However, experts believe that this impact will not immediately reflect on steel and iron ore demand due to the project's long-term construction schedule.
Following the groundbreaking ceremony on July 19, attended by Chinese Premier Li Qiang, a rapid rise was observed in the metal markets. Iron ore futures contracts for October delivery on the Singapore Exchang increased by up to 4.9% this week, while Shanghai steel futureincreased by approximately 4% as of Thursday compared to pre-announcement levels.
Expected to be the world's largest and most expensive hydroelectric power plant, this massive project will generate approximately 300 trillion watt-hours of electricity, three times the annual electricity production of the Three Gorges Dam. This amount is more than five times Singapore's electricity consumption in 2024.
According to analysts, the challenging geographical structure and harsh climatic conditions of the Tibetan Plateau will necessitate the use of a high amount of steel in the dam's construction. In this context, it is estimated that the project will consume six million tons of steel. This figure significantly exceeds the Three Gorges Dam's steel usage of 70,000 tons.
Analysts agree that this major infrastructure project will create significant demand for ferrous metals such as iron ore and steel, but point out that this demand will be felt gradually throughout the construction process rather than immediately, as the project will take five to seven years to complete.
The slowdown in China's overall construction sector is another factor limiting the impact of mega projects on the market. However, large-scale infrastructure investments such as dam projects are still strengthening expectations of long-term recovery and increased demand in metal markets.
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