[SMM Steel Market Morning News] Multiple Regions Set 2025 Consumption Growth Targets

★Macro★

01 ★★★【Consumption Growth Targets for 2025 Set in Multiple Regions】

Promoting consumption is the primary driver for expanding domestic demand. During recent local two sessions, several major economic provinces announced their 2025 total retail sales growth targets. Henan set a target of around 6%, while Jiangsu, Zhejiang, Guangdong, and Sichuan set targets of approximately 5.5%, over 5%, around 5%, and 5%, respectively. Tian Lihui, Dean of the Financial Development Research Institute at Nankai University, stated in an interview that the 2025 total retail sales growth targets of 5% or higher set by several major economic provinces reflect local governments' confidence in the consumer market and their positive expectations for economic growth.

02 ★★★ 【Key Points from the State Council Information Office Press Conference (National Financial Regulatory Administration)】

National Financial Regulatory Administration: 1. Currently, the amount of insurance funds invested in stocks or equity funds has exceeded 4.4 trillion yuan. 2. Policies for insurance fund investments will be further optimized and improved, encouraging insurance funds to steadily increase their proportion of stock market investments. Large state-owned insurance companies are expected to play a leading role, striving to allocate 30% of new annual premiums to stock market investments and steadily increase the proportion of insurance funds invested in the stock market. 3. The second batch of long-term stock investment trials for insurance funds will have a scale of 100 billion yuan, with 50 billion yuan approved for stock market investments before the Chinese New Year. 4. As of now, the real estate financing coordination mechanism has supported the construction and delivery of 14 million housing units. 5. The second batch of long-term stock investment trials for insurance funds will adopt a more flexible mechanism, allowing funds to be initiated independently or jointly by two or more entities.

★Industry and Downstream★

01 ★★★  【SMM Hot Topic】(Review of 2024 Steel Exports by Category) Second Highest in History! YoY Growth Across All Steel Categories in 2024

According to data from the General Administration of Customs, China exported a total of 110.716 million mt of steel from January to December 2024, up 22.7% YoY. China's steel exports continued to grow in 2024, approaching the highest level in nearly a decade (second only to the total exports in 2015). The average export price of Chinese steel in 2024 was $755.4/mt, down 19.36% YoY. Taking the FOB prices of major global HRC export markets in 2024 as an example, the average export price of Chinese HRC was $515.75/mt; CIS HRC was $540.19/mt; Japanese HRC was $561.01/mt; and Indian HRC was $575.9/mt, highlighting China's continued export advantage.

02 ★★★【SMM Steel End-Use Demand Report】Chinese New Year Holiday Approaching, Downstream Construction Sites Gradually Shut Down

By the end of January, the market entered the traditional Chinese New Year holiday period. Downstream end-users have gradually gone on holiday, and the market has entered a dormant state. Steel transactions have become mediocre, and overall steel demand has reached a seasonal low. From a macro perspective, macroeconomic stimulus policies in January were relatively limited, and the market entered a policy vacuum period. However, China's manufacturing PMI remained in the expansion territory for three consecutive months, indicating that macroeconomic stimulus policies are taking effect. With the further implementation of existing policies and a package of incremental policies, overall market demand is expected to stabilize and recover at an accelerated pace. In February, downstream enterprises are expected to resume operations after the Lantern Festival, leading to a wave of resumption in production and operations. Downstream demand will gradually recover, and overall steel demand is expected to continue rebounding.

03 ★★★ 【Xi Jinping: The Steel Industry Is a Key Fundamental Industry for Our Country, and the Real Economy Is the Foundation of the National Economy】

On the afternoon of the 23rd, General Secretary Xi Jinping visited the third cold rolling mill of Bensteel Group's cold rolling plant in Benxi City, Liaoning Province. He inspected the operation of the centralized control intelligent system in the control center, learned about the cold rolling process, technological innovations, and product performance in the workshop, and warmly greeted model workers, young technical experts, and frontline employee representatives. Xi Jinping stated that Bensteel is an old enterprise in China. Through the restructuring of Bensteel with Ansteel, the modern corporate system has been improved, and industrial transformation and upgrading have been promoted, giving the enterprise new vitality. The steel industry is a key fundamental industry for our country, and the real economy is the foundation of the national economy. Efforts must continue to address shortcomings, optimize the structure, and contribute more to Chinese-style modernization.

04 ★★★ 【Directly Boosting Consumption by Over 260 Billion Yuan, Over 60 Million Units of Home Appliances Sold Through Trade-In Programs in 2024】

The head of the Department of Circulation Development at the Ministry of Commerce discussed the development of China's wholesale and retail sectors in 2024. Trade-in programs have achieved remarkable results, with domestic "trendy" products widely favored. The home appliance trade-in program has yielded positive outcomes. In 2024, with increased central support, sales of eight categories of home appliances through trade-in programs exceeded 60 million units, directly boosting consumption by over 260 billion yuan. According to data from the National Bureau of Statistics, in 2024, retail sales of household appliances and audio-visual equipment by enterprises above the designated size exceeded 1 trillion yuan, setting a record high. The trade-in program for electric bicycles continued to advance. Nationwide, 43,000 sales outlets participated in the electric bicycle trade-in program, organizing 3,902 events and facilitating the purchase of 1.38 million new bicycles. Traditional brand products were highly popular. In 2024, 347 "Traditional Brand Carnival" events were held across the country, driving online and offline sales of 21.74 billion yuan. Major e-commerce platforms hosted nearly 60,000 stores for traditional Chinese brands, achieving sales of nearly 90 billion yuan, up 10.9% YoY.

05 ★★ 【SMM Steel Industry Chain Weekly Report】Market Gradually Enters Holiday Mode, Will Steel Prices See a "Good Start" in the Year of the Snake?!

This week, the ferrous metals series fluctuated rangebound. Overseas, US President Trump was inaugurated on the 20th, signing over 40 executive orders on the same day, covering border immigration policies, withdrawal from international organizations or agreements, and more, drawing significant international attention. Domestically, provincial-level two sessions for 2025 were held successively. As of January 21, GDP targets for 2025 had been announced by 31 provinces (regions, municipalities), with most setting targets of no less than 5%. In the spot market, as the Chinese New Year approaches, some merchants have already started their holiday breaks this week, leading to a rapid decline in transaction levels.

In the short term, the spot market is gradually entering a dormant state, coupled with heightened risk-averse sentiment in capital markets. Steel prices are expected to stabilize before the holiday. Currently, steel inventory pressure remains relatively low YoY. Attention should be paid to the post-holiday inventory buildup and destocking pace. If post-holiday fundamentals show low imbalances, combined with positive sentiment for a "good start" after the holiday, prices may see a rebound opportunity.

★Other Hot Topics★

⭕【Beijing's Q1 Major Projects Commence】Recently, Beijing's Q1 2025 major projects commencement event was held at the project site in the Yizhuang Comprehensive Bonded Zone. A total of 160 major projects were launched, with a total investment exceeding 340 billion yuan. Municipal Party Secretary Yin Li attended the event, and Deputy Party Secretary and Mayor Yin Yong announced the commencement of the projects.

⭕【Yongyang Special Steel Group's Small Section Project Successfully Produces Steel and Commences Operation】The small section project of Yongyang Special Steel Group is the final project in the company's relocation from urban areas. Its operation marks the full completion of Yongyang Special Steel Group's relocation project, with the new area entering a new phase of reaching full production and efficiency. The production line is designed for an annual output of 200,000 mt, mainly producing small light rails, small-sized angle steel/channel steel for steel towers, rail gauge blocks, and light rail joint plates. It adopts a semi-continuous rolling process route with a traversable BD rolling mill, intermediate rolling mill group, and universal finishing mill group. A reheating device is configured before the universal rolling mill to ensure the final rolling quality of ultra-thin and small-section rolled products.