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China Steel Demand Indicators: Is Cooling in the Offing?

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China’s property sector: Cooling ahead?

After one-off March data, April data for China’s real estate sector again pointed to a continued slowdown. Real estate investments rose 10.2% YoY (year-over-year) in April compared to 10.8% in March. According to Reuters, in the first four months of the year, growth slowed down to 10.3% from 10.4% in the first quarter.

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Sales and construction starts decelerate

In April, property market sales fell 4.1% YoY in April, marking their worst monthly performance since October 2017. In comparison, they grew 32% YoY in March. Floor area for new construction starts increased 2.9% YoY, a sharp deceleration from 17.8% in March.

Slowing lending and tighter property market controls might be behind this slowdown.

A crackdown by Chinese authorities on the property market could mean a tougher road ahead for iron ore miners (XME). Vale (VALE), the world’s largest iron ore producer, is based in Brazil. BHP (BHP) (BBL), Rio Tinto (RIO), and Cleveland-Cliffs (CLF) have major seaborne operations in Australia.

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