Steel price in China is skyrocketing after a long fall

The sharp drop in the first quarter and the slowdown in GDP growth to 7.3% from an annual target of 7.5% is the result of China's reckless growth of past years. The decline in infrastructure investment projects affected the steel market.

Steel prices escalated in April, up 2%, while cornered long products rose 3%. On the Shanghai Stock Exchange, steel rebar futures reached a one-month high on Tuesday. Investors are driving up prices after the holiday weekend amid optimism about demand from Chinese firms after a prolonged fall in inventories since early March.

Some of the reasons for the change in the market situation were: 1. The drop in traders' inventories by 2 million tons over the past five weeks. 2. Stocks of major steel products fell to 18.67 million tons from 19.27 million tons the previous week. 3. Inventories of rebar and products for steel structures totaled 9.34 million tonnes last week, up from 10.42 million tonnes at the end of February. 4. Stocks at Chinese factories in the country have depleted by 9.5% in the last ten days of March.

Beijing is rapidly increasing spending on rail projects in poorer regions of the country, as well as cutting taxes on small businesses in an effort to support them amid a slowdown in the economy.

It is planned to build at least 6,600 km of railway lines this year at a cost of $ 24 billion, which is 1,000 km more than last year. In 2014, infrastructure investments will total $ 116 billion, up $ 3.2 billion from the initial amount announced earlier this year.