Beijing and the commodity markets may see the Belt and Road scheme providing China with another lever in managing domestic steel demand and output.
The Belt and Road may serve as a stop gap in a wider transition in China to greater consumerism from the economy's reliance on investing in heavy industry and construction within China.
It may aid demand for raw materials imports as domestic steel usage slows or slips.
"Companies who supply steel, aluminum, cement and other construction-related materials," will stand to immediately benefit from the Belt and Road Initiative, according to HSBC bank's website, with a section dedicated to the project and its financing and investment needs.
Tata Steel Managing Director TV Narendran, in his role as chairman of World Steel Association's economics committee, said this month that Belt and Road will have an impact on countries participating in it, reflected in the steel demand forecast of those countries, rather than China itself.
But China's steel exports could fill some of the neighboring demand generated by the project.
The Belt and Road is not expected to help demand for Russian steel, with the networks in southern Eurasia more likely to be the focus, said a source at an industrial steel and mining group.
It may be good for Chinese steel, and any benefit may be indirect in supporting the seaborne coal and iron ore markets, he said.
"Africa could be the one that needs more steel than Belt and Road," he added.
News from platts.com
Edit by Ms Enya Wang of KRM/BSW
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