China’s real estate sector posted continued growth, with some indicators suggesting that strong sales figures were finally a more positive influence on construction activity in October, according to the latest set of National Bureau of Statistics (NBS) data. That in turn suggests that real estate has played a bigger role in sustaining real steel demand in October compared to most of the year, Kallanish notes.

Over January-October, China’s real estate sales by area were up 26.8% on-year at 1.2 trillion square metres, although this was 0.1 point slower than over January-September. New construction starts, meanwhile, were up 8.1% to 1.37 trillion square metres. New starts have not seen year-to-date growth rates increase since April, suggesting that this year’s improved sales revenues are finally filtering through into real construction activity.

Ten-month completions increased by 6.6% to 652 million sq m. Although growth here has continued to slow, implied completions in October were significantly higher than in September. That may be one reason why there was only a very small decline in inventory of real estate on the market, which dropped around 900,000 sq m to 692.22m sq m.

One key reason the steel market has been stronger than expected this year is that the real estate sector was much stronger than previously expected. Almost all of that impact has been during the spike in investment at the start of the year, however. This month’s figures suggest that demand from construction could now be strong at current levels, helping to sustain the steel market into the first half of 2017.