China Recasts Commodity Demand as Property Slump Deepens and High-End Manufacturing Hits Records
Updated
Updated · Reuters · May 14
China Recasts Commodity Demand as Property Slump Deepens and High-End Manufacturing Hits Records
8 articles · Updated · Reuters · May 14
China’s commodity profile is shifting as a years-long property downturn crushes construction-linked demand while electric vehicles, batteries and renewable-energy equipment take a larger share of output.
Since 2022, real-estate investment has contracted steadily, dragging steel, cement, glass and ceramics output to multi-year lows and cutting consumption of thermal coal, natural gas and other industrial feedstocks.
Since 2010, services have overtaken the secondary sector as China’s main growth engine and top employer, sharpening the break from the construction-heavy model that drove commodity demand for decades.
Record 2026 exports of EVs, batteries, renewable-energy systems and even nuclear-reactor components are reshaping demand for lithium, graphite, nickel, cobalt and rare earths while displacing raw-material needs in importing countries.
For global commodities markets, the transition complicates forecasting: China is exporting more cement and clinker even as domestic demand stays weak, and any extension of the U.S.-China trade truce could ease pressure around rare-earth flows.
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China 2026: Navigating a Deep Property Downturn and the Rise of High-End Manufacturing
Overview
China's property sector is facing a deep and ongoing slump, marked by a slow housing market crash and a sharp drop in apartment prices that have eroded household savings. This crisis is made worse by a persistent oversupply of homes, making a quick recovery unlikely. By late 2025, almost all major cities saw falling prices, showing a widespread market decline. In response to rising default risks, regulators have extended policies to help banks manage bad personal loans. These interconnected challenges highlight the severity of the downturn and its impact on both the financial system and Chinese households.