Construction sector

The total area of ​​sold commercial real estate decreased by 20.5% y/y

In January-February 2024, total investment in real estate in China decreased by 9% y/y – to 1.18 trillion yuan ($0.17 trillion). This is reported by SteelOrbis with reference to the data of the National Bureau of Statistics of the country.

In the period under review, the total area of commercial real estate sold amounted to 113.7 million square meters, down 20.5% y/y.

The new area covered by construction activity in January-February decreased by 29.7% y/y.

According to Reuters, official real estate data show that the sector is trying to stabilize. House prices in February fell by 0.3% m/m, which corresponds to their fall in January.

Hwabao Trust economist Ni Wen believes that real estate remains in a downward trend, and a slight slowdown in investment is unlikely to change the situation, as developers are still struggling for cash flow. However, in his opinion, the stage when real estate had the greatest negative impact on the economy should have ended, and it remains to be seen when the sector will reach the bottom.

As GMK Center reported earlier, Chinese steel associations are calling for a curb on steel production to curb the rapid decline in rolled steel prices that has been observed recently due to lower-than-expected demand and weak margins at mills along with high inventories. In particular, on March 7, Yunnan province issued a plan according to which local steelmakers are to reduce production of construction steel by 500 thousand tons per month (over 40% of average monthly production).