[SMM Steel Market Morning Briefing] First Batch of Special Bonds for Acquiring Existing Commercial Housing Lands

★

Macro

★

01

 ★★ 

Ministry of Finance: From January to April, China issued RMB1,492.7 billion in new local government bonds nationwide

The Bank of Korea announced a 25 basis point interest rate cut, lowering the rate from 2.75% to 2.5%, the lowest level since August 2022 and the fourth rate cut in the past six meetings.

★

Industry and Downstream

★

01

 ★★★  

[SMM HRC Weekly Balance] This week, the decline in HRC inventory slowed down, and the apparent demand cooled MoM

This week, the SMM-tracked social inventory of HRC in 86 warehouses (large sample) nationwide was 3.032 million mt, down 87,600 mt MoM, or 2.81% MoM, and down 25.29% YoY on the Gregorian calendar. This week, the nationwide social inventory continued to decline, but the rate of decline narrowed significantly. By region, the markets in south China and north-east China saw inventory buildup, while the markets in east China, central China, and north China continued the destocking trend.

02

 ★★ 

First batch of special bonds for acquiring existing commercial housing lands

Recently, the first batch of special bonds nationwide to support the acquisition of existing housing landed in Zhejiang. The initial RMB1.653 billion in funds will support the construction of a total of eight affordable housing projects in Huzhou, Wenzhou, and Jiaxing.

Industry insiders believe that Zhejiang's move to promote the acquisition of existing commercial housing using government special bonds reflects both policy innovation and foresight, as well as comprehensive support for destocking the real estate market, providing a reference for other regions.

★

Other Hot Topics

★

⭕[US initial jobless claims were 240,000 last week, higher than market expectations]The number of initial jobless claims in the US was 240,000 last week, compared to the expected 230,000. The previous week's figure was revised from 227,000 to 226,000.

⭕[CPCA: Pickup truck sales in April reached 50,000 units, up 14% YoY] According to CPCA data, in April 2025, nationwide pickup truck production was 52,000 units, up 18.8% YoY. From January to April, pickup truck production was 184,000 units, up 12.2% YoY. In April 2025, pickup truck sales reached 50,000 units, up 14% YoY but down 13% MoM, reaching the highest level in April history. From January to April 2025, pickup truck sales were 188,000 units, up 9% YoY, also reaching a historical high.

⭕[Li Auto's Q1 adjusted net profit was RMB1.02 billion, down 20% YoY] Li Auto reported Q1 revenue of RMB25.93 billion, up 1.1% YoY, compared to the estimated RMB25.12 billion. Adjusted net profit attributable to shareholders was RMB1.02 billion, down 20% YoY, compared to the estimated RMB1.19 billion. Adjusted earnings per ADS were RMB0.96, compared to RMB1.21 in the same period last year. Deliveries in Q1 reached 92,864 units, up 16% YoY, exceeding the estimated 91,087 units. The company projects Q2 revenue to range from RMB 32.5 billion to RMB 33.8 billion, compared to the market estimate of RMB 34.58 billion. The company also anticipates Q2 deliveries to be between 123,000 and 128,000 units, against the market estimate of 128,852 units.

⭕The near-"zero" carbon emission smelting project for high-grade steel at Shougang Group's Qian'an Iron and Steel Co., Ltd. is progressing smoothly. Construction commenced in March 2025, with ongoing foundation work for the plant. The project is expected to be completed and commence operations in December 2026.

⭕Sichuan has released a list of opportunities for urban renewal projects, encompassing a total of 966 projects. These projects primarily fall into eight categories, including urban infrastructure construction and renovation, urban village renewal, and old residential area renovation, with a total investment of RMB 210 billion.