| What Does This Year Hold For The Chinese Real Estate Market? | |
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Steel Plays: Key Global Indicators Investors Should Track (Part 10 of 13) (Continued from Part 9) Chinese real estate market
China accounts for almost half of the global steel consumption. In China, the infrastructure sector is the largest steel consumer. It accounts for 50% of the steel consumption in China. This makes the Chinese real estate market a key driver of global commodity markets.
A slowdown in the Chinese real estate market negatively impacted all of the major commodities—like steel, aluminum, and copper. Now, we’ll analyze the latest trends in the Chinese real estate market.
Building sales
The above chart shows the year-over-year, or YoY, growth in building sales in China. Building sales increased by 2.89% on a YoY basis. This came after sales declined for nine consecutive months. However, investors should watch the real estate market. One month of growth doesn’t imply a trend reversal.
Chinese real estate data isn’t reported for January. Investors will have to wait for some time before February’s data is released.
Banking regulations
China reduced its benchmark interest rates. This is the first rate cut in China after nearly two years. It’s expected to boost China’s real estate industry. A slowdown in real estate market has a spiral effect on Chinese economy. China might provide more stimulus and rate cuts this year to boost its real estate sector.
Any improvement in the Chinese real estate market is positive for the global steel industry. This would lead to higher steel consumption in China. Steel companies—like ArcelorMittal (MT), U.S. Steel Corp. (X), Steel Dynamics (STLD), and Nucor (NUE)—would benefit from this. Currently, Nucor forms 2.52% of the Materials Select Sector SPDR ETF (XLB).
The automobile sector is the second biggest steel consumer in China. In the next part of this series, we’ll analyze the trends in the Chinese automobile industry.
Continue to Part 11 Browse this series on Market Realist:
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United States Steel Corporation
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CODE : X |
ISIN : US9129091081 |
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United States Steel est une société de production minière de fer et de étain basée aux Etats-Unis D'Amerique. United States Steel est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 6,4 milliards US$ (5,7 milliards €). La valeur de son action a atteint son plus bas niveau récent le 28 mars 2003 à 10,01 US$, et son plus haut niveau récent le 30 novembre 2007 à 98,85 US$. United States Steel possède 176 184 431 actions en circulation. |