----Interview with Kuncheng Huang
General Manager
Guangdong Xianggang Industry and Trade Co., Ltd.
Established in 2011, Guangdong Xianggang Industry and Trade Co., Ltd. is one of the leading construction steel distributors in South China. The company is primarily engaged in trading construction steels produced by major steel mills such as Xianggang, Liugang, Guanggang, Shaogang, Yuegang, Liangang, Lenggang, and Xinyu Steel, with an annual sales volume of nearly 500,000 tons.
Asian Metal: Welcome to our interview, Mr. Huang. Could you please introduce your company?
Mr. Huang: Our company, Guangdong Xianggang Industry and Trade Co., Ltd., was established in 2011 and is affiliated with Hunan Lianchuang Group. We have been rooted in the Guangdong-Hong Kong-Macao Greater Bay Area for over ten years. We are a large commercial enterprise integrating steel trade and engineering material supply. We source materials from major steel mills such as Xianggang, Liugang, Guanggang, Shaogang, Yuegang, Liangang, Lenggang, and Xinyu Steel. We have strong partnerships with large state-owned enterprises, including China Railway, China Power Construction, China Energy Engineering, and China Communications Construction. Our company has participated in the construction of large-scale engineering projects such as the Hong Kong-Zhuhai-Macao Bridge, Shenzhen Metro, Guangzhou Metro, Guangfo Light Rail, Shenzhen Outer Ring Expressway, and Zhanjiang Airport. The company’s monthly sales of construction steel can reach nearly 40,000 tons.
Asian Metal: How is the supply situation at steel mills in South China currently?
Mr. Huang: Currently, most steel mills in South China are operating at regular production levels, with a sufficient supply of materials. Overall, the market is still experiencing an oversupply situation.
Asian Metal: After a brief increase at the end of August, domestic construction steel prices entered a downward trend again in September. What do you think is the main reason for the price decrease?
Mr. Huang: After a continuous decline since July, domestic construction steel prices rebounded by over RMB100/t (USD14/t) at the end of August. However, since early September, they have continued to decline. For example, in the South China region, the price of rebar dropped from about RMB3,160/t (USD437/t) at the end of August to RMB3,050/t (USD422/t) at the beginning of September. I believe the main reason for this price decrease is weak demand. Since September, many construction projects have started slowly, and market demand has not improved significantly with the arrival of the traditionally high season. Additionally, the recent decline in futures market prices has dampened the confidence of traders, leading them to further lower prices to stimulate sales.
Asian Metal: Before the beginning of this year, the overall construction steel prices in South China were higher than those in North and East China. However, since March, prices in South China have been lower than those in North and East China. What are the reasons for this trend?
Mr. Huang: That's correct. In previous years, rebar prices in South China were about RMB100-200/t (USD 14-28/t) higher than in North and East China. However, currently, prices in South China are around RMB50/t (USD7/t) lower than in these two regions. The main reasons are high inventory pressure in the construction steel market in South China, as well as the impact of recent rainfall, which has dampened demand in the southern region of China. This has, to some extent, further exacerbated the price decline.
Asian Metal: Although the government has announced several favorable policies for the real estate market since the beginning of this year, the construction steel market has consistently fallen short of expectations. Could you please describe the current situation in downstream industries?
Mr. Huang: The favorable policies have helped to reduce the real estate inventory but have not boosted developers' confidence in acquiring land or initiating new commercial projects. Housing starts remain unsatisfactory, and many ongoing projects have extended their construction periods by more than six months due to funding issues. As a result, demand continues to be sluggish. According to statistics, the total sales volume of the top 100 real estate companies from January to August 2024 was only 2.68 trillion yuan, a year-on-year decrease of 38.5%. However, the decline has narrowed slightly by 1.6 percentage points compared to the previous month. In August, sales of the top 100 real estate companies fell by 22.1% year on year and 2.43% month on month.
Asian Metal: What do you foresee for the domestic construction steel market in Q4?
Mr. Huang: Personally, I believe that the domestic construction steel market in the fourth quarter will experience a pattern of suppression followed by a rebound. With the gradual arrival of treasury bond funds and the onset of the peak demand season, the market outlook for Q4 is more optimistic. For example, rebar prices in South China fell from RMB3,700/t (USD511/t) in early October to the current RMB3,400/t (USD470/t). It is expected that prices will increase by RMB200-300/t (USD28-41/t) before the end of the year.
Asian Metal: What are your company’s new development plans in the near future?
Mr. Huang: Considering the current market situation, we plan to provide more comprehensive and detailed supporting services to better meet our customers' personalized needs. In addition, we will actively expand our presence in overseas markets while maintaining stable domestic sales.
Asian Metal: Thank you for your insightful sharing. We wish your company continued success and prosperity!
