China’s Politburo meeting at the end of July has set the tone for economic policy in the second half of the year. It ruled out stronger large-scale stimulus, although some policy support will be necessary just to keep the economy ticking over. Hopes of another boom, like that seen after the first wave of Covid, seem unfounded.

There are some important policies which could help to support steel demand however, including in real estate and consumer goods. Production cutbacks meanwhile are also increasing. So far, these are mainly market driven but policy-led shutdowns are also coming down the line. The balance could be a modest recovery in mill profits despite continuing weak demand. Limited stimulus and economic crisis however mean we need to revise lower our demand forecasts from the start of the year.