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Kallanish Kallanish

Knowledge matters Knowledge matters

August, 4th 2020

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CSI: China’s stimulus needs a steady hand (Aug. 1, 2018)

As China faces down its economic slowdown and a trade war with the USA, all eyes are on its fiscal policy for any sign of stimulus. There is potential for an extreme reaction – either large-scale stimulus or inaction – to skew steel markets significantly in H2. In this issue however we explain why we think piecemeal reaction should make for a strong H2, albeit allowing for some volatility. That is based on the state of the market as it comes out of the summer period and enters the demand recovery in autumn. It is also worth noting that individual end use sectors remain largely firm, despite the concern among macroeconomists. Chinese policy remains as essentially unpredictable as ever because it is not in any way transparent. So far however there is little sign of any knee-jerk reactions.