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Fitch expects China’s steel, cement and aluminum production to recover in Q2

Fitch Ratings Agency expected steel, cement and aluminum production in China to recover, with an increase in construction activity from the second quarter of 2024, but indicated that the rise in steel and aluminum production would be greater, supported by better profit margins.

The agency said that China’s crude steel production fell by 2% year-on-year in the first quarter, due to weak seasonal demand and margin pressure. However, margins began to rise in March as raw material costs declined, especially after the reduction in coke prices.

It explained in a report published Monday on its official website that the average selling price of iron ore rose by 7% on an annual basis during the first three months of the year, while the price of coke decreased by 5% during the quarter compared to last year.

Fitch said that average aluminum selling prices stabilized at 19,000 Chinese yuan ($2,627) per ton at the end of March, with demand rising, especially from the manufacturing sector, while aluminum production rose by 6.8% year-on-year in the first quarter.

Cement production decreased by 16% year-on-year, reaching 3.4 million tons, and the average selling price decreased by 22% year-on-year, as a result of the continued decline in real estate investment during the first quarter of 2024.

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