[SMM Steel Market Morning News] China's Caixin Manufacturing PMI for January was 50.1, remaining above the 50 mark for four consecutive months.

★Macro★

01 ★★★

China's January Caixin Manufacturing PMI at 50.1, Remaining Above the 50 Mark for Four Consecutive Months

China's January Caixin Manufacturing PMI stood at 50.1, down from the previous value of 50.5, marking the fourth consecutive month above the 50 mark. Sub-indices of the January Caixin China Manufacturing PMI showed mixed performance. The production index, new orders index, finished product inventory index, production and business expectations index, and supplier delivery time index all rose within the expansion territory. The new export orders index rebounded slightly within the contraction territory, indicating accelerated growth in manufacturing supply and demand, marginal improvement in external demand, and better logistics and corporate expectations in January. Possibly affected by employees returning home early for the Chinese New Year, the employment index fell to its lowest level since March 2020 within the contraction territory. The raw material purchase price index dropped from the expansion territory to the 50 mark, while the ex-factory price index remained in the contraction territory for two consecutive months with an expanded decline, reflecting stable manufacturing costs but falling selling prices, squeezing profits. To meet the needs of accelerated production and building safe inventories, companies continued to increase procurement, though at a slower pace, with the raw material inventory index slightly declining within the expansion territory.

02★★ 

NDRC: Building International Logistics Hub Centers and Bulk Commodity Resource Allocation Hubs

An official from the National Development and Reform Commission (NDRC) stated that a series of measures will be taken to continuously improve China's logistics infrastructure network, enhance operational efficiency, and promote a sustained reduction in logistics costs across society. Latest data shows that by the end of 2024, the total number of national logistics hubs in China will increase to 151, achieving basic coverage and effective radiation for cities with a regional GDP of over 400 billion yuan. Nearly half of these hubs are related to industrial development and consumption. Currently, the railway port entry rate at main coastal ports and major ports along the Yangtze River exceeds 90%. In 2024, the container rail-water intermodal volume at national ports grew by approximately 15% YoY. The development of multimodal transport is accelerating, forming a modern logistics operation system of "corridor + hub + network." Wu Junyang, First-Class Inspector and Deputy Director of the Department of Trade and Economic Affairs at the NDRC, stated that the next step will involve deepening railway freight market reforms, innovating multimodal transport service products, accelerating the implementation of railway freight network projects and inland waterway connectivity projects, supporting qualified regions in building international logistics hub centers and bulk commodity resource allocation hubs, and achieving new and greater results in reducing logistics costs across society to better support the establishment of a new development pattern.

03 ★★ 

CDB: Continuing Medium and Long-Term Financing Support for Affordable Housing Construction and Supply

According to the China Development Bank (CDB), in 2024, the bank utilized the affordable housing relending policy to focus on supporting regions such as Guangxi, Jiangsu, Henan, Jilin, and Sichuan in acquiring completed commercial housing stock for use as allocation-based or rental-based affordable housing, helping related cities absorb nearly 10,000 units of commercial housing stock. Hu Guanghua, General Manager of the Housing and Urban Development Department at CDB, stated that the bank will continue to provide medium and long-term financing support for increasing affordable housing construction and supply, effectively addressing housing issues for the public, stabilizing the real estate market, and accelerating the establishment of a new model for real estate development.

04★★★

US Announces 10% Tariff Hike on Chinese Exports, Foreign Ministry and Ministry of Commerce Respond

On February 1, US President Trump signed an executive order imposing a 10% tariff on goods imported from China. This latest trade protection measure by the US has faced widespread opposition both internationally and domestically.

The White House stated on the same day that the US would impose a 10% tariff on all goods imported from China on top of existing tariffs. Trump said this aligns with the "protectionist measures" he supports.

A spokesperson for China's Foreign Ministry previously stated that China has repeatedly expressed its position, consistently believing that trade wars and tariff wars have no winners. China remains resolute in safeguarding its national interests. A spokesperson for the Ministry of Commerce also stated that China's stance on tariffs has been consistent, emphasizing that tariff measures are detrimental to both China and the US, as well as the entire world.

According to the executive order, the US will also impose a 25% tariff on goods imported from Mexico and Canada, with a 10% tariff specifically on Canadian energy products.

05★★★

State Council Tariff Commission: Imposing 10% or 15% Tariffs on Certain US-Origin Imports Starting February 10, 2025

On February 4, the State Council Tariff Commission announced that on February 1, 2025, the US government declared a 10% tariff hike on all Chinese exports to the US, citing issues such as fentanyl. The unilateral tariff hike by the US seriously violates WTO rules, does not help solve its own problems, and disrupts normal Sino-US economic and trade cooperation.

According to the Customs Law, Foreign Trade Law, and other relevant laws and regulations of China, as well as basic principles of international law, and with the approval of the State Council, China will impose tariffs on certain US-origin imports starting February 10, 2025. Details are as follows:

1. A 15% tariff on coal and liquefied natural gas.

2. A 10% tariff on crude oil, agricultural machinery, large-displacement vehicles, and pickup trucks.

3. Additional tariffs on US-origin goods listed in the annex, based on current applicable tariff rates. Existing bonded and tax exemption policies remain unchanged, and the additional tariffs will not be exempted.

★Industry and Downstream★

01 ★★★  

Yunnan to Launch Over 16 Million kW of New Energy Projects This Year

According to the Yunnan Provincial Development and Reform Commission, Yunnan's clean energy development will continue to accelerate in 2025, with over 16 million kW of new energy projects to be launched throughout the year. In 2024, Yunnan's clean energy development accelerated significantly, with 16.12 million kW of new energy capacity added during the year, bringing total new energy capacity to over 50 million kW, making it the province's second-largest power supply. The province's total installed power capacity exceeded 150 million kW. Meanwhile, power supply capacity continued to improve, with total annual power generation reaching 464.6 billion kWh, up 12% YoY, and total annual electricity consumption across society reaching 278.8 billion kWh, up 11% YoY.

02★★★

February 2025 Air Conditioner, Refrigerator, and Washing Machine Production Totals 29.14 Million Units, Up 30.6% YoY

According to the latest production schedule report for the three major white goods released by ChinaIOL, the total production of air conditioners, refrigerators, and washing machines in February 2025 reached 29.14 million units, up 30.6% YoY. By product, household air conditioner production reached 15.93 million units, up 35.6% YoY; refrigerator production reached 6.32 million units, up 29.2% YoY; and washing machine production reached 6.89 million units, up 21.3% YoY.

★Other Hot Topics★

⭕[Canada to Impose 25% Tariff on US Products Worth 155 Billion CAD]Canadian Prime Minister Trudeau announced on February 1 local time that, in retaliation for US tariffs, Canada will impose a 25% tariff on US products worth 155 billion CAD. Of this, 30 billion CAD worth of goods will take effect on February 4, and 125 billion CAD worth of goods will take effect within 21 days. Trudeau also stated that Canada is considering several non-tariff measures, including those involving critical minerals, energy procurement, and other partners. On February 1 local time, the US government announced a 25% tariff on imports from Canada and Mexico.

⭕[Mexican President Announces Tariffs on US]Mexican President Sheinbaum announced on February 1 local time that Mexico will impose tariffs on the US. On the afternoon of February 1 local time, US President Trump signed a tariff order, announcing a 25% tariff on Mexican exports to the US. Subsequently, President Sheinbaum stated that Mexico would take countermeasures and instructed Mexico's Minister of Economy, Ebrard, to activate the government's previously prepared "Plan B" to impose tariffs on US exports to Mexico.

⭕[Thai Government Reports Progress on China-Thailand Railway Project: Full Line to Be Operational by 2030]Thai government spokesperson Jirayu Houngsub announced on January 29 local time that the first phase of the China-Thailand Railway, the "Bangkok-Korat" section, has completed over one-third of its overall progress, while the second phase, the "Korat-Nong Khai" section, has completed its design work. The full line is expected to be operational by 2030.