Issue 39, 2024 - This week's editorial: Huge China stimulus propels sentiment but doubts remain

Fasten your seatbelts because China is putting a rocket booster under its economy. Authorities in the world’s largest steel market announced wide-ranging stimulus measures in two steps in the space of days last week, propelling economic sentiment and lifting steel prices. The fact this happened days before the start of China’s National Day holiday meant Chinese buyers were keen to restock for post-holiday business, further supporting prices. However, such is China’s economic predicament that lingering questions remain over the effectiveness of stimulus and sustainability of a pricing uptrend.

After sinking to a September low of $90.02/tonne cfr China on 23 September, the KORE 62% Fe price jumped to $98.69/t last Friday after China’s government announced various measures to cut banking and mortgage costs, reduce interest rates and fund local government house purchasing, among others. For more details, see the China section.

Chinese export HRC prices also surged to a month-high $485/t fob. However, the uptake in export markets was slow as buyers remained in wait-and-see mode, anticipating that Chinese HRC would undergo some correction following the holiday. Chinese HRC apparent consumption growth, moreover, remained significantly weaker than that of rebar and wire rod.

» Login to read the full report or sign up for a trial.