Steel demand in China is set to increase on the back of newly approved policies in support of its construction sector. The new policies would cut taxes, improve the funding for local governments and boost up the infrastructure building and housing projects in 2019.
The proposal of new economic actions has already been approved by China’s President Xi Jinping in December 2018, which indicates more spending on construction and infrastructure to support economic activity in the country.
Commodity Inside assesses that over half of the Chinese steel demand comes from the construction and infrastructure sector. Growth in infrastructure has been on a downward trajectory as China has already developed necessary infrastructure while its real estate sector has also saturated in major cities.
The Chinese government also plans to develop northeast and west of the country which is left comparatively underdeveloped. The country has the plan to move around 100 million more people to urban areas before 2020 by promoting developments in the cities of these areas.
The new policies indicate that the investments will be focused on transportation, logistics, infrastructure, rural developments, public service facilities etc. during the next year. This will help revive growth in the infrastructure sector.