Will Approval of Large Infrastructure Projects Boost China Steel Market?

2014-12-26

Since Oct. 1, China’s National Development & Reform Commission (NDRC) has approved 43 infrastructure projects, including 8 large projects on Dec. 22 and 23, with investment totaling 234.6 billion yuan.

Will the approval of building those infrastructure projects, involving air port, railway, highway, etc., boost the sluggish steel market in China?

“Domestic steel mills are now desperate for orders and the approval of those large projects will grow demand for steel products with beginning of construction,” a steel analyst told Securities Daily in an interview.

"It is now unable to calculate how many steel products those projects will consume," said the analyst, adding that benefits to domestic steel mills will also vary according to their product mix and location.

The domestic steel industry is now facing great challenges, including liquidity conditions, falling prices and weak demand.