China: order and growth
Following a drop in apparent cement consumption in 2015, China’s cement industry has been destocking ever since. As a result, the country’s cement market has started 2017 on a positive note with cement inventories reported to be decreasing. This resilience is supported by improved producer discipline, increased cooperation between top players and robust government investment in infrastructure and housing. By Addison Dai, DBS Vickers, Hong Kong.
China’s manufacturing purchasing managers index (PMI) started 2017 on a resilient note. The official factory gauge was 51.3 in January 2017, which has been maintained above the 50 boom-bust line since August 2016. China registered 6.7 per cent GDP growth in 2016, which accelerated to 6.8 per cent in the last quarter, fuelled by profitability improvement of industrial producers.
Last year, Chinese apparent cement consumption increased by around 2.5 per cent from 2.35Bnt to 2.41Bnt (see Table 1), mainly driven by expansion in infrastructure construction.