China's industrial production rises in Jan-Nov'23, property investment falls

• Investments in infra, rail logistics rise y-o-y
  
  
• Real estate investment falls 9% y-o-y
  
  
• China may meet CY'23 GDP growth target
  
  

Morning Brief: The added value of Chinese businesses showed an increase over January-November, 2023, while investment in steel consuming sectors like infra and roads rose. Property sector investment, however, fell.

Industrial production rises: The added value of China's industrial enterprises above a designated size (annual income for main business above RMB 20 million or $2.8 million) rose by 4% y-o-y from January to November, 2023.

According to data from the National Bureau of Statistics (NBS), in November 2023, the added value of industrial companies above the designated size mentioned increased by 7% y-o-y. On a m-o-m basis, in November, the added value of industrial companies above the designated size upped a mere 0.87%.

Investments in fixed assets decline, rise in key steel-end-use sectors: NBS data further reveals, over January-November, 2023, the national fixed asset investment (excluding rural households) was RMB 46,081.4 billion ($6,454 billion), a y-o-y increase of 3%. Among them, manufacturing investment increased 6.3%, 0.1 percentage point faster than the growth rate seen over January to October, 2023. From a m-o-m perspective, fixed asset investment (excluding rural households) was up a marginal 0.26% in November.

From January to November, 2023 private fixed asset investment was RMB 23,526.7 billion ($3,293.58 billion), a y-o-y dip of 0.5%.

In terms of industries, investment in the primary industry in this period was RMB 964.7 billion ($135 billion), a y-o-y dip of 0.2%. Investment in the secondary industry was RMB 14,695.9 billion ($2,058 billion), up 9%. Investment in the tertiary industry was RMB 30,420.7 billion ($4,261 billion), an increase of 0.3%. In the secondary industry, industrial investment increased by 9% y-o-y within which investment in the mining industry increased 1%, and in sectors such as electricity, heat, gas and water, the same upped 24%. Meanwhile, automotive sales increased 11% y-o-y to 26.94 million units in January-November, 2023.

In the tertiary industry, investment in steel-consuming sectors rose y-o-y. For instance, infrastructure investment (excluding electricity, heat, gas and water production and supply industries) increased by 6% y-o-y. Among them, investment in the railway transportation industry increased by 21.5%. Investment in the water management industry increased by 5%, while that in the road transportation industry fell a marginal 0.2%. Investment in public facilities management industry decreased 2.5% y-o-y.

Real estate investment falls: China's national real estate development investment over January to November 2023, was at RMB 10,404.5 billion ($1,456.56 billion), a y-o-y decrease of 9%, within which, residential investment dropped 9% to RMB 7,885.2 billion ($1,103.87 billion).

In this period, housing construction area showed a y-o-y decrease of 7%. Among them, residential construction area decreased 8%. The area of newly-started housing construction decreased 21%. The completed housing area, however increased 18%. Within this, the completed residential area showed 18.5% growth.

From January to November, 2023, sales area of commercial housing declined 8% y-o-y, of which the residential sales area decreased 7%. Commercial housing sales were at RMB 10,531.8 billion ($1,474.38 billion), down 5%, of which residential sales dropped 4%. At the end of November, the area of commercial housing for sale increased 18% y-o-y. Among them, the residential area for sale increased 20%.

Over January to November, 2023, real estate development companies had RMB 11,704.4 billion ($1,638.53 billion) of funds in place, a y-o-y decrease of 13%. Among them, domestic loans were at RMB 1,422.7 billion ($199.16 billion), a decrease of 10%. Foreign capital utilization was RMB 4.2 billion ($0.58 billion), a decrease of 35%. Self-raised funds touched RMB 3,850.5 billion ($539.04 billion), a decrease of 20%. Deposits and advances received were at RMB 3,958.3 billion (554.13 billion), a decrease of 11%. Personal mortgage loans were RMB 1,998.2 billion ($279.73 billion), down 8%.

Outlook

China may be able to meet this year's GDP target of 5% with a modest growth of 4.4% in Q4. If macro global indicators turn positive next year, this may signal global demand revival. China too will stand to benefit in such a scenario.

2nd India Steel and Metal Conference: Keeping above dynamics in mind, SteelMint, along with the Steel Users Federation of India, will be organizing the 2nd India Steel and Metal Conference: Supply Chain & Sourcing Strategies, over 10-11 January, 2024 in Mumbai. Several key sessions will explore the current challenges and enablers. Experts will also try to read future trends.

Particularly, a session on "Evolving trade dynamics in a fast-changing global steel market", will turn the spotlight on the Chinese property sector challenges.

This is the only conference focusing on steel end-user industries and their issues. It will be followed by the glittering SUFI Steel Awards, 2023. Register fast.