Demand for industrial metal in China surged as the country shifted gears to give a massive imeptus to construction of railroads, bridges and roads, aided by government’s support.
Several analysts and Chinese media reported that post lockdown in March, China upped its industrial activities to revive its economy from the distressed period during the COVID-19 pandemic.
According to Davis Index’s sources, China’s high consumption of nickel for stainless steel producion is leading to high scrap prices for stainless steel. Average global prices of zinc rose as well, as did the consumption of galvanized steel in China which again pushed down global inventories and raised prices.
China is a major consumer of metals and consumes approximately half of the word’s total industrial metals. With the huge investment in infrastructure pipeline of China, prices of base metals, steel, iron ore and other metals used for construction started to climb steeply since last few months.
Prices of iron ore has jumped by 35-40pc since March-end. Average global prices of zinc and nickel – used for construction — have risen between 25-30pc. Copper, which is needed for power transmission wiring, is up by almost 38pc since then.
Stainless steel companies, Yangjiang Zhengda Industry and Wuzhou Xinfeng Special Steel, have increased capacity to meet the high demand.
China’s stainless steel consumption will increase by about 5 to 6pc this year as reports suggest that consumption is still shooting upwards as stainless steel application is slowly expanding.
In most European countries, consumption of stainless steel is 20-30 kg per person and reports suggested that demand may fall owing to the effects of COVID-19 on the economy. But China’s consumption for stainless steel still has room for growth as it is near 17kgs per person, stated statistics of 2019. The rate of consumption is growing post-pandemic.