Pacific Investment Management Co (PIMCO) sees little growth potential for steel demand in China as the housing market slows, hurting the outlook for the global industry and iron ore prices. Goldman Sachs Group Inc said output would drop.
“The years of huge growth in China’s housing development market are over, spelling tough times over the long-term horizon for global steelmaking,” Asian credit research head Raja Mukherji and analyst Emily Au-yeung wrote in an e-mailed report received yesterday.
At best, steel demand in the nation might expand in the low single digits this year, they wrote.
China grew at its weakest pace since 1990 last year and is set to slow further this year.
Asia’s largest economy accounts for about half of global steel output and is the biggest buyer of seaborne iron ore, which fell to the lowest price since 2008 this week amid a global glut.
Goldman Sachs yesterday forecast in a report that China’s steel production would contract this year, repeating its outlook, while UBS Group AG predicted earlier this week the first drop since the early 1980s.
“The outlook for China’s steel demand is not expected to improve this year,” Commonwealth Bank of Australia Singapore-based economist Andy Ji said. Given the persistent oversupply in housing, a strong recovery is unlikely, he said.
Steel output in China will shrink this year as demand has peaked, China and Iron Steel Association deputy secretary-general Li Xinchuang (李新創) said at a conference in Perth, Australia, on Wednesday, predicting a decline to 814 million tonnes from 823 million tonnes last year. PIMCO’s analysts did not give production or demand forecasts in figures.
“We expect downside risks to steel demand to continue to materialize, as past housing construction growth rates are unsustainable,” the analysts wrote in the report from the Newport Beach, California-based money manager. “While there are other end users of steel — including machinery, autos and white goods — they are unlikely to propel China’s steel demand.”
While China built enough housing from 2000 to last year to accommodate 42 percent of its population, that pace of expansion is unlikely to continue, according to PIMCO, which also forecast slower growth in infrastructure spending.
The sectors accounted for as much as 60 percent of steel demand in 2013, it said.
Separately, China plans to lift restrictions on foreign companies taking over domestic steelmakers starting on April 10, the National Development and Reform Commission said in a statement posted on its Web site yesterday.
The ban on foreign control in the steel industry has been in place since 2005.
The commission, the nation’s top economic planning agency, called for public comment on a draft of the new foreign investment guidelines, including industries suffering from overcapacity, such as steel and ethylene production, in November last year.
Yesterday’s move might have come too late, Custeel.com Beijing-based analyst Hu Yanping (胡燕萍) said.
“I don’t think this policy change would prove very attractive for foreign investors, as China’s steel industry has passed its golden years and has many problems to solve,” she said by telephone. “The nation’s steel companies are also quite expensive to buy.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained