.gif)
Loading
Steel demand in China is expected to continue to decline in April as deteriorating property sales weigh on domestic steel markets.
The liquidity crisis facing property developers could extend into much of 2022, undermining Chinese steel demand for this year. China’s apparent consumption of crude steel fell 3.8% year-on-year to 72.29 million tonnes in March, due to the slowdown in the property sector.
The value of real estate sales in China fell 26.1% year-on-year in March, down further from the 19.3% year-on-year decline in January-February. China’s infrastructure investment rose 8.8% year-on-year in March and most manufacturing goods also saw growth, but the decline in property construction was enough to push back China’s overall apparent steel consumption in March.
Real estate accounts for about 30% of the country’s total steel demand. The share would be much higher if steel demand from construction-related sectors such as home appliances and engineering machinery were also taken into account.
Steel demand in China is likely to fall further in April, due to COVID-19-related restrictions, which are expected to have a greater impact on construction and production activities than in March, and new construction starts, which are likely to drop due to builders’ lack of liquidity.
July will be a peak month for builders’ debt maturities, and some will face a liquidity crunch in the months ahead, with property construction and steel demand remaining subdued.
Building construction in China is expected to drop 20%-30% year-on-year in 2022, weighing heavily on overall steel demand, especially in the second quarter.
