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2026-09-28 12:46:39 Citi published a research report stating that China's apparent cement demand peaked in 2014 and has since declined by about 3.3% annually. The broker believes steel is relatively more of a "late-cycle" sector than cement, with a milder medium-term decline expected. Trends in road construction and railway investment over the past three years have reflected this divergence. Steel demand most recently peaked in 2020, and has since fallen by about 3.9% annually, with 1H26 down 2.9% YoY. The broker noted that the past five years also included a sharp decline in property sector demand and steel destocking, therefore the pace of decline is expected to slow or stabilize. If steel demand continues to decline about 3.9% YoY, this would imply an annual demand reduction of around 30 million to 35 million tons. However, the broker expects growth in Indian steel demand to offset at least half of the reduction. China's annualized cement output has fallen to the lowest level since 2009, while steel output remains about 65% higher than 2009 levels. If China's net steel exports retreat to 2009 levels, which were close to negligible, steel output would still be about 43% higher than 2009 levels assuming other conditions remain unchanged. The broker also said cement is more aligned with the early-cycle segment, while steel is more driven by durable consumer goods and more advanced infrastructure. Road construction has slowed, falling 9.1% YoY in the first four months of 2025 after declining 11% YoY for full-year 2024, marking the third consecutive annual decline. Railway investment has shown greater resilience, rising 5.1% YoY in 1Q25 after increasing 11% YoY for full-year 2024, and is expected to record a peak year for railway investment. Apparent steel demand peaked at about 1.03 billion tons in 2020 and has declined about 3.9% annually over the subsequent five years. (da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |