FOCUS: China steel mills look to beat 2019 bear market through infrastructure growth

Chinese steel mills are banking on infrastructure projects to beat the 2019 bear market, although the remaining months of the year are not expected to be as rosy as January-June due to the country's slowing growth rate.

“Some sectors have been growing fast enough to bolster demand for some steel producers in the first half of 2019, especially those which supply steel to the infrastructure and heavy machinery industries,” an east China trader told Fastmarkets. “Major producers that have long-term contracts in infrastructure projects received more orders in the first half of 2019 compared with the same period in 2018,” he said. In fact, China issued 2.18 trillion yuan worth of local government bonds from January to June, 70% of the total amount planned for the whole year, according to the country's Ministry of Finance. Such bonds are mainly issued to have sufficient funds for boosting infrastructure development, such as construction for the 2022 Winter Olympics, shantytown renovations and rural development. China’s heavy machinery industry, meanwhile, posted annual growth of 25.3% in equipment...

Published

Miranda Song

August 22, 2019

15:54 GMT

Shanghai