SteelGuru- China’s steel market is agog with anticipation of frenzied stimulus package with the economic indicators dipping. China’s economy grew at 7.4% for January-March, down from 7.7% in the fourth quarter of 2013.

Despite the new regime warding off mounting pressure for booster package ultimately it is expected they will yield to growth compulsions.

It is learnt that China will allow private investment in projects covering the energy, information and infrastructure sectors. Significantly the move is seen as way of allowing market forces to influence the economy more than state intervention. Market was quick to response with rebar futures picking up.

Significantly China’s steel industry reported a CNY 2.3 billion loss for Q1 2014, according to the China Iron and Steel Association (C1SA) as the industry continues to struggle with problems of over-capacity and softer demand.

However, crude steel output has remained above the 2mt per day mark, coming in at 2.152mt from April 2nd ten days 10-20th April up 3.8% on the previous ten days output.

Retail price levels remain unchanged and would take some time before actual action takes place in terms of easing of lending rates and infusion of capital by state in infrastructure projects. Some token measures expansion of railway network and banking debt restructuring has borne lukewarm result.

Raw material prices of iron and coke remained week.

Source – Strategic Research Institute, Steel Guru