China bigger rail investment may boost zinc and steel demand
Reuters reported that China's refined zinc consumption is set to rise for the rest of 2013, buoyed by Beijing's plan to boost rail investment as well as seasonal demand, aiding embattled domestic producers and keeping zinc imports at strong levels.
China's domestic demand growth for zinc has moderated so far this year, analysts and sources at smelters said, hurt by the country's economic slowdown and Beijing's efforts to rein in the property sector.
Domestic spot zinc prices have been stuck well below the highs of 2010 and 2011, but remain above international levels as some large smelters have cut sales to prop up the market, prompting strong levels of imports for financing deals.
Pro-growth policies outlined in recent weeks to support the economy, including infrastructure projects and rail investment, have helped support metals, with steel prices up 25 percent since late May.
The government would step up rail investment and aims to exceed its 2013 investment plan, a report on the government website (www.gov.cn) said on Monday, confirming earlier reports of increased investment.
If the target is achieved, rail investment would rise to CNY 343 billion (USD 56 billion) in the second half of the year, from CNY 187 billion in the first half, Nomura said in a report on Monday.
Source - Reuters