[SMM Steel Market Morning News] China Securities Depository and Clearing Corporation: Preferential Measures Implemented for Securities Pledge Registration Fees Involved in Swap Facilities for Securities, Fund, and Insurance Companies

★ Macro ★ 01 ★★ 【China Securities Depository and Clearing Corporation: Preferential Measures for Pledge Registration Fees Involving Securities Swap Convenience for Securities, Funds, and Insurance Companies】 China Securities Depository and Clearing Corporation (CSDC) issued a notice to better support the smooth implementation of securities swap convenience (SFISF) for securities, funds, and insurance companies. It decided to halve the pledge registration fees for all SFISF-related securities handled by CSDC. For Stock Connect securities, the pledge registration fee is charged based on the number of pledged shares (units). 02 ★★ 【PBOC to Release Medium and Long-Term Liquidity by Year-End 2024 Using Various Tools】 On December 31, 2024, the People's Bank of China (PBOC) announced that to maintain sufficient liquidity in the banking system, it conducted 1,400 billion yuan of outright reverse repo operations in December 2024 through fixed-quantity, interest rate bidding, and multiple price bidding methods. Among these, 700 billion yuan was for a 3-month (91-day) term, and 700 billion yuan for a 6-month (182-day) term. On the same day, the PBOC also announced that to strengthen counter-cyclical monetary policy adjustments and maintain sufficient liquidity in the banking system, it conducted open market government bond transactions in December 2024, with a net purchase of bonds totaling 300 billion yuan for the month. ★ Industry and Downstream ★ 01 ★★ 【Wuhan Extends Certain Real Estate Policy Deadlines】 The Wuhan Housing and Urban Renewal Bureau issued a notice to extend the deadlines for certain real estate policies. The policy on "temporarily adjusting the housing provident fund loan limit" in the "Notice on Further Promoting the Stable and Healthy Development of Wuhan's Real Estate Market" (Wufangfa [2023] No. 8) will be extended to June 30, 2025. The policies on "promoting the 'sell old, buy new' transaction model" and "optimizing approval services for new commercial housing projects" in the "Notice on Further Optimizing and Improving Policies to Promote the Stable and Healthy Development of Wuhan's Real Estate Market" (Wufangfa [2024] No. 1) will also be extended to June 30, 2025. Additionally, the policies on "optimizing the criteria for determining the number of personal housing loans" and "providing temporary home purchase discounts" in the "Notice on Continuously Promoting the Stable and Healthy Development of Wuhan's Real Estate Market" (Wuzhugenfa [2024] No. 13) will be extended to June 30, 2025. 02 ★★ 【SMM HRC Inventory: Destocking in Major Cities Outpaces Inventory Buildup】 This week, Lecong's HRC inventory stood at 54.41 mt, down 5,400 mt WoW (-0.99%); up 162,700 mt YoY (+29.90% on a lunar calendar basis). Shanghai's HRC inventory was 245,200 mt, up 5,800 mt WoW (+2.42%); down 39.32% YoY (solar calendar) and 32.91% YoY (lunar calendar). Tangshan's HRC inventory was 421,400 mt, down 2,800 mt WoW (-0.66%); down 364,800 mt YoY (-46.4%). 03 ★★ 【Anhui's First Batch of Major Projects in 2025 to Exceed 400 Billion Yuan in Total Investment】 In 2025, Anhui province will mobilize the first batch of 622 projects, with a total investment of 405.75 billion yuan and an annual planned investment of 111.98 billion yuan. Among these, eight projects exceed 5 billion yuan each. This information was revealed at the province-wide mobilization meeting for the first batch of major projects in Anhui on January 2. Among the first batch of major projects in 2025, there are 370 manufacturing projects with a total investment of 216.44 billion yuan and an annual planned investment of 63 billion yuan, accounting for 56.3% of the annual planned investment for the first batch. There are also 98 infrastructure projects with a total investment of 115.09 billion yuan, 94 service industry projects with a total investment of 35.5 billion yuan, and 60 social livelihood and other projects with a total investment of 38.71 billion yuan. 04 ★★ 【Hainan to Continue "Trade-In" Subsidy Policy This Year】 The Hainan Provincial Department of Commerce recently issued a notice on the arrangements for the 2025 trade-in policy for consumer goods. According to the notice, starting January 1, 2025, Hainan will continue to implement subsidies for home appliances, home decoration and furniture, vehicle scrappage and renewal, vehicle replacement and renewal, and electric bicycle trade-in policies. 05 ★★ 【Over 10 Provinces and Cities Announce Extension of "Trade-In" Subsidy Policy for 2025 to Stabilize Confidence in Home Appliance Consumption】 As of January 2, 2025, more than 10 provinces (municipalities) in China have announced the extension of the "trade-in" subsidy policy for 2025 to stabilize domestic home appliance market consumption confidence. Wu Xianjian, Executive Deputy Secretary General of the China Household Electrical Appliances Commercial Association, stated that according to announcements from local commerce departments between December 30, 2024, and January 2, 2025, 10 provinces (municipalities), including Hebei, Hunan, Jiangsu, Guizhou, Shanghai, Guangdong, Xinjiang, Hainan, Guangxi, and Sichuan, as well as Xi'an and Weinan in Shaanxi, have announced the extension of the "trade-in" policy for 2025. Specific implementation details in many regions are yet to be released. 06 ★★ 【National Railways to Put 2,600 Kilometers of New Lines into Operation in 2025】 According to China State Railway Group, in 2025, the national railway system is expected to achieve passenger transport volume of 4.28 billion people (up 4.9% YoY) and freight transport volume of 4.03 billion mt (up 1.1% YoY). It aims to fully complete the national railway investment tasks, advance key national projects with high quality, and strive to complete infrastructure investment of 590 billion yuan, putting 2,600 kilometers of new lines into operation. Total transportation revenue is expected to reach 1,016 billion yuan, up 25.8 billion yuan YoY (+2.6%). The railway system will adhere to green development and pragmatically and steadily promote carbon peaking and carbon neutrality. By 2030, the total railway operating mileage nationwide will reach approximately 180,000 kilometers, including about 60,000 kilometers of high-speed rail, forming nationwide 1-, 2-, and 3-hour railway travel circles and 1-, 2-, and 3-day fast freight logistics circles. 07 ★★ 【China Index Academy: Second-Hand Housing Prices in 100 Cities Fell 7.26% in 2024】 According to a report by the China Index Academy, in 2024, second-hand housing prices in 100 cities cumulatively fell by 7.26%, marking 32 consecutive months of MoM declines. After the "9.26 New Policy," prices in core cities stabilized, with four cities and two cities recording MoM increases in November and December, respectively, ending a seven-month streak of declines across all 100 cities. Chengdu and Shenzhen saw two consecutive months of price increases. In 2024, due to the entry of some high-quality improvement-oriented housing projects, new residential housing prices in 100 cities cumulatively rose by 2.68% structurally. Demand side, under a neutral scenario, the national sales area of new commercial housing in 2025 is expected to decline by 6.3% YoY. Under an optimistic scenario, if urban village redevelopment and existing housing policies are accelerated, and residents' willingness to purchase homes improves, the national sales area of commercial housing in 2025 may stabilize. Supply side, constrained by reduced land supply, financial pressure on developers, and high market inventory levels, new construction starts in 2025 are expected to decline by 15.6% YoY, and real estate development investment is expected to decline by 8.7% YoY. ★ Other Hot Topics ★ ⭕ 【Heilongjiang Jianlong Achieves Mass Production of Low-Sulfur Continuous Casting Billets】 Recently, Heilongjiang Jianlong successfully achieved mass production of low-sulfur continuous casting billets without pig iron pretreatment, marking a major breakthrough in its vanadium smelting process. Low-sulfur continuous casting billets require high strength, high toughness, excellent fatigue resistance, fracture resistance, and corrosion resistance to ensure stability and durability in extreme environments. The billets produced this time involve a wide variety of steel alloys, significant technical challenges, multiple constraints, and strict detail control. The sulfur content in the finished product must be ≤0.003%. Producing such billets without pig iron pretreatment means that even slight deviations could lead to excessive sulfur content, affecting the final product quality. ⭕ 【Shagang Construction Steel Price Policy】 On January 1, Jiangsu Shagang announced its ex-factory prices for early January. Prices for rebar and wire rod were reduced, with rebar priced at 3,600 yuan/mt, high-speed wire rod at 3,520 yuan/mt, and coiled rebar at 3,610 yuan/mt. All prices include tax and are effective from January 1, 2025. 【SMM Steel】 ⭕ 【National Railways Achieved Total Transportation Revenue of 990.18 Billion Yuan in 2024】 In 2024, the national railway system achieved total transportation revenue of 990.18 billion yuan, up 2.7% YoY, with total profits reaching a record high. The China State Railway Group deepened comprehensive budget management, strengthened budget guidance and rigid constraints, and enhanced cost control, saving 24.2 billion yuan compared to the budget for the year. It promoted healthy development in key business sectors, with non-transportation profits totaling 34.54 billion yuan. Improved management of joint-venture railways resulted in total profits of 24.58 billion yuan for joint ventures controlled by the China State Railway Group, up 28.2% YoY. The group adhered to market-oriented fundraising for low-cost debt, optimized the railway debt structure, and reduced the asset-liability ratio to 63.8% by the end of 2024, down 1.7 percentage points from the previous year-end. ⭕ 【Shagang's January 2025 HRC Price Adjustment Information】 On January 1, Shagang adjusted its ex-factory prices for HRC. Based on the "December 1, 2024, Shagang HRC Price Adjustment Information," the price of Q235 5.5*1500mm HRC was reduced by 150 yuan/mt, with the new price set at 3,650 yuan/mt. All adjustments include tax and are effective from January 1, 2025. 【SMM Steel】 ⭕ 【PBOC: Conducted 11.755 Billion Yuan of Standing Lending Facility Operations in December】 The PBOC released data showing that to meet the temporary liquidity needs of financial institutions, it conducted standing lending facility (SLF) operations totaling 11.755 billion yuan in December 2024, including 1.605 billion yuan for overnight terms and 10.15 billion yuan for 7-day terms. The SLF balance at the end of the period was 11.7 billion yuan. SLF rates served as the upper limit of the interest rate corridor, helping maintain stable money market rates. The SLF rates for overnight, 7-day, and 1-month terms were 2.35%, 2.50%, and 2.85%, respectively.