August 2012 | Steel Tracker
Chinese city pumps $130bn stimulus, boost for steel demand: International Long Product Market Analysis
Increased construction activity will help reduce structural steel inventory levels which have been trending at seasonally high levels over the past few months.
Government officials in the capital city in Hunan province, Changsha, have announced an Rmb 829bn ($130bn) stimulus programme in a bid to boost the local economy. The programme is an attempt to kick start heavy industry and construction which are key contributors to economic growth accounting for over half of Chinese steel demand.
The government of Changsha stated that the funds would be spent on 195 projects, with key developments in urban infrastructure, airports, roads and energy facilities.
Key economic cities in China are coming under increasing pressure from the slowing Chinese GDP growth forecasts and many are sceptical that the programme is even plausible.
Financing remains a tentative issue in China and developers will look primarily to banks...
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