Baosteel's Bullish Outlook: Steel's Sustained Surge
Baosteel expects China's steel demand to receive a significant boost from both traditional and new infrastructure sectors for the remainder of this year and into 2024. This optimistic outlook is supported by new financial measures from China's top parliamentary body, including front-loading of local government bond quotas for 2024.
China's leading steel company, Baosteel, anticipates robust demand for steel from various infrastructure sectors in the final quarter of this year and throughout 2024. The company expressed this optimistic forecast recently, indicating that the latest stimulus from the government is likely to have a positive impact.
China's top parliamentary body has given a green light to front-load part of the local governments' bond quotas for 2024. This step is aimed at bolstering the economy and is expected to influence steel demand positively. The issuance of new sovereign debt has also been approved to give further support.
The steel demand in China is generally buoyed by traditional infrastructure projects such as construction, transportation, and utilities. These sectors consistently require vast quantities of steel, and with the new stimulus, are expected to push the demand even higher.
In addition to traditional needs, emerging sectors like technology and renewable energy are becoming significant steel consumers. These "new infrastructure" sectors will also benefit from the increased fiscal stimulus and, therefore, contribute to the rising demand for steel.
The latest stimulus measures, designed to prop up the economy, have broad-ranging implications. By allowing local governments to use part of their 2024 bond quotas now, it effectively accelerates several projects that would require steel, further driving up demand.
Given these developments, Baosteel is bullish about the outlook for steel demand in both the short and long term. This is good news for the steel industry in China, signaling not just a recovery from any economic downturns, but also potentially heralding a period of growth.
Baosteel's positive forecast for steel demand in China, supported by both traditional and new infrastructure sectors, is an encouraging sign for the industry. Backed by strong fiscal measures, this demand is expected to remain high throughout the rest of the year and into 2024, making it a favorable period for both Baosteel and the broader Chinese steel industry.