Fitch Foresees Robust Metal Demand Driven by Boosted Infrastructure Plan

SEATTLE (Scrap Monster): Fitch Solutions, in its latest report, said that the acceleration of the new infrastructure plan by the Chinese administration is likely to boost production of high-end metals, as opposed to primary metals.

According to Fitch, the Chinese infrastructure plan, along with other industrial policies such as Made in China 2025 and China Standards 2035 Plan, is likely to boost metal demand. The plan suggests extensive construction projects, which require substantial amount of metals, especially lighter and more advanced metals.

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The analyst firm foresees strong boost for domestic demand for high-end copper, aluminium and steel in China. The new infrastructure projects are expected to consume approximately 1 million tonnes of high-end aluminum and 32 million tonnes of specialty steel during the current year. The consumption is likely to increase further in 2021 and 2022, as more construction projects get underway.

The Chinese state-owned enterprises (SOEs) are likely to benefit significantly from the acceleration of the new infrastructure plan. The government has already announced its intention to increase the market dominance of metal SOEs further, by tapping into increased demand from new infrastructure projects.