China’s key construction machinery sales jumped in the first half, indicating improving demand across the economically crucial sector.
Domestic excavator sales, which usually ramp up as builders prepare for projects, climbed almost 23 per cent from a year earlier during the January-June period, data compiled by the China Construction Machinery Association showed. The equipment is a key barometer of activity in the construction industry and can serve as a proxy for steel demand.
The latest figures indicate that China’s construction sector is gradually steadying following the government’s stimulus measures, after years of disruption from the prolonged property crisis. A slump in housing construction has been the main drag on the excavator sector, as well as on demand for steel and related industries.
Rebar and hot-rolled coil futures on the Shanghai exchange advanced, while iron ore, a key steelmaking ingredient, climbed as much as 2.3 per cent to US$98.25 a ton. Yuan-priced iron ore contracts in Dalian headed towards their highest close since April.
Still, China’s economy has been sending mixed signals, according to analysts at XP Research. “While investment in manufacturing and infrastructure was strong, property sector data weakened again, with declines in starts, sales and completions,” they said in a research note, referring to May government data.
In the steel market, prices for reinforcement bar – or rebar – traded not far from the lowest level since 2017, a sign that steelmakers continued to grapple with falling domestic demand. Local consumption is forecast to fall 2 per cent in 2025 to 839 million tons, on track for a fifth straight year of declines.