China Metals Report Q1 2013 - New Study Released

Recently published research from Business Monitor International, "China Metals Report Q1 2013", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 30 January 2013

China Metals

From 2012 to 2017 the metals industry in China will be facing a period of steady decline in demand and supply growth. On the demand side, we are expecting a sharp slowdown in Chinese fixed asset investment that will see a softening in demand across all industrial metals. We expect construction activity in China to moderate significantly in the coming quarters despite a temporary boost from infrastructure stimulus packages. We forecast Chinese real GDP growth of 7.7% in 2012 and 7.1% in 2013, compared to Bloomberg consensus forecasts of 8.2% and 8.4%, respectively. The boom years of Chinese investmentled growth are over and this will seriously undermine growth of China's metals industry, particularly steel and aluminium.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/529316_china_metals_report_q1_2013.aspx?afid=201) (http://www.fastmr.com/prod/529316_china_metals_report_q1_2013.aspx?afid=201)

Government plans to significantly consolidate the metals and mining industries will be watered down in the coming months due to a continued slowdown in the country's economy. In order to cushion the negative impact on social welfare and stability of slower growth, central government will support lossmaking state industries as a form of social subsidy.

To highlight, China's Ministry of Industry and Information Technology recently submitted a plan to ease the tax bill on iron-ore mining companies after several months of declining output following the steady slump in prices. Nonetheless, consolidation will eventually occur due to weaker metals prices and a reorientation of China's economy away from fixed asset investment and towards private consumption. Lower prices will squeeze margins and force smaller, inefficient producers out of business. State-owned companies already have a dominant role in the mining and metals industry and will have an even larger share of the economic pie by 2017.

Despite slowing consumption growth, China will retain structural deficit for key metals such as iron ore, copper and nickel. Imports of metal to the country will continue to grow, albeit at a far slower rate than over the last 10 years. As such, overseas acquisitions of foreign mining assets will continue to be a trend.

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