same period, construction volume decreased by 22.6% compared to the same period last year.
However, the recovery in the steel sector may be temporary. Many mills are still facing financial difficulties and the slowdown in the real estate sector continues to negatively affect demand. Nevertheless, analysts say that rising industrial demand, government-backed construction projects and exports are driving the sector's recovery.
The government plans to provide more incentives in the future, but these measures may not be enough to solve structural problems in the sector in the long run, experts said. Steel producers warn that the revival in new housing projects and infrastructure investments, which are traditional sources of demand, may have limited effects.
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