[SMM Steel Market Morning Briefing] China and the US Issue Joint Statement on Geneva Economic and Trade Talks, Substantial Progress Made in High-Level Economic and Trade Talks Between China and the US

★Macro★

01

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[China and the US Issue Joint Statement on Geneva Economic and Trade Talks, Achieving Substantial Progress in High-Level Economic and Trade Talks]

The Government of the People's Republic of China ("China") and the Government of the United States of America ("the US"),

recognizing the importance of bilateral economic and trade relations to both countries and the global economy;

recognizing the importance of sustainable, long-term, and mutually beneficial bilateral economic and trade relations;

in light of recent discussions between the two sides, believing that continued consultations will help resolve issues of concern in the economic and trade fields;

in the spirit of mutual openness, continuous communication, cooperation, and mutual respect, continuing to advance relevant work;

both sides commit to taking the following measures before May 14, 2025:

The US will (i) revise the ad valorem tariffs imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and the Macao Special Administrative Region) as stipulated in Executive Order 14257 of April 2, 2025, with a 24% tariff suspended for the initial 90 days, while retaining the right to impose the remaining 10% tariff on these goods as stipulated in the Executive Order; (ii) cancel the tariff hikes on these goods imposed under Executive Order 14259 of April 8, 2025, and Executive Order 14266 of April 9, 2025.

China will (i) correspondingly revise the ad valorem tariffs imposed on US goods as stipulated in Announcement No. 4, 2025, of the Customs Tariff Commission, with a 24% tariff suspended for the initial 90 days, while retaining the right to impose the remaining 10% tariff on these goods, and cancel the tariff hikes on these goods imposed under Announcement No. 5 and No. 6, 2025, of the Customs Tariff Commission; (ii) take necessary measures to suspend or cancel non-tariff countermeasures against the US implemented since April 2, 2025.

After taking the above measures, both sides will establish a mechanism to continue consultations on economic and trade relations. The Chinese representative is He Lifeng, Vice Premier of the State Council, and the US representatives are Secretary of the Treasury Scott Bessent and US Trade Representative Jamieson Greer. Consultations may take place in China, the US, or a third country agreed upon by both sides. As needed, both sides may conduct working-level consultations on relevant economic and trade issues.

02

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[Opinions on Financial Support for Deepening Comprehensive Cooperation between Guangdong, Hong Kong, and Macao in Guangzhou Nansha with a Global Perspective Issued]

The People's Bank of China released the Implementation Report on China's Monetary Policy for the First Quarter of 2025. The People's Bank of China, the National Financial Regulatory Administration, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and the People's Government of Guangdong Province jointly issued the Opinions on Financial Support for Deepening Comprehensive Cooperation between Guangdong, Hong Kong, and Macao in Guangzhou Nansha with a Global Perspective.We will adhere to the fundamental principle of serving the real economy through financial services, maintain risk prevention and control as an eternal theme in financial work, uphold the general work approach of seeking progress while ensuring stability, and adhere to the strategy of "rooting in the Greater Bay Area, collaborating with Hong Kong and Macao, and facing the world." We will increase financial support for the construction of Nansha, further strengthen its role as a driving force for high-quality development in the Guangdong-Hong Kong-Macao Greater Bay Area, and build Nansha into a pilot demonstration window for China's financial industry opening up to the outside world, a carrier zone for financial innovation functions, and an important period for the international financial hub of the Guangdong-Hong Kong-Macao Greater Bay Area.

★Industries and Downstream Sectors★

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[China's Auto Production and Sales Exceed 10 Million Units Each for the First Time from January to April]

Data released by the China Association of Automobile Manufacturers (CAAM) on the 12th showed that in April this year, China's auto production and sales reached 2.619 million units and 2.59 million units respectively, up 8.9% and 9.8% YoY, and down 12.9% and 11.2% WoW respectively. In the first four months of this year, China's auto production and sales both exceeded 10 million units for the first time in history. According to statistics, from January to April this year, China's auto production and sales reached 10.175 million units and 10.06 million units respectively, up 12.9% and 10.8% YoY. Among them, the production and sales of new energy vehicles (NEVs) reached 4.429 million units and 4.3 million units respectively, up 48.3% and 46.2% YoY, with NEV sales accounting for 42.7% of total new car sales. In terms of exports, from January to April this year, auto exports reached 1.937 million units, up 6% YoY. Among them, NEV exports reached 642,000 units, up 52.6% YoY.

02

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[SMM Iron Ore Shipping Data] Global Shipments Continue to Decline Slightly, While Port Arrivals Increase Slightly

The total global iron ore shipments by SMM were 31.62 million mt, a decrease of 740,000 mt or 2.3% WoW. Among them, shipments from Australia were 17.46 million mt, down 8.3% WoW; shipments from Brazil were 7.75 million mt, up 13.2% WoW; and shipments from non-mainstream mines were 6.42 million mt, up 11.6% WoW. The total iron ore port arrivals in China by SMM were 26.81 million mt, an increase of 1.51 million mt or 5.96% WoW, and up 14% YoY.

03

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[SMM Coal Shipping] Total Coal Port Arrivals by SMM Reach 7.101 Million mt

By port, the total coal port arrivals by SMM were 7.101 million mt, down 12% WoW. Among them, the total port arrivals in Guangzhou Port were 1.339 million mt, accounting for 19% of the total port arrivals, up 46% WoW.

04

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[SMM Steel Shipping] China's Total Steel Exports Decline 18% WoW Last Week

[SMM Steel Shipping] China's Total Steel Exports Decline 18% WoW Last Week

★Other Hot Topics★

⭕[A Meeting on Strengthening the Full-Chain Management and Control of Strategic Mineral Exports is Held]

To thoroughly implement the decisions and deployments of the CPC Central Committee and the State Council, on May 12, 2025, the Office of the National Export Control Coordination Mechanism organized the Ministry of Commerce, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of State Security, the Ministry of Natural Resources, the Ministry of Transport, the State-owned Assets Supervision and Administration Commission of the State Council, the General Administration of Customs, the State Administration for Market Regulation, the State Post Bureau, and local authorities from strategic mineral resource-rich provinces such as Inner Mongolia, Jiangxi, Hunan, Guangdong, Guangxi, Guizhou, and Yunnan to hold a meeting on strengthening the full-chain management and control of strategic mineral exports in Changsha City, Hunan Province.

The meeting pointed out that export controls on strategic minerals are crucial to national security and development interests, and strengthening the management and control of the entire export chain is key. All departments and localities should enhance training, guidance, and routine supervision of relevant business entities within their respective fields and regions. They should adhere to the principle of "prevention first, response early," closely track the flow of strategic minerals, strengthen information analysis and sharing, promptly issue warnings and take relevant measures, and strictly prevent the illegal outflow of strategic minerals.

The meeting emphasized that all departments should closely coordinate, fulfill their regulatory responsibilities in accordance with their respective duties, and earnestly strengthen the management and control of the entire chain of strategic minerals, including mining, smelting, processing, transportation, manufacturing, sales, and export. Local people's governments should strengthen their local regulatory responsibilities, systematically investigate and establish ledgers for enterprises involved in all aspects of the strategic minerals export chain within their regions, guide local enterprises in strengthening the construction of compliance systems, enhance enterprises' awareness and capabilities of compliance, and work together to ensure the effective implementation of management and control measures.

The meeting required that all departments and localities should strengthen horizontal coordination and vertical collaboration, and promote the effective implementation of the management and control work of the entire strategic minerals export chain with a resolute attitude and forceful measures, so as to resolutely safeguard national security and development interests.

⭕[Five Departments: Increase Support for Marine Industry, Commercial Aerospace, and Fully Autonomous Industries in Nansha, Guangzhou] The People's Bank of China (PBOC), the National Financial Regulatory Administration, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and the People's Government of Guangdong Province jointly issued the "Opinions on Financial Support for Nansha, Guangzhou, to Deepen Comprehensive Cooperation with Hong Kong and Macao Facing the World." Among the measures proposed is support for the development of the marine industry and future-oriented industries. Financial institutions are encouraged to increase support for the marine industry, commercial aerospace, and fully autonomous industries, under the premise of legal compliance and risk controllability. Equity investment funds are encouraged to invest in high-tech marine industries, and strengthen financial services for major marine infrastructure construction projects and marine-related enterprises. Insurance institutions are supported to develop marine insurance in accordance with market principles.

⭕[Japanese Prime Minister: Japan Will Take "All Necessary Measures" to Respond to US Tariff Policy] In response to the recent tariff policy of the US, Japanese Prime Minister Shigeru Ishiba stated at a meeting of the Budget Committee of the House of Representatives in Japan on the 12th local time that the Japanese government will take "all necessary measures" to respond, and will not hesitate to take additional measures if necessary. In addition, Ishiba stated that it is "unacceptable" to reach an agreement with the US on other aspects except automobiles in the Japan-US tariff negotiations.

⭕[Multiple Regions Release Housing Development Plans, Focusing on the Construction of "High-Quality Housing"] Recently, the "2025 Annual Housing Development Plan of Beijing" released by the Beijing Municipal Commission of Housing and Urban-Rural Development mentioned that 240 to 300 hectares of land for commercial housing will be supplied in 2025, 50,000 sets of affordable rental housing will be constructed and prepared, and 80,000 sets of various types of affordable housing will be completed, accelerating the pace of constructing "high-quality housing."Prior to this, cities such as Guangzhou and Chengdu had also released their housing development plans for 2025. Many localities have expressed their intention to accelerate the construction of "high-quality homes." Industry insiders have stated that it is expected that the detailed indicators for the construction of "high-quality homes" will be released and implemented more rapidly across various regions.