BEIJING : Debt problems at a major Chinese property developer have now spilled over into a vital artery of the nation's industrial engine - the steel sector - and started to ripple through to other critical parts of the world's second-largest economy.
Hitting steel operations, real estate developers have dialled back investment in projects to conserve cash in a sector squeezed by tighter borrowing regulations that have engulfed indebted companies, most notably China Evergrande Group. Demand for homes is expected to ease further in 2022, hitting downstream manufacturers of household products.
New construction starts by floor area have contracted from a year earlier since July - their longest stretch of declines since 2015. As steel producers hit the brakes, the key inputs used in steelmaking have also taken a shellacking, with Dalian Commodity Exchange iron ore futures down more than 45per cent from their record in May.UNCERTAIN OUTLOOK
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Source: ChannelNewsAsia - 🏆 6. / 66 Read more »