China’s policy settings for 2024, released in the Government Work Report on 5 March, disappointed markets. Although the government will continue to expand fiscal support for the economy, targets were viewed as too conservative to engineer a strong rebound, especially for traditional steel-intensive sectors. This suggests that China will not buck a global slowdown in steel markets this year. Fundamentals for key steelmaking raw materials suggest falling prices this year, and if production costs fall, weak demand suggests steel prices will also drop.

The “Two Sessions” in Beijing, which started on 4 March, are typically the first major public forum of the year to announce any major new policies. Considering the weak economy however, the main focus has been on the Government Work Report and its key economic targets. These signal support for the economy, but continued restraint on the growth of credit.

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