China's property steel demand could post first decline in six years

摘要

China's efforts to take the heat out of its property market in 2021 could result in the first decline in steel demand from the sector in six years, according to S&P Global Platts Analytics. China has tightened its monetary stimulus measures and clamped down on property sector financing since mid-2020. Beijing insists that houses should not be used for speculative purposes. A major plank of its 14th five-year plan is to put more money into the hands of consumers in order to boost domestic consumption, and one way of achieving this is to deleverage the property sector. More cash means more spending, the thinking goes. Platts Analytics presents two scenarios for property steel demand, both of which indicate there will be no growth from the sector this year. (See table below.) An upper range scenario would see the addition of just 6.07 million mt of steel compared with 2020, marking a 1.9% increase to 328.2 million mt. Platts Analytics' lower range estimate sees a decrease of 8.68 million mt to 313.4 million mt, marking a 2.7% fall.