Metal demand in China in 2018 is likely to slow further as the government tries to discourage speculation in the property market and constrain infrastructure investment, according to an insight report by Wood MacKenzie.
“Even with slow growth, however, companies should continue to benefit from better margins by producing less, a result of efforts to rationalise capacity and meet stricter environmental standards,” said the company. “And with better margins, 2018 could see a reverse in the previous downward investment trend and more investment outside China.
Wood MacKenzie anticipates five big trends for China's metals and mining industry in 2018:
• Further slowdown in metals demand.
• Supply-side reform and closures shifting from steel to aluminium
• Intensified environmental pressures.
• Good margins as the industry becomes more consolidated
• Potential growth in outbound investment.
Source: Wood MacKenzie