China Steel Outlook 2023
According to the news: Weak property investment and slower infrastructure fixed-asset investment (FAI) in 2023 will put pressure on China’s steel market fundamentals. China steel’s demand is largely driven by construction, but manufacturing also accounts for around 30% of steel demand.
We expect stable manufacturing FAI growth in 2023, but such growth is unlikely to offset a slowdown in construction activity. As a result, we expect pressure on steel’s average selling price (ASP) and cautious production volume. Still, we think margins will improve in 2023 on lower raw material costs.
In the steel sector, we believe changes in product mix is inevitable in response to a structural change in steel demand shifting toward sectors such as auto and high-end machinery or equipment.
