The decline in steel production in China due to the curfews in March offset the decline in demand for steel products in the first quarter. Thus, the market remained stable and the situation will improve in the second quarter. This estimate was made by rating agency Fitch Ratings.
He estimates that Chinese residential construction saw a setback in the first three months of 2022 due to funding cuts, adverse weather conditions and quarantine. However, demand should increase once restrictions are lifted.
However, high growth rates were observed in infrastructure construction and industry in the first quarter. This creates favorable opportunities for accelerated growth in the second quarter of this year.
At the same time, Fitch foresees a significant increase in metallurgical raw material prices. According to the agency's analysts, they will remain high throughout 2022. Therefore, vertically integrated companies with their own raw material sources will gain a competitive advantage.
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