China’s Property Crisis Threatens to Drag Down Steel Industry
- Beijing reluctant to spend its way out of real-estate troubles
- Goldman sees steel demand heading for 5% decline this year
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China’s steel industry is entering a precarious new era as a worsening property crisis imperils demand and Beijing’s construction-led growth model looks increasingly untenable.
Almost a third of China’s steel mills could go into bankruptcy in a squeeze that’s likely to last five years, Li Ganpo, founder and chairman of Hebei Jingye Steel Group, warned at a private company meeting in June. “The whole sector is losing money and I can’t see a turning point for now,” he said, according to a transcript of the gathering seen by Bloomberg News.