Signs of a price recovery in Q4 2012 followed months of falling steel. The domestic composite steel price index, the CSPI, released by the CISA, fell below 100 points on Sept. 7, the lowest level ever since June 2009. But the index later picked up and rose to 106.01 points on November 9, pointing to signs of price recovery.
The sentiment is also improved with the growth stimulation measures announced by the government. In September, the National Development and Reform Commission (NDRC) approved 25 new projects for urban railway transport, 13 highway projects and 13 additional railway projects.
Increasing to 22 projects from the initial 9 projects, the railway construction projects are the highlights of Q4 2012, with the full-year fixed assets investment in the sector rising to RMB 630bn (US$98.9bn) from the previously estimated RMB 516bn ($81bn). After months of correction, upstream sectors, the real-estate industry for instance, have begun to show signs of recovery.
In November, the sales, investment, land auctions, construction, and new starts all registered faster growth. According to the latest statistics from the National Bureau of Statistics of China (NBS), nation-wide investment in the property sector jumped 16.7% y-o-y in the January-November period, totalling RMB 6477bn ($1016.6bn). Meanwhile, the country’s house sales totalled 917Mm2 in the first 11 months of 2012, up 2.4% from a year ago. The sales value rose 9.1% y-o-y to RMB 5352.5bn ($840bn), with the growth rate 3.45% higher than that in the January-October period.
Many property developers say they have achieved their annual sales targets for 2012 in advance or their sales had exceeded the 2011 total.
Boosted by the higher price and demand, the country’s major steel mills began to return to profit in the last quarter. CISA data showed that major steelmakers registered a total profit of RMB 307M ($48.1M) in November, the first monthly profit since June. Further price gains are expected in Q1 2013.
With the policy prospect going steady, China’s steel sector has already bottomed out, according to experts. They suggest that China’s steel demand in 2013 will return to its normal pattern of seasonal fluctuations as in previous years.
Source: China Metals e-mail email@example.com