[SMM Steel Market Morning Brief] International Trade Negotiation Representative of the Ministry of Commerce: China and the US Reach Agreement Framework in Principle

★Macro★

01

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[China's International Trade Representative of the Ministry of Commerce: China and the US reach agreement framework in principle]

On June 10 local time, Li Chenggang, China's International Trade Representative and Vice Minister of Commerce, stated in London that during the first meeting of the China-US economic and trade consultation mechanism, both sides engaged in professional, rational, in-depth, and candid communication. In principle, both sides reached a framework for implementing the consensus reached during the phone call between the heads of state of the two countries on June 5, as well as the consensus reached during the Geneva talks.

02

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[Announcement: The State Council Information Office will hold a press conference on June 16 regarding the national economic performance in May 2025]

The State Council Information Office will hold a press conference at 10 a.m. on June 16, 2025 (Monday). Fu Linghui, spokesperson of the National Bureau of Statistics (NBS) and Director-General of the Department of Comprehensive Statistics of the National Economy, will introduce the national economic performance in May 2025 and answer questions from journalists.

★Industries and Downstream Sectors★

01

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[SMM blast furnace operating rate data]

According to the SMM survey, as of June 11, the blast furnace operating rate of 242 steel mills surveyed by SMM was 88.15%, down 0.11 percentage points MoM. The blast furnace capacity utilisation rate was 89.51%, down 0.05 percentage points MoM. The daily average pig iron production of the sampled steel mills was 2.4149 million mt, down 1,400 mt MoM.

02

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[SMM electric furnace operating rate data]

According to the SMM survey, as of June 10, the operating rate of 50 electric furnace steel mills nationwide, which mainly produce construction materials, was 34.64%, down 3.78% from the previous period MoM. The capacity utilisation rate was 37.15%, down 2.54% MoM. The daily average production of construction materials was 82,700 mt, down 5,600 mt MoM.

03

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[SMM inventory of construction materials in Hangzhou]

This week, the inventory of construction materials in Hangzhou was 666,000 mt, up 7,000 mt WoW from last Wednesday, representing a 1.06% increase MoM.

04

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[China Passenger Car Association: From June 1-8, retail sales of new energy passenger vehicles nationwide reached 202,000 units, up 40% YoY compared to the same period in June last year]

According to data from the China Passenger Car Association, from June 1-8, retail sales of new energy passenger vehicles nationwide reached 202,000 units, up 40% YoY compared to the same period in June last year and up 4% MoM compared to the same period last month. The retail penetration rate of the new energy market was 58.8%. Cumulative retail sales since the beginning of the year reached 4.559 million units, up 34% YoY. From June 1-8, wholesale shipments of new energy vehicles by passenger car producers nationwide reached 166,000 units, up 5% YoY compared to the same period in June last year and down 6% MoM compared to the same period last month. The wholesale penetration rate of new energy producers was 53.5%. Cumulative wholesale shipments since the beginning of the year reached 5.373 million units, up 39% YoY.

05

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[CPCA: From June 1 to 8, nationwide retail sales of passenger vehicles reached 343,000 units, up 19% YoY compared to the same period in June last year]

According to data from the China Passenger Car Association (CPCA), from June 1 to 8, nationwide retail sales of passenger vehicles reached 343,000 units, up 19% YoY compared to the same period in June last year, and down 12% MoM compared to the same period last month. Cumulative retail sales since the beginning of the year reached 9.159 million units, up 10% YoY. From June 1 to 8, nationwide wholesale shipments of passenger vehicles by producers reached 311,000 units, up 10% YoY compared to the same period in June last year, and down 2% MoM compared to the same period last month. Cumulative wholesale shipments since the beginning of the year reached 11.1 million units, up 12% YoY.

06

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[CAAM: Both auto production and sales in May achieved double-digit YoY growth]

Data released by the China Association of Automobile Manufacturers (CAAM) showed that in May 2025, China's auto production and sales reached 2.649 million units and 2.686 million units, respectively, up 1.1% MoM and 3.7% MoM, and up 11.6% YoY and 11.2% YoY, respectively. From January to May, auto production and sales reached 12.826 million units and 12.748 million units, respectively, up 12.7% YoY and 10.9% YoY, respectively. In terms of new energy vehicles (NEVs), production and sales in May reached 1.27 million units and 1.307 million units, respectively, up 35% YoY and 36.9% YoY, respectively. NEV sales accounted for 48.7% of total new vehicle sales. From January to May, NEV production and sales reached 5.699 million units and 5.608 million units, respectively, up 45.2% YoY and 44% YoY, respectively. In terms of exports, China exported 551,000 vehicles in May, up 6.6% MoM and 14.5% YoY. From January to May, total vehicle exports reached 2.49 million units, up 7.9% YoY.

★Other Hot Topics★

⭕[The Ministry of Housing and Urban-Rural Development held talks with department heads from some provinces and cities on preventing gas safety accidents]

Recently, the Urban Construction Department of the Ministry of Housing and Urban-Rural Development, together with the Discipline Inspection and Supervision Group stationed at the Ministry and the Department of Engineering Quality and Safety Supervision, held talks with department heads from two provinces and two cities on preventing gas safety accidents. The talks pointed out that gas safety concerns the safety and well-being of the people. The occurrence of accidents has exposed weaknesses in the rectification of gas safety issues in relevant regions, and key tasks such as cracking down on "illegal gas" and "illegal gas cylinders" and preventing third-party construction damage to gas pipelines need to be further implemented. The talks required that lessons be learned deeply from the accidents, and targeted work measures be taken to improve the level of gas safety management. In combination with the centralized rectification of improper conduct and corruption issues among the people, continuous efforts should be made to carry out special rectifications of gas safety and the renovation and upgrading of aging gas pipelines, so as to effectively safeguard the lives and property of the people.

⭕[Over 10 automakers have announced the unification of supplier payment terms to within 60 days]

Recently, over 10 automotive enterprises have successively announced the unification of supplier payment terms to within 60 days, taking concrete actions to accelerate the efficiency of capital turnover in the industry chain and promote the healthy and sustainable development of the automotive industry. As of now, BYD, China FAW Group, Dongfeng Motor, Geely Auto Group, GAC Group, Seres Group, Changan Automobile, Chery Group, Great Wall Motor, XPeng Motors, and Xiaomi Auto have all recently made announcements, stating that they will unify supplier payment terms to within 60 days. Industry insiders believe that these measures are conducive to ensuring the stability of the industry chain and supply chain and promoting the coordinated development of upstream and downstream enterprises in the industry chain.