Lower demand: Workers check on seamless steel pipes at a factory of a steel products manufacturer in Cangzhou, China. AmInvestment says production cut in China will be matched by a corresponding decline in consumption in the country.— Reuters
PETALING JAYA: The cutback in public infrastructure spending, coupled with the sustained weakness in the property sector, will have a direct knock-on effect on the demand and hence prices for steel and cement, says AmInvestment Research which has downgraded the building materials sector recommendation to “underweight” from ‘neutral’.
It said that locally, for the steel sector it does not see a lift from China as a production cut will be matched by a corresponding decline in consumption in China. Meanwhile, the demand-supply dynamics for aluminium appears to be even weaker than steel with production in China expected to outstrip demand, it said in its sectoral report.
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