A staff member lifts finished steel coil at a special steel company in Xinfeng Town of Nanhu District, Jiaxing, east China's Zhejiang Province, Jan. 26, 2023. Many companies in Nanhu District of Jiaxing have sped up production during the Spring Festival holiday to ensure delivery of orders, while offering cash gifts and other rewards for employees. Photo: Xinhua

Prices of raw material used for construction eyed a significant increase in the first two months this year. Experts attribute this surge to the rebound of China's industrial activities, as the country accelerates its economic recovery.

According to the China Securities Journal, cement prices in several Chinese cities rose by 30 to 50 yuan per ton, and cement producers' shipments increased gradually. On the demand side, the national cement market is steadily picking up as new projects started construction in March. Cement prices are expected to fluctuate between 430 yuan and 460 yuan per ton in mid-March.

In addition to cement, steel prices also rose due to expanded internal and external demand. As of Wednesday, the national steel price reached 4,655 yuan per ton, up 6.8 percent compared to December 30 last year, according to the market monitoring data of Lange Steel.

Wu Chenhui, an independent industry analyst who follows the steel industry, stated that as the country's macroeconomic situation warmed up in January and February, reflected by the accelerated infrastructure construction across the country and rising related investment, the steel prices surged due to surging demand resulting from active industrial activities.

According to data released by the National Bureau of Statistics, in the first two months of this year, the total value added of industrial enterprises above the designated size grew by 2.4 percent year-on-year, or 1.1 percentage points faster than that of December 2022, reflecting the accelerated recovery of industrial production and improved business expectations.

During the period, the country’s fixed-asset grew steadily by 5.5 percent year-on-year to reach 5.36 trillion yuan. Industrial investment increased by 10.0 percent year-on-year, and infrastructure investment rose 9.0 percent, with a strong rebound.

With the overall macroeconomic stabilization and rebound, the steel market is poised for an increase in demand, production, and prices. However, as the external demand environment is complex and volatile this year, uncertainties have increased, especially with the recent collapse of some US banks that triggered spillover risks. Therefore, China's steel exports will face several constraints, and the steel market must remain cautious, said Chen Kexin, chief analyst of Lange Steel Economic Research Center.

The excavator industry has also witnessed China's economic recovery. An employee with SANY Group stated on Wednesday that although the company's business has not yet reflected in the order increase, according to the machinery utilization rate, this year's business has recovered. 

“We predict that domestic sales will remain resilient this year, but the performance in the international market will be even more optimistic, given the strong competitiveness of our products in the global market,” the person said, predicting that company’s sales in the global market this year will reach about 50 billion yuan compared with around 40 billion last year, with the main demand comes from Southeast Asia and developed countries in Europe and the US.