Weak output seen in China steel and cement sector in Q3

But demand for aluminium remains strong.

The steel and cement sectors in China are expected to face weak output in the third quarter of 2024, according to Fitch Ratings.

This is due to subdued demand from the property and infrastructure sectors, as well as slower construction activities during the summer season.

In contrast, the demand for aluminium is expected to remain strong, driven by ongoing manufacturing activities.

In the first half of 2024, China's crude steel production decreased by 1% year-on-year, mainly due to low margins and soft demand. Despite a decrease in raw material prices, the average selling price for steel also fell, reflecting the overall market conditions.

The cement sector saw a more significant 7% year-on-year decrease in output, attributed to a sustained decline in property investments and slower growth in infrastructure spending.

Whilst the average selling price for cement was 15% lower year-on-year, there was some improvement as producers reduced production to stabilise prices.

On the other hand, aluminium production increased by 7% year-on-year in the first half of 2024, driven by investments in green energy, automotive, and home appliance sectors.

This helped push the average selling price for aluminium to a two-year high by the end of May 2024.