Slowdown in growth of China's credit affects driving force of steel demand in peak season
Time:Tue, 15 Mar 2022 09:40:19 +0800
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According to China's major financial data in February 2022, the year-on-year growth rate of M1 (narrow money) rebounded, while the year-on-year growth rate of M2 (broad money) declined slightly.
In February, the amount of new RMB loans and the scale of social financing decreased significantly, which indicated that China’s domestic monetary policy would be focused on economic goals.
In 2022, China will invest in infrastructure moderately ahead of schedule. The central government has allocated RMB 640 billion, mainly in water conservancy projects, gas pipeline renovation, and energy infrastructure.
At the same time, China’s government planned to arrange local government special bonds of RMB 3.65 trillion this year, mainly for follow-up financing of projects, rural construction, and urban renewal projects.
However, some projects are affected by the poor availability of funds, and the actual start of construction may be lower than expected, which also slows down the release of steel demand in the traditional peak season.
