[SMM Steel Market Morning News] Does China and the US plan to discuss the special tariffs imposed by the US on China on the grounds of fentanyl? Foreign Ministry responds

★Macro★

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[Will China and the US discuss the special tariffs imposed by the US on Chinese exports on the grounds of fentanyl? Foreign Ministry responds]

On May 13, Foreign Ministry spokesperson Lin Jian hosted a regular press conference. A reporter from AFP asked if the spokesperson could provide details on the next stage of China-US economic and trade talks, and whether there were plans to discuss the 20% special tariffs imposed by the US on Chinese exports on the grounds of fentanyl.

Lin Jian stated that the competent Chinese authorities had already released information regarding the high-level economic and trade talks between China and the US. Regarding the fentanyl issue, China has repeatedly made it clear that fentanyl is a US problem, not a Chinese one, and the responsibility lies with the US itself. The US has ignored China's goodwill and unreasonably imposed fentanyl tariffs on China, which has severely impacted China-US dialogue and cooperation in the field of drug control and also seriously harmed China's interests. "If the US truly wants to cooperate with China, it should stop smearing and shifting blame onto China and engage in dialogue with China on an equal, respectful, and mutually beneficial basis," Lin Jian said.

02

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[Beijing Financial Street Service Bureau: Supports BSE in continuously enriching its product lineup and exploring the launch of publicly issued convertible bonds]

The Beijing Financial Street Service Bureau, in line with the current policy requirements and orientations of the capital market regarding support for enterprise listings, has drafted the "Several Measures of Xicheng District, Beijing Municipality, on Strengthening the Ecosystem Construction of the Capital Market and Promoting the High-Quality Development of Publicly Listed Firms (Draft for Comment)." Among them, it is mentioned that full support will be provided to ensure the high-quality development of the Beijing Stock Exchange (BSE). Support will be given to the BSE in continuously enriching its product lineup. The BSE will be served and supported in building a high-standard government bond market, advancing the construction of the credit bond market, and exploring the launch of publicly issued convertible bonds. The BSE's index system will be enriched, index-based investment will be steadily expanded, and continuous research will be conducted on products such as the BSE's Exchange-Traded Funds (ETFs), Listed Open-Ended Funds (LOFs), Publicly Offered Real Estate Investment Trusts (REITs), and asset securitization.

★Industries and Downstream Sectors★

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[SMM Shenyang HRC Inventory]

This week, the HRC inventory in Shenyang was 104,300 mt.

This week, the HRC inventory in Shenyang was 104,300 mt, a decrease of 2,000 mt WoW, or -1.88%. It was also a decrease of 64,700 mt YoY, or -38.28%.

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[SMM Zhangjiagang HRC Inventory: Inventory decreased WoW this week]

This week, the HRC inventory in Zhangjiagang was 371,000 mt, a decrease of 23,000 mt WoW, or -5.84%. It increased by 10.42% on a solar calendar YoY basis and by 19.29% on a lunar calendar YoY basis.

 03

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[Information on the adjustment of product price policies for Ansteel and Bensteel Group in June 2025]

The product price policies of Ansteel for June 2025 are adjusted as follows based on the "Product Price Policies for May 2025":
1. Hot-rolled coil: Flat. 2. Pickling: Price reduced by 50 yuan/mt. Flat pricing for automotive steel.
3. Cold-rolled: Price reduced by 50 yuan/mt. Flat pricing for automotive steel. Additionally, flat pricing for Anshen's high-strength wire grades of 590MPa, 780MPa, 980MPa, and 1180MPa.
4. Cold-hardened: Price reduced by 50 yuan/mt.
5. Galvanizing: Price reduced by 50 yuan/mt.
6. Non-oriented silicon steel: Flat pricing.
7. Color-coated: Price reduced by 50 yuan/mt.
8. Medium-thickness plates: Price increased by 50 yuan/mt.
9. Wire rod: Price increased by 50 yuan/mt.
10. Rebar: Flat pricing.
11. Seamless: Flat pricing.
12. Alloy surcharges: Refer to the price list for details.
Angang Steel Marketing Center

Bensteel Group's product price policy for June 2025 is adjusted as follows based on the "May 2025 Product Price Policy":

1. Hot-rolled: Flat pricing.
2. Pickling: Price reduced by 50 yuan/mt. Flat pricing for automotive steel.
3. Cold-rolled: Price reduced by 50 yuan/mt. Flat pricing for automotive steel.
4. Cold-hardened: Price reduced by 50 yuan/mt.
5. Galvanizing: Price reduced by 50 yuan/mt.
6. Electro-galvanizing: Price reduced by 50 yuan/mt.
7. Non-oriented silicon steel: Flat pricing.
8. Wire rod: Price increased by 50 yuan/mt.
9. Rebar: Flat pricing.
10. Special steel: Flat pricing.
11. Alloy surcharges: Refer to the price list for details. Bensteel Sheets & Plates Marketing Center, Beiying Operations Center

04

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[SMM Hot-rolled Arrivals] Arrivals in the South China market have increased slightly.

Lecong Market: Shipments to Lecong have increased slightly on a WoW basis this week. Specifically, resources from North China remain stable, while shipments of local mainstream resources WG and DDH have both increased slightly WoW. Looking ahead, local mainstream resources are expected to maintain current shipment levels in the short term, with overall supply pressure remaining relatively small. Therefore, it is anticipated that arrivals in the Lecong market will remain low in the short term.

★Other Hot Topics★

⭕[India Plans Countermeasures: Imposing Tariffs on Some US Imports]

India has informed the World Trade Organization (WTO) that it intends to impose tariffs on certain products produced in the US and exported to India, in response to the US's tariffs on Indian steel and aluminum products.

⭕[US House Republicans' Tax Proposal: Raise Debt Ceiling by $4 Trillion, Omit Millionaire Income Tax Bracket Proposal]The US House Republicans have released the text of a tax legislation proposal, aiming to cut taxes by over $4 trillion over the next decade while reducing spending by at least $1.5 trillion. According to reports, the bill also seeks to raise the national debt ceiling by $4 trillion, lower than the Senate's preferred level of $5 trillion. After weeks of debate among Republicans on whether to raise tax rates for millionaires, the proposal does not include tax increases for the wealthiest Americans. The bill would permanently extend the 37% top individual tax rate set in Trump's 2017 tax law, despite Trump telling House Speaker Mike Johnson last week that he wanted a 39.6% rate for individuals earning over $2.5 million.

⭕[Zelensky Approves US-Ukraine Mineral Agreement]The Ukrainian President's website announced that President Zelensky has signed a law approving the "Agreement on the Establishment of the US-Ukraine Reconstruction Investment Fund."

⭕[Toyota's New Car Sales in China Up 20.8% in April, Honda and Nissan Decline]Japan's three major automakers released their new car sales figures in China for April on May 12. Toyota's sales increased by 20.8% YoY to 142,800 units, marking the third consecutive month of YoY growth. Honda and Nissan's sales declined for the 15th and 13th consecutive months YoY, respectively. Specifically, Honda's sales in China in April fell by 40.8% YoY to 43,689 units, while Nissan's sales decreased by 15.7% YoY to 46,295 units.