[SMM Steel Market Morning Briefing] The People's Bank of China will strengthen macro-control efforts and introduce a package of monetary policy measures, mainly comprising three categories and ten policies.

★Macro★

01

 ★★★ 

[PBOC: Reduces Individual Housing Provident Fund Loan Interest Rates by 0.25 Percentage Points from May 8]

The People's Bank of China (PBOC) issued a notice regarding the reduction of individual housing provident fund loan interest rates. The PBOC has decided to reduce the individual housing provident fund loan interest rates by 0.25 percentage points from May 8, 2025. The interest rates for first-home individual housing provident fund loans with terms of 5 years or less (including 5 years) and over 5 years will be adjusted to 2.1% and 2.6%, respectively. The interest rates for second-home individual housing provident fund loans with terms of 5 years or less (including 5 years) and over 5 years will be adjusted to no less than 2.525% and 3.075%, respectively.

02

 ★★★ 

[PBOC: Cuts Standing Lending Facility Rate by 10 Basis Points]

The PBOC updated the Standing Lending Facility (SLF) interest rate table. From May 8, 2025, the overnight, 7-day, and 1-month SLF interest rates will be adjusted to 2.25%, 2.40%, and 2.75%, respectively, all down by 10 basis points from the previous rates.

03

★★★

[PBOC: Reduces Reserve Requirement Ratio for Financial Institutions by 0.5 Percentage Points from May 15]

The PBOC has decided to reduce the reserve requirement ratio (RRR) for financial institutions by 0.5 percentage points from May 15, 2025 (excluding financial institutions that already implement a 5% RRR). The RRR for auto finance companies and financial leasing companies will be reduced by 5 percentage points.

★Industry and Downstream Sectors★

01

 ★★★ 

[SMM Blast Furnace Operating Rate Survey]

According to an SMM survey, as of May 7, the blast furnace operating rate among 242 steel mills surveyed by SMM was 88.96%, up 0.07 percentage points WoW. The blast furnace capacity utilisation rate was 91.10%, up 0.16 percentage points WoW. The daily average pig iron production of the sampled steel mills was 2.4579 million mt, up 4,400 mt WoW.

02

 ★★★ 

[SMM Weekly Maintenance Statistics]

According to SMM statistics, for the week (from May 3 to May 9), the impact of blast furnace maintenance on pig iron production was 806,600 mt, a decrease of 20,500 mt compared to the impact of maintenance in the previous week. For the next week (from May 10 to May 16), the impact of blast furnace maintenance on pig iron production is expected to be 889,700 mt, an increase of 83,100 mt compared to this week.

03

  ★★  

[Zhuhai: Encourages "Trade-in" for Housing, with Maximum Subsidy Amount of No More Than 30,000 Yuan per Unit]

Zhuhai recently issued "Several Measures to Promote High-Quality Development of the Real Estate Market in Zhuhai City," which proposes encouraging "trade-in" for housing.Residents participating in the "trade-in" program for housing will be granted a special housing purchase subsidy equivalent to 1% of the online-signed contract price of the newly purchased home. The maximum subsidy amount per housing unit will not exceed 30,000 yuan, and the subsidy policy will be valid for one year. Efforts will be made to establish a unified platform for the "trade-in" program for housing, synchronously linking it with the government's online approval process to enable "one-stop" online handling of business transaction procedures. The cross-bank processing of the "transfer with mortgage" business will be vigorously promoted. For taxpayers who sell their self-owned homes in Zhuhai and repurchase a home in Zhuhai within one year, the individual income tax paid upon the sale of their self-owned homes will be refunded in accordance with national policy provisions.

04

 ★★

[Multiple Regions Follow Suit, Officially Announcing Reductions in Housing Provident Fund Loan Interest Rates, with the Lowest Rate Dropping to 2.1%]

On May 7, housing provident fund management centers in Sichuan, Anhui, Hainan, Shanghai, Chongqing, Changsha, Shijiazhuang, and other regions issued announcements, declaring adjustments to individual housing provident fund loan interest rates starting from May 8. The interest rates for first-home individual housing provident fund loans with terms of five years or less (including five years) and over five years will be lowered to 2.1% and 2.6%, respectively. The interest rates for second-home individual housing provident fund loans with terms of five years or less (including five years) and over five years will be lowered to 2.525% and 3.075%, respectively. For individual housing provident fund loans issued on or after May 8, the new interest rates will apply. For outstanding individual housing provident fund loans issued before May 8, the new interest rates will take effect from January 1, 2026. It is understood that on May 7, the People's Bank of China issued an announcement, deciding to lower the individual housing provident fund loan interest rates by 0.25 percentage points starting from May 8.

05

 ★★

[Guangdong: No Less Than 600 Old Residential Communities to Undergo Renovation and Construction to Start in 2025, with 26,500 Old Residential Elevators to Be Upgraded]

The General Office of the People's Government of Guangdong Province recently issued the Implementation Plan for Special Actions to Boost Consumption in Guangdong Province. Among the measures mentioned is the better satisfaction of housing consumption demands. The policy allowing local government special bonds to be used as capital will be effectively utilized to actively, steadily, and orderly advance the renovation of urban villages under the new model. Solid progress will be made in the renovation of old residential communities, with no less than 600 old residential communities to undergo renovation and construction to start in 2025, and the upgrading of 26,500 old residential elevators will be initiated. The supply of affordable housing will be expanded, and the policy of using special bonds to support cities in acquiring existing commercial housing for use as affordable housing will be effectively implemented. The national "Residential Project Specifications" will be implemented, optimizing housing construction standards, improving the construction quality of newly built commercial housing, and accelerating the construction of safe, comfortable, green, and intelligent "high-quality homes." The policy on the use of housing provident funds will be continuously optimized, supporting contributors in applying for individual housing provident fund loans while withdrawing housing provident funds to pay for the down payment on home purchases. The policy measures for withdrawing housing provident funds for rental purposes will be further optimized, and the pilot work on including flexible workers in the housing provident fund system will be continuously advanced.

★Other Hot Topics★

⭕【Guangdong: Encouraging Guangzhou and Shenzhen to Further Ease Vehicle Purchase Restrictions and Increase Car Purchase Quotas】The General Office of the People's Government of Guangdong Province issued a notice on the implementation plan for special actions to boost consumption in Guangdong Province, aiming to systematically reduce consumption restrictions. The province will leverage its autonomy in real estate regulation, urging and guiding local governments to comprehensively review existing restrictive measures in areas such as purchase, transfer, credit, and pricing, and cancel or adjust them according to local conditions to promote the stabilization and recovery of the real estate market. Guangzhou and Shenzhen are encouraged to further ease vehicle purchase restrictions and increase car purchase quotas. Shenzhen is guided to implement the practice of allowing individuals who have failed to win a license plate lottery for an extended period to directly apply for ordinary vehicle quotas, facilitating the shift from purchase management to usage management in automobile and other consumption sectors. The province will ensure equal participation of various business entities in social group procurement, without setting procurement thresholds in disguised forms such as ownership or merchant ratings. It will support large commercial enterprises in conducting outdoor sales promotions on their own premises after completing relevant approval and licensing procedures, appropriately allowing vehicle parking, increasing nighttime parking spaces, and designating taxi waiting areas.

⭕【Geely Auto: Proposes to Privatize Zeekr at $2.57 per Share】Geely Auto announced that on May 7, 2025, the company submitted a non-binding offer letter to Zeekr, proposing to privatize Zeekr by acquiring all issued and outstanding shares of Zeekr and American Depositary Shares (ADSs) (excluding those beneficially owned by the Group). The proposed purchase price is $2.57 per Zeekr share or $25.66 per ADS. This price represents a premium of approximately 13.6% over the closing trading price of the ADSs on the New York Stock Exchange (NYSE) on the last trading day and a premium of 20.0% over the volume-weighted average price of the ADSs on the NYSE during the last 30 trading days ending on the last trading day. As of the announcement date, the Group holds approximately 65.7% of the total issued and outstanding share capital of Zeekr. If the privatization proposal is implemented and completed, Zeekr will become a wholly-owned subsidiary of the Company, achieving privatization and delisting from the NYSE.

⭕【SAIC Volkswagen's Terminal Sales Nearly 83,000 Units in April, Up 5.9% YoY】According to SAIC Volkswagen, the company's terminal sales in April reached nearly 83,000 units, up 5.9% YoY. Among them, the Tiguan family's terminal sales were nearly 14,000 units, and the Passat family's terminal sales were nearly 18,000 units.

⭕【CAAM: Total Import and Export Value of Automotive Products Increased 32.1% MoM in March】According to data compiled by the China Association of Automobile Manufacturers (CAAM) from the General Administration of Customs, in March 2025, the total import and export value of automotive products was $23.82 billion, up 32.1% MoM and down 0.2% YoY.The import value was $3.67 billion, up 3.8% MoM and down 30.4% YoY. The export value was $20.15 billion, up 38.9% MoM and up 8.4% YoY. From January to March 2025, the total cumulative import and export value of China's automotive commodities reached $65.14 billion, down 4.6% YoY. Among this, the import value was $10.14 billion, down 35.6% YoY, and the export value was $55 billion, up 4.6% YoY.

⭕【CPCA: Estimated wholesale sales of passenger NEVs by producers nationwide in April reached 1.14 million units, up 42% YoY】Based on comprehensive estimates from preliminary monthly CPCA data: In April, the wholesale sales of passenger NEVs by producers nationwide reached 1.14 million units, up 42% YoY and up 1% MoM. The comprehensive estimate for the cumulative wholesale sales from January to April this year is 4 million units, up 42% YoY.