[SMM Steel Market Morning News], over 20 localities launched a new round of housing subsidy policies, with the maximum subsidy reaching 300,000 yuan

★Macro★

01 ★★ [Ministry of Finance Plans Fifth Reissuance of the 2026 Book-Entry Interest-Bearing (Tenth Tranche) Government Bond, with Total Competitive Bidding Face Value of 90 Billion Yuan]

The Ministry of Finance plans the fifth reissuance of the 2026 book-entry interest-bearing (tenth tranche) government bond. The reissued bond is a 10-year fixed-rate interest-bearing government bond. The competitive bidding total face value of the reissued bond is 90 billion yuan, with additional bidding for Class A members. The coupon rate of the reissued bond is consistent with previously issued bonds of the same term, at 1.72%. The value date and redemption arrangements of the reissued bond are the same as those of the previously issued bonds. Interest accrual starts from May 15, 2026, with semi-annual payments on May 15 (postponed to the next business day if a holiday, the same hereinafter) and November 15, and principal redemption along with the final interest payment on May 15, 2036. The bidding time is from 10:35 to 11:35 a.m. on July 22, 2026.

★Industry and Downstream★

01 ★★ [SMM Weekly HRC Balance] Production Continues to Decline, This Week Officially Enters an Inventory Buildup Cycle

This week, SMM’s surveyed social inventory of hot-rolled coil at 86 warehouses nationwide (large sample) stood at 4.333 million mt, down by 9,400 mt or 0.22% WoW, and up by 44.35% lunar YoY. By region, the northeast market saw a relatively large inventory buildup, while storage levels in the central and southern regions narrowed marginally.

02 ★★★ [SMM Weekly Building Materials Balance] Tug-of-War Between Sellers and Buyers Turns Mild, Building Materials Inventory Buildup Pace Is Slower

This period, on the supply side, the comprehensive per-tonne margins for both BF and EAF steel mills were mostly near the break-even level. Most steel mills maintained their existing production pace, with only a few BF mills rotating their building material rolling lines for maintenance, adjusting the production mix of rebar and wire rod. Overall, production fluctuated relatively little. Demand side, earlier typhoon warnings led to some front-loading of shipments in east China. As the typhoon moved northward, and with the release of macro data, market expectations for H2 demand showed signs of improvement, leading to a rise in spot and futures rebar prices. Trading activity improved, and end-user procurement enthusiasm picked up, with apparent demand for building materials continuing to edge up. According to SMM statistics, both mill and social inventories saw varying degrees of buildup. Total building material inventory stood at 8.3962 million mt, up by 74,300 mt or 0.89% WoW, with the inventory buildup pace continuing to slow down.

03 ★★★ [Over 20 Regions Introduced New Round of Housing Subsidy Policies, with Maximum Subsidy up to 300,000 Yuan]

According to incomplete statistics, since the beginning of this year, more than 20 provinces and cities nationwide have introduced home purchase subsidies, including Guangdong, Hubei, Guizhou, Yunnan, as well as Chengmai County in Hainan, Lhasa in Tibet, Huai'an in Jiangsu, Jinjiang in Fujian, and Urumqi in Xinjiang. The biggest change in these home purchase subsidy policies is the addition of "customized packages" precisely targeted at specific groups, on top of the universal red envelopes. In the toolbox of property market regulation, home purchase subsidies are becoming more refined and differentiated. The greatest beneficiaries of these "customized packages" remain high-level talent. For example, Huangpu District in Guangzhou has introduced a talent housing voucher subsidy policy, with subsidies of 100,000 yuan for qualified bachelor’s degree holders (or senior technicians), 150,000 yuan for master’s degree holders (or those with associate senior titles, special-grade technicians), 250,000 yuan for doctoral degree holders (or those with senior titles, chief technicians), and 300,000 yuan for postdoctoral researchers starting work in the district within one year of leaving their stations.

★Other Hot Topics★

⭕[Amid Middle East Conflicts, Saudi Arabia Turns to Bab el-Mandeb Strait for Crude Oil Exports]Shipping through the Strait of Hormuz was obstructed due to the conflict, prompting oil-exporting giant Saudi Arabia to shift crude exports through the Bab el-Mandeb Strait. Data from professional institutions shows that the daily average crude loading volume at Saudi Arabia’s Red Sea port of Yanbu recently approached peak levels. According to UK-based Sigmal Ocean Company, around July 13, the crude loading volume at Yanbu port reached a daily average of 4.7 million barrels, up nearly 40% from 3.36 million barrels around the 10th. Since June, the daily average crude loading volume at Yanbu exceeded 4 million barrels, compared to only 973,000 barrels a day a year earlier. After the Iran conflict erupted, to bypass the obstructed Strait of Hormuz, Saudi Aramco used a trans-peninsular pipeline to transport crude from the Persian Gulf oil-producing region in eastern Saudi Arabia to Yanbu port. The peak daily average transportation capacity of this pipeline reaches 7 million barrels, of which about 5 million barrels are exported.

⭕[Iran Says Strait of Hormuz Will Not Reopen Under US Pressure]The Iranian embassy in Lebanon issued a statement on July 16 local time, saying that the Strait of Hormuz will not reopen under US pressure and will only resume navigation “on Iran’s terms.” The statement said that the US should accept this reality, and there are only two ways to resolve the issue: through dialogue or by accepting that Iran’s military force will compel compliance “on Iran’s terms.”

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