China’s steel market is not collapsing despite the property downturn. Instead, demand is stabilising at a lower level as manufacturing, exports and new energy sectors gradually replace construction-driven demand. This is not a demand collapse, it’s a structural shift from property to industrial and export-driven demand. What’s Really Happening The sharp drop in construction activity has clearly hurt steel demand: Property-related steel (like rebar) has fallen significantly Construction’s share of demand is shrinking But the broader market tells a different story: Total steel demand is only slightly below past peaks Manufacturing, shipbuilding and energy transition sectors are absorbing demand Exports are acting as a key buffer Instead of a sudden crash, the industry is entering a long plateau . Why This Matters The market had expected a sharp collapse but reality is more gradual: Demand is declining slowly, not falling off a cliff China is shifting from construction-led growth to ...
Emerging Asian equities advanced on Wednesday, led by strong gains in South Korea and Taiwan’s technology sectors, as easing oil prices and optimism around artificial intelligence (AI) helped improve investor sentiment ahead of the US Federal Reserve’s policy decision.
Tech Stocks Drive Regional Gains
Markets in South Korea surged up to 4%, reaching their highest level since early March, while Taiwan equities rose 1.7%, hitting a two-week high.
The rally in these tech-heavy markets lifted the MSCI Emerging Asia Index by 1.6%, as investors rotated back into AI and semiconductor stocks, where earnings visibility remains strong.
According to BNP Paribas Asset Management, AI-driven demand and semiconductor strength continue to underpin the region’s equity outlook despite broader uncertainties.
ASEAN Markets Follow Higher
The positive momentum extended across Southeast Asia:
Singapore, Malaysia, and Thailand markets rose around 1%
The MSCI ASEAN Index climbed to an eight-session high
Singapore’s market was seen as benefiting from its defensive and highly liquid characteristics, making it attractive during uncertain periods.
Policy Expectations Support Korea Rally
In South Korea, optimism was further supported by expectations of market-friendly reforms, as President Lee Jae Myung prepares to engage with investors and corporate leaders.
While these reforms are viewed as positive for long-term equity performance, analysts caution they may not fully shield markets from prolonged geopolitical risks.
Fed Decision in Focus
Investor attention is firmly on the Federal Reserve, with markets expecting a continued pause in rate hikes and potential easing into next year.
Analysts highlight a possible policy divergence, where the Fed maintains a softer stance while other major economies may lean toward tightening.
The Fed’s communication will be critical in balancing:
Inflation risks from rising oil prices
Growth concerns amid geopolitical tensions
Currency Moves Reflect Regional Strength
Regional currencies showed resilience:
Malaysian ringgit strengthened to near a five-year high against the Singapore dollar
Philippine peso rebounded after hitting a record low earlier in the week
However, policymakers in some countries, including the Philippines, signalled that rate hikes may be needed if oil prices continue to rise.
Risks Remain Despite Optimism
Despite the rally, analysts warn that markets may be underestimating geopolitical risks, particularly if the Middle East conflict persists.
While AI and structural reforms are supporting sentiment, they may not fully offset the impact of prolonged energy shocks and global uncertainty.
Investor Takeaways
Tech-led gains in South Korea and Taiwan are driving the broader Asian market rally.
Strong demand for AI and semiconductor stocks continues to support earnings visibility.
ASEAN markets are benefiting from spillover optimism, with defensive markets like Singapore attracting flows.
The Federal Reserve decision remains the key catalyst, especially regarding future rate direction.
Geopolitical risks and oil prices remain key downside factors that could reverse current gains.
Comments
Post a Comment