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Fitch Ratings, an American credit rating agency, anticipates a resurgence in steel, cement, and aluminium production in China during the warmer months of the second quarter of 2024, driven by heightened construction activity. Steel and aluminium output are expected to witness significant upticks, buoyed by improved margins, while cement production is projected to see a more moderate increase.

In the first quarter of 2024, China experienced a 2% year-on-year decline in crude steel production due to weak margins and seasonal demand lulls. However, steel producers witnessed margin recoveries in March as raw material costs began to decline. Meanwhile, aluminium production maintained resilience with a year-on-year increase in the first quarter of 2024, fueled by robust demand from the manufacturing sector.

Despite a 16% year-on-year drop in cement output in the first quarter, industry margins remained weak, reflecting ongoing challenges stemming from declining property investment. Nevertheless, the sector saw some relief as raw material costs decreased.