Wall Street Journal reported today that China is ramping up increased demand for steel, equipment and other materials used in construction. This information is also validated with a recent post we made concerning the mining industry.
After disastrous results the first two quarters of 2013, Chinese steel prices are beginning to rebound. In addition the sale of construction equipment and materials has increased. Industrial output increased 10.4%, comparing year over year growth. Just in July alone, there was a 9.7% according to government data published this week.
Solely within the construction segment, Cement prices are increasing due to the demand. Within the construction-equipment industry, Chinese excavator sales for August are up 12.9% versus 2012 and up 9% from June 2013. UBS industry analyst, Fu Weiqi said, “Sales of lowered price equipment and heavy trucks were strong.” Weiqi forecasts that equipment sales will continue to increase for the remainder of 2013.
All of these increases are a direct result from the current and upcoming projects focusing on capital spending and infrastructure. Consumer spending will also need to increase in order to offset debt.
