Via UBS:
Property & credit tightening weighs on sentiment into 2H17
We spent 27th- 31st March in China gauging commodity demand and supply trends. Demand is strong; order books are full and contacts were upbeat near term. But the cycle may be peaking – credit is becoming more expensive & house purchase restrictions have spread to 46 cities – weighing on sentiment into 2H17. But no-one foresees a substantial slowing given leadership transition this year. Bright spots including infrastructure, autos, consumer and machinery demand & output are all in line or stronger than expected. Supply reforms / closures remain crucial in supporting prices. It’s unclear if new leadership will tilt toward growth or reform from 2018e. No immediate implications for UBS commodity views.
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