[SMM Steel Market Morning News] Economic Operation in 2024 to Progress Steadily

★Macro★

01 ★★★【Economic Performance in 2024 Shows Steady Progress】

Preliminary calculations indicate that the annual GDP reached 13,490.84 billion yuan, up 5.0% YoY in constant prices. By industry, the added value of the primary industry was 914.14 billion yuan (up 3.5% YoY), the secondary industry was 4,920.87 billion yuan (up 5.3% YoY), and the tertiary industry was 7,655.83 billion yuan (up 5.0% YoY). By quarter, GDP grew 5.3% YoY in Q1, 4.7% YoY in Q2, 4.6% YoY in Q3, and 5.4% YoY in Q4. On a QoQ basis, GDP grew 1.6% in Q4.

02 ★★★ 【Industrial Output Above Designated Size Grew 6.2% in December 2024】

In December, industrial output above designated size grew 6.2% YoY in real terms (growth rates are adjusted for price factors). On a MoM basis, industrial output above designated size increased by 0.64% from the previous month. For 2024, industrial output above designated size rose 5.8% YoY.

03 ★★ 【China's Total Goods Trade Reached 43,846.8 Billion Yuan in 2024】

According to the National Bureau of Statistics, China's total goods trade in 2024 amounted to 43,846.8 billion yuan, up 5.0% YoY. Exports totaled 25,454.5 billion yuan (up 7.1% YoY), while imports reached 18,392.3 billion yuan (up 2.3% YoY). Trade with Belt and Road Initiative countries grew 6.4%, accounting for 50.3% of the total trade. Exports of mechanical and electrical products increased by 8.7%, representing 59.4% of total exports. In December, total goods trade reached 4,067 billion yuan (up 6.8% YoY), with exports at 2,409.9 billion yuan (up 10.9% YoY) and imports at 1,657 billion yuan (up 1.3% YoY).

★Industry and Downstream★

01

 ★★★  【SMM HRC Daily Trading】Futures Market Strongly Up, Spot Trading Significantly Weakens

On January 17, the daily trading volume of HRC samples from four cities (Shanghai, Lecong, Tianjin, Ningbo) monitored by SMM totaled 11,770 mt, down 3,420 mt (-22.5%) WoW. Futures prices continued to rebound strongly, while spot prices rose by 10-30 yuan/mt. As the year-end approaches, some traders began wrapping up their work. Overall, trading weakened, and with downstream and agents gradually taking holidays, further weakening in trading appears likely.

02 ★★★【SMM Steel Industry Chain Weekly Report】Steel Prices Expected to Fluctuate Upward and Stabilize Ahead of Chinese New Year

This week, the ferrous metals series fluctuated upward. Overseas, the US December unadjusted core CPI YoY rate recorded 3.2%, slightly below expectations, fueling interest rate cut expectations. Domestically, at the beginning of the week, People's Bank of China Governor Gongsheng Pan stated at the 18th Asian Financial Forum that risks in the real estate market had significantly weakened, and overall market transactions had improved. Subsequently, the latest data from the General Administration of Customs showed that China exported 9.727 million mt of steel in December 2024, up 4.8% MoM. For January-December, cumulative steel exports reached 110.716 million mt, up 22.7% YoY, marking an impressive performance for steel exports in 2024! Mid-week, the State Council Information Office held a press conference on "China's High-Quality Economic Development Achievements," further highlighting policy determination to restore the economy. On the industry side, steel inventory data showed strong downstream demand in the second week before the holiday. In the spot market, as the Chinese New Year approaches, stronger steel prices improved market sentiment this week.

03 ★★★ 【Major Projects to Commence in Q1, Special Bonds Issued Early to Support】

At the start of 2025, multiple regions announced the launch of the first batch of major projects for the year to ensure a stable economic start. Several leading indicators also reflected the enthusiasm for major project launches at the beginning of 2025. A more proactive fiscal policy was implemented early, with local government bonds issued at the start of the year to support infrastructure investment. The continued progress in local debt resolution is expected to release more government resources to support infrastructure. Experts believe that improvements in supporting measures, such as the special bond management system, will also facilitate the efficient allocation of project funds. With multiple positive factors, infrastructure investment in Q1 is expected to maintain strong momentum.

04 ★★ 【Changes in Housing Prices in Tier-1 Cities in December 2024】

According to the National Bureau of Statistics, in December, new commercial residential housing prices in Beijing decreased by 0.1% MoM (previous value: -0.5%) and 5.4% YoY (previous value: -5.3%). In Shanghai, prices increased by 0.5% MoM (previous value: +0.6%) and 5.3% YoY (previous value: +5%). In Guangzhou, prices decreased by 0.1% MoM (previous value: -0.3%) and 9.1% YoY (previous value: -9.9%). In Shenzhen, prices increased by 0.2% MoM (previous value: +0.3%) and decreased by 6.1% YoY (previous value: -7.1%).

05 ★★★ 【YoY Decline in Residential Housing Prices Narrowed Across All City Tiers】

In December, new commercial residential housing prices in tier-1 cities decreased by 3.8% YoY, with the decline narrowing by 0.5 percentage points from the previous month. Among them, prices in Beijing, Guangzhou, and Shenzhen fell by 5.4%, 9.1%, and 6.1%, respectively, while Shanghai saw a 5.3% increase. Prices for second-hand residential housing in tier-1 cities decreased by 6.7% YoY, with the decline narrowing by 1.3 percentage points. Specifically, prices in Beijing, Shanghai, Guangzhou, and Shenzhen fell by 4.5%, 3.4%, 10.9%, and 8.0%, respectively.

★Other Hot Topics★

⭕【Advanced Coal Capacity in Shanxi Reached 83%】According to the Shanxi Provincial Government Work Report, in 2024, Shanxi's energy supply capacity was effectively enhanced. Seven coal mines under construction entered joint trial operation, 10 coal mines completed final acceptance, and five producing coal mines completed capacity increases. The province's raw coal production above designated size is expected to reach 1.27 billion mt for the year.

⭕【Lu'an Environmental Energy: 2024 Net Profit Expected to Decline by 65.29%-70.97% YoY】Lu'an Environmental Energy announced that its net profit attributable to shareholders of publicly listed firms for 2024 is expected to range from 2.3 billion yuan to 2.75 billion yuan, a decrease of 5.622 billion yuan to 5.172 billion yuan YoY (-65.29% to -70.97%). Net profit excluding non-recurring gains and losses is expected to range from 2.2 billion yuan to 2.65 billion yuan, a decrease of 5.689 billion yuan to 5.239 billion yuan YoY (-66.41% to -72.11%). The decline in performance is mainly attributed to falling coal market prices, geological structures of production mines, mining and excavation coordination, increased resource tax rates, and changes in employee compensation.

⭕【China's Crude Steel Production Reached 1.0051 Billion mt in 2024】According to the National Bureau of Statistics, in December 2024, China's crude steel, pig iron, and steel production reached 75.97 million mt, 66.7 million mt, and 119.1 million mt, respectively, up 11.8%, 9.4%, and 7.1% YoY. Daily average production was 2.4506 million mt, 2.1516 million mt, and 3.8419 million mt, respectively, down 6.2%, 4.3%, and 3% MoM. For January-December, China's crude steel, pig iron, and steel production totaled 1.0051 billion mt, 851.74 million mt, and 1.3997 billion mt, respectively, down 1.7%, 2.3%, and up 1.1% YoY.