With the Chinese economy on course for a continued slowdown over the coming years, we expect China's metals industry to come under pressure. The rebalancing of the Chinese economy away from fixed-asset investment and towards private consumption will significantly dampen appetite for construction-related materials. In particular, metals such as steel and refined nickel will be adversely affected due to their heavy usage in the construction sector.
We forecast China's real GDP growth to average 6.1% between 2014 and 2018, compared with an impressive average growth rate of 10.1% per annum over the past decade. In our view, attempts by the Chinese government to arrest the structural slowdown in the country's economy will only cushion the impact of an economic slowdown, rather than revive a growth upturn. Nonetheless, China will retain a structural deficit for key metals such as iron ore, copper and nickel despite slowing consumption growth. This should sustain the push for outbound mining investment by Chinese firms.
Government plans to significantly consolidate the metals and mining industry will continue to gain traction in the coming quarters. Consolidation of the metals' industry will be driven by the slump in profit margins, tightening of credit lending and stricter regulations aimed at curbing environmental pollution in heavy industry. State-owned companies, which already enjoyed a dominant role in the mining and metals industry, will emerge to be even more prominent after the consolidation.
The China Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in China.
BMI's China Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in China.Key Benefits
CoverageBMI Industry View
- Benchmark BMI's independent metals industry forecasts for China to test other views - a key input for successful budgeting and strategic business planning in the China metals market.
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Summary of BMI's key forecasts and industry analysis, covering metals production and prices, plus analysis of landmark company developments and key changes in the regulatory environment.SWOT Analysis
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the state's metals sector, business environment, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.Global Metals Market Overview
Global demand, supply and price forecasts for steel and aluminium, as well as gold, copper and tin, drawing on both our industry expertise and our macroeconomic and financial market team's long-term global demand forecasts and shorter-term market views.Industry Forecasts
Historic data series and forecasts to end-2018 for all key industry indicators (see list below) supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
Production (`000 tonnes, US$bn), consumption (`000 tonnes, US$bn), exports (`000 tonnes, US$bn); prices (US$/tonne), and growth (%).Macroeconomic Forecasts
BMI forecasts to end-2018 for headline country macroeconomic indicators, including real GDP growth (%), GDP per capita (US$), population (mn), industrial production index (% y-o-y average) and unemployment (% of labour force).
BMI View: China's metals industry is set to face a protracted period of slowing growth as the country's rebala ncing process begins in earnest. Companies operating in se ctors that are tied heavily to the construction industry will take the brunt of weakness from the sharp slowdown in fixed asset investment.