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
Platinum & Palladium Compounds Weekly: Faster Spot Deliveries, Modest Domestic Auto Recovery
2 hours ago
Platinum & Palladium Compounds Weekly: Faster Spot Deliveries, Modest Domestic Auto Recovery
Read More
Platinum & Palladium Compounds Weekly: Faster Spot Deliveries, Modest Domestic Auto Recovery
Platinum & Palladium Compounds Weekly: Faster Spot Deliveries, Modest Domestic Auto Recovery
2 hours ago
Fed Unanimously Votes for Rate Hike, Precious Metals Face Downward Pressure
2 hours ago
Fed Unanimously Votes for Rate Hike, Precious Metals Face Downward Pressure
Read More
Fed Unanimously Votes for Rate Hike, Precious Metals Face Downward Pressure
Fed Unanimously Votes for Rate Hike, Precious Metals Face Downward Pressure
**SMM News, September 17:** Overnight, Federal Reserve members voted unanimously in favor of an interest rate hike, a rare outcome, and further consecutive rate hikes remain possible. Precious metals have been under sustained downward pressure on the back of the rate hike news, triggering a sudden pullback in rhodium prices following their earlier rally. Some market participants noted that selling liquidity has dried up markedly over the past two days, and forced liquidation at lower prices has caused rhodium to fall sharply.
2 hours ago
Bravo Mining Reports Thick PGM-Nickel Intersections at Luanga Project in Brazil
3 hours ago
Bravo Mining Reports Thick PGM-Nickel Intersections at Luanga Project in Brazil
Read More
Bravo Mining Reports Thick PGM-Nickel Intersections at Luanga Project in Brazil
Bravo Mining Reports Thick PGM-Nickel Intersections at Luanga Project in Brazil
[SMM Flash] Bravo Mining has reported further infill and step-out drilling results from its 100%-owned Luanga palladium-platinum-rhodium-gold-nickel project in Pará, Brazil. Results from the Central Sector included 53.85 m at 2.83 g/t PGM+Au and 0.16% Ni, including 5.01 m at 10.68 g/t PGM+Au and 0.40% Ni. Other intersections included 39.75 m at 3.02 g/t PGM+Au and 0.32% Ni and 52.45 m at 2.06 g/t PGM+Au and 0.11% Ni. Bravo said the latest drilling demonstrates mineralisation continuity at depth and provides potential to expand and upgrade the existing Luanga resource. Results from the ongoing programme are expected to support an updated Mineral Resource Estimate targeted for Q1 2027. Luanga's combination of palladium, platinum, rhodium and nickel makes the project relevant to geographical diversification of future PGM supply. However, the latest results are exploration intersections and do not constitute Mineral Reserves or future production guidance.
3 hours ago