Recently published research from Business Monitor International, "China Metals Report Q2 2014", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 03/13/2014 -- China's metals industry is set to face a protracted period of slowing growth as the country's rebalancing process begins in earnest. Companies operating in sectors that are tied heavily to the construction industry will take the brunt of weakness from the sharp slowdown in fixed asset investment.
With the Chinese economy on course for a continued slowdown over the coming years, we expect China's metals industry to come under greater pressure. The rebalancing of the Chinese economy away from fixedasset investment and towards private consumption will significantly dampen appetite for constructionrelated materials. In particular, metals such as steel and refined nickel will be adversely affected due to their heavy usage in the construction sector.
We forecast China's real GDP growth to average 6.1% between 2013 and 2023, compared with an impressive average growth rate of 10.3% per annum over the past decade. In our view, attempts by the Chinese government to arrest the structural slowdown in the country's economy will only cushion the impact of an economic slowdown, rather than revive a growth upturn. That said, we note that China will retain a structural deficit for key metals such as iron ore, copper and nickel despite slowing consumption growth.
View Full Report Details and Table of Contents
Government plans to significantly consolidate the metals and mining industry will continue to gain traction in the coming months, particularly with growing environmental concerns and increasing scrutiny on local government debt. Consolidation of the metals' industry will be driven by slumping profit margins, falling prices and the reorientation of China's economy away from fixed asset investment and towards private consumption. Indeed, state-owned companies, which already enjoyed a dominant role in the mining and metals industry, will emerge to be even more prominent after the consolidation.
However, we are aware that efforts aimed at consolidating the Chinese steel industry are susceptible to several roadblocks. First, anecdotal evidence suggests that local governments, reliant on steel revenues, often idle furnaces only for a period of time long enough to escape the central government's attention. Second, some of the furnaces that were torn down in Hebei had in fact been sitting idle for some time. Third, it is estimated that the potential job losses stemming from all state-required capacity cuts could reach as high as 200,000, a figure that could trigger widespread social unrest amidst the slowdown of the Chinese economy.
About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Materials research reports at Fast Market Research
You may also be interested in these related reports:
- Czech Republic Metals Report Q2 2014
- South Africa Metals Report Q2 2014
- Australia Metals Report Q2 2014
- Japan Metals Report Q2 2014
- Romania Metals Report Q2 2014
- Austria Metals Report Q2 2014
- Belgium Metals Report Q2 2014
- Iran Metals Report Q2 2014
- Turkey Metals Report Q2 2014
- Egypt Metals Report Q2 2014