SHANGHAI, Nov. 14 (SMM) -- In March 2011, China’s State Council clearly required to construct 10 million units of new affordable housing in 2011 and ordered the construction to be started in November. The Ministry of Housing and Urban-Rural Development began to publish the affordable housing starts regularly from 1Q, and announced on November 10th that the urban affordable housing starts in 2011 have exceeded 10 million units, ahead of schedule to achieve the goal set at the beginning of 2011.
The operating rate of affordable housing was only 10.8% in 1Q, but soared in 2Q and 3Q, with the construction of nearly 90% of affordable housing commencing in these two quarters. Media and industry insiders have questioned such a rapid operating rate, with some local governments considering the activity of just digging a hole for the foundation as a housing start.
The Ministry of Housing and Urban-Rural Development reiterated the standards for affordable housing starts, and neither the activity of only building protection facilities on the construction site not the activity of only digging a hole for the foundation can be considered as the housing start. Steelease believes this news has some positive effects on rebar demand, but the construction of some projects will stop successively as the weather turns colder, combined with limited steel consumption by the construction of the foundation, Steelease believes demand for rebar will not increase significantly.