Citic Securities announced that they expect the Chinese steel industry to see a significant "turning point" by 2025 with additional incentive measures and production cuts, despite the pressure on demand from tariffs abroad. The Chinese investment bank expects the additional incentives to stabilize demand for steel, especially in the real estate and infrastructure sectors.
Citic also emphasized that deepening reforms in the steel industry could lead to a "larger than expected" reduction in supply. China's steel industry has suffered huge losses amid a prolonged real estate slowdown and a softening economy. The Beijing government has taken steps to address the oversupply, pledging to address the situation. Asian countries have acted as a barrier against the slump by imposing tariffs and policies to stop the flow of cheap Chinese steel into the market.
Charlie Tang, author of the Citic research note, pointed to a structural recovery in steel production and accelerating infrastructure investment. “Sectors such as ship and bridge construction are recovering,” he stated.
On the other hand, an executive at Australia-based iron ore miner Fortescue stated that the company does not see any signs of a slowdown in Chinese steel production and that inventories are “extremely low”. Fortescue reported that overall iron ore shipments in the third quarter of fiscal 2025 were up 6% from a year ago. “Our order books are still in good shape,” Fortescue Sales and Marketing Director Ben Kuchel stated.
In the Chinese steel industry, government incentive policies and production cuts are expected to accelerate the recovery in the sector.
Comments
No comment yet.