The direction of “steel demands” under the new economic target

The government work report in 2019 pointed out that the Chinese economy should adhere to the general tone of seek improvement in stability work, continue to promote the implementation of the “six stability” policy and boost market confidence, so that the GDP maintained in a reasonable range of 6-6.5% operation. All these policy will speed up the demands of construction material like China hollow section tube.

First, real estate investment remains resilient
In 2019, government will better solve the problem of people’s housing, promote steady and healthy development of the real estate market, and continue to build low-income housing and renovate rundown urban areas, according to the work report of the new government. In 2019, the main tone of the property market regulation is still “adhere to the residential property of housing”. In the short term, government will adhere to the expectation of stable land price, stable housing price, and in the long term, government will intensify efforts to promote the construction of a long-term mechanism for the healthy development of the real estate market. Steel pipe manufacturers will benefit from this policy. Statistics show that in February 2019, the total transaction volume of 29 key cities across the country was 9.6 million square meters, down 28 percent year-on-year. In 2019, the overall downward trend of the real estate industry will remain unchanged, and the growth rate of investment in the real estate industry will maintain a certain degree of resilience.Real estate investment is expected to maintain rapid growth in the first quarter, but the number of new projects may fall. Steel pipe market for rectangular hollow section is quite stable.

Second, Infrastructure investment gradually recovered
According to the new government work report, in 2019, government will accelerate the implementation of a number of key projects and complete 800 billion yuan of railway investment, 1.8 trillion yuan of highway and water transport investment. At present, the domestic infrastructure investment has shown obvious signs of recovery, and the investment in roads and waterways has maintained a sustained recovery. Among them, the investment in roads and waterways in the central region has increased by more than 60% year on year. According to statistics from the national development and reform commission, in January 2019, investment in roads and waterways reached 128.22 billion yuan, up 9.2% year on year. It is expected that infrastructure investment will maintain a medium-speed growth in 2019. Above all, steel pipe companies will continue to expand effective investment in 2019.