The third session of the 14th National People's Congress opened at 9:00 am on May 5, 2025, in the Great Hall of the People. The meeting heard a report on the work of the government by Premier Li Qiang, reviewed the State Council's report on the implementation of the national economic and social development plan for 2024 and the draft plan for 2025, and examined the State Council's report on the execution of the central and local budgets for 2024 and the draft budgets for 2025. We have excerpted and interpreted the content related to steel and the black industry chain from the government work report.
- Key Macro Data
Fiscal policy remains "more proactive," while monetary policy is described as moderately loose, with timely RRR cuts and interest rate cuts to maintain ample liquidity and promote the healthy development of the real estate and stock markets with greater force.
- Steel Demand Side
Local government special bonds totaling 4.4 trillion yuan are planned, an increase of 500 billion yuan over the previous year, mainly for investment in construction, purchasing existing commercial properties, and settling overdue payments owed by local governments to enterprises. The total new government debt for this year is 1.186 trillion yuan, an increase of 290 billion yuan over the previous year.
A moderately loose monetary policy will be implemented, with timely RRR cuts and interest rate cuts to maintain ample liquidity. Structural monetary policy tools will be optimized and innovated to promote the healthy development of the real estate and stock markets with greater force.
Efforts will continue to stabilize the real estate market. Intensified efforts will be made to renovate urban villages and dilapidated houses. Purchasing existing commercial properties and ensuring housing delivery will continue.
Eligible rural migrants will be included in the housing security system. Urban renewal and renovation of old residential areas will continue.
Consumption and investment efficiency will be significantly boosted, and domestic demand will be expanded in all aspects. A super-long-term special treasury bond of 300 billion yuan will support trade-in policies for consumer goods.
Effective investment will be actively expanded. This year, 735 billion yuan is proposed for central budgetary investment. The super-long-term special treasury bond will be used to support the program of large-scale equipment upgrades and consumer goods trade-ins and the implementation of major national strategies and the development of security capabilities in key areas with greater force.
The digital transformation of manufacturing will be accelerated. The development of intelligent and connected NEVs, AI-powered smartphones and computers, smart robots, and other next-generation intelligent terminals, as well as intelligent manufacturing equipment, will be vigorously promoted.
- Steel Supply Side
The pace of upgrading traditional industries will be accelerated, guiding manufacturing towards high-end, intelligent, and green directions. The capacity replacement implementation methods for the steel, cement, and glass industries will be revised, promoting the steady exit of outdated and inefficient capacity.
Policies and measures to address structural imbalances in key industries will be introduced, breaking cut-throat competition through enhanced industrial regulation and quality upgrades. Continuous crude steel production control will be implemented, promoting the reduction and restructuring of the steel industry.
The target for energy consumption per unit of GDP in 2025 is a 3% decrease, higher than the 2024 target of 2.5%, and the actual decrease in 2024 was 3.8%.
Overall, the macro data released by the government is largely in line with market expectations, with no significant surprises. On the demand side, the real estate sector is more about stabilizing after a decline, which is unlikely to change the depressed state of the real estate market or drive additional steel demand. However, there is some incremental strength in fiscal policy for the program of large-scale equipment upgrades and consumer goods trade-ins, which may bring additional steel demand. On the supply side, the regulatory intensity this year is slightly higher than in 2024. Currently, China faces increasing anti-dumping frictions in steel, leading to a sharp rise in export resistance. In this context, annual supply reductions may be expected!
