LME Week: Chinese infrastructure to accelerate in H2 2018, SMM says

Published: Oct 9, 2018 13:38
Infrastructure construction will grow as Beijing has been loosening policies in the face of potential impact from the trade war

London, Oct 8 (SMM) – Infrastructure construction in China will accelerate in the second half of the year as Beijing has been loosening policies in the face of potential impact from the trade war, said SMM general manager, Ian Roper.

Speaking to delegates at the LME week in London on Monday October 8, he said that infrastructure investment was cut at the beginning of the year. But that "the Chinese government is clearly accelerating infrastructure spending in response to trade concerns" and that "financial tightening has clearly reversed amid trade pressures". This is likely to boost fixed asset investment (FAI) in the second half of the year.

"Financial conditions clearly eased in April however, and new lending has recovered somewhat, which bodes well for metals demand growth into year end," Roper said.

Policy has eased selectively, as Chinese President Xi Jinping is determined to introduce risk into the financial system, SHIBOR fell by 200 basis points. This reflected that liquidity conditions are much easier and thus supportive to growth

China will increase export tax rebates from November 1 and quicken export tax rebate payments to support foreign trade, the cabinet said on Monday. Officials also said that local governments will step up special bond issuance for shanty-town redevelopment.

Over the weekend, China's central bank announced a steep cut in the amount of cash that banks must hold as reserves, marking the fourth such cut this year. This move, effective from October 15, will inject 750 billion yuan ($109.2 billion) into the banking system with the cut, by releasing 1.2 trillion yuan in liquidity, with 450 billion yuan of that to offset maturing medium-term lending facility (MLF) loans.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn
For more information on how to access our research reports, please contact:service.en@smm.cn
Related News
Economic Improvement of the Boumadine Polymetallic Mine in Morocco
9 hours ago
Economic Improvement of the Boumadine Polymetallic Mine in Morocco
Read More
Economic Improvement of the Boumadine Polymetallic Mine in Morocco
Economic Improvement of the Boumadine Polymetallic Mine in Morocco
9 hours ago
Greenland Mines Completes 104.8-Tonne Bulk Sampling Programme at Skaergaard PGM Project
12 hours ago
Greenland Mines Completes 104.8-Tonne Bulk Sampling Programme at Skaergaard PGM Project
Read More
Greenland Mines Completes 104.8-Tonne Bulk Sampling Programme at Skaergaard PGM Project
Greenland Mines Completes 104.8-Tonne Bulk Sampling Programme at Skaergaard PGM Project
[SMM Flash] Greenland Mines has completed a 104.8-tonne bulk-sampling programme across seven sites at its Skaergaard palladium-platinum-gold project in East Greenland. The samples are being prepared for large-scale and pilot-scale metallurgical testwork at GTK Mintec in Finland, while the company continues engineering, processing, infrastructure and waste-management studies aimed at advancing the project's technical evaluation. Skaergaard's S-K 1300 resource currently comprises approximately 15.0 million oz PdEq Indicated and 17.49 million oz PdEq Inferred, according to Greenland Mines. The bulk-testing programme represents an important step in evaluating processing and recovery options for one of the larger undeveloped palladium-platinum-gold systems outside the major South African, Zimbabwean and Russian supply regions. However, the reported Mineral Resources are not Mineral Reserves and the latest programme does not constitute a development or commercial production decision.
12 hours ago
Two Rivers Advances Validation Work for Merensky Project, Potential Output at 182,000 6E oz/year
12 hours ago
Two Rivers Advances Validation Work for Merensky Project, Potential Output at 182,000 6E oz/year
Read More
Two Rivers Advances Validation Work for Merensky Project, Potential Output at 182,000 6E oz/year
Two Rivers Advances Validation Work for Merensky Project, Potential Output at 182,000 6E oz/year
[SMM Flash] Two Rivers, the South African PGM joint venture between African Rainbow Minerals and Impala Platinum, is advancing technical validation work for its Merensky project on the eastern limb of the Bushveld Complex. Early-works capital was approved during FY2026 to complete studies required to determine the project's way forward. The Merensky concentrator was commissioned during the six months to December 2024 but was subsequently placed on care and maintenance amid challenging PGM market conditions. The project has a stated capital cost of approximately R7.3 billion and is designed to produce around 182,000 6E PGM oz/year at steady state, alongside approximately 1,600 tonnes/year of nickel and 1,300 tonnes/year of copper. A restart could therefore provide meaningful incremental PGM supply from an existing South African operation. However, the project remains under technical validation and no restart date or final decision to resume production has been announced.
12 hours ago
LME Week: Chinese infrastructure to accelerate in H2 2018, SMM says - Shanghai Metals Market (SMM)