We’ll remember 2016 as the year in which steel prices bottomed out thanks to higher-than-expected demand in China.
China, once again, increased infrastructure and property construction spending. As a result, steel prices rose.
China’s primary growth engine — and, therefore, that of industrial metals demand — was fired up one more time. Some people might think that what drove steel prices this year was the imposition of higher trade barriers. While that did help prices, the real driver sustaining the rising trend in steel prices was the aforementioned higher-than-expected demand in China.
Many analysts expect the country’s demand growth rates to slow down this year. Some Chinese cities have tightened their home purchasing rules to prevent their property markets from overheating. Also, China’s car sales could lose momentum if China doesn’t extend the tax break for small cars in 2017.