[SMM Steel Market Morning News] US Fed Keeps Interest Rates Unchanged for Four Consecutive Times

★Macro★

01

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HKMA Responds to US Fed's Interest Rate Decision

On June 18 local time, the US Fed decided to maintain the target range for the federal funds rate at 4.25% to 4.50%. This marks the fourth consecutive meeting where the US Fed has decided to keep interest rates unchanged. On June 19, the Hong Kong Monetary Authority (HKMA) stated that the US Fed's decision to maintain interest rates was in line with market expectations. The dot plot released after this meeting suggests that the US Fed may cut interest rates by a total of 50 basis points within this year. However, the market generally believes that there is still significant uncertainty regarding the future pace of interest rate cuts by the US Fed, depending on the trends in US inflation and employment data, as well as the impact of tariff measures and other economic policies on economic activity.
The HKMA stated that in Hong Kong, the monetary and financial markets continue to operate in an orderly manner. There is considerable uncertainty regarding the magnitude and pace of future interest rate cuts in the US, and the current interest rate environment in Hong Kong may change due to these variables. The public should fully consider the possibility of a rebound in Hong Kong dollar interest rates when making decisions on property purchases, investments, or borrowing, and manage the associated risks. The HKMA will continue to closely monitor market changes and maintain monetary and financial stability.

02

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Putin: Russian and Ukrainian Negotiating Teams Ready to Hold Talks After June 22

According to Xinhua News Agency, Russian President Vladimir Putin stated on the 18th that the negotiating teams of Russia and Ukraine are ready to hold talks after June 22. Russia is communicating with Ukraine and needs to find a long-term solution to the Ukrainian crisis. During a meeting with the heads of major world news agencies at the 28th St. Petersburg International Economic Forum, Putin said that Russia is willing to end the conflict in Ukraine as soon as possible, and "it would be best to do so peacefully." However, if an agreement cannot be reached peacefully, Russia will achieve its goals through military means. Russia will not allow Ukraine to have armed forces that could pose a threat to Russia. Putin emphasized that he is willing to hold talks with anyone, including Ukrainian President Zelensky. A meeting between him and the Ukrainian leadership "is possible" in the final stage of the Russia-Ukraine negotiations, so that "a full stop can be put." He called on Ukraine not to delay the negotiations.

★Industries and Downstream Sectors★

01

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[SMM Rebar Inventory]

This week, the total rebar inventory was 5.1853 million mt, a decrease of 75,100 mt WoW, down 1.43% MoM, and down 29.21% YoY (Lunar Calendar). This week, the social inventory of rebar was 3.3399 million mt, a decrease of 60,200 mt WoW, down 1.77% MoM, and down 36.47% YoY (Lunar Calendar). This week, the in-plant inventory of rebar was 1.8454 million mt, a decrease of 14,900 mt WoW, down 0.80% MoM, and down 10.74% YoY (Lunar Calendar).

This week, the total wire rod inventory was 1.0607 million mt, a decrease of 38,700 mt WoW, down 3.52% MoM, and down 43.66% YoY (Lunar Calendar). This week, the social inventory of wire rod was 536,600 mt, a decrease of 30,100 mt WoW, down 5.31% MoM, and down 36.64% YoY (Lunar Calendar). This week, the in-plant inventory of wire rod was 524,100 mt, a decrease of 8,600 mt WoW, down 1.62% MoM, and down 49.39% YoY (Lunar Calendar).

02

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[Cui Dongshu: National Passenger Vehicle Market Inventory at 3.45 Million Units and 54 Days of Inventory at the End of May]

Cui Dongshu, Secretary General of the China Passenger Car Association, stated in an article that at the end of May 2025, the inventory of the national passenger vehicle industry was 3.45 million units, a decrease of 50,000 units MoM and an increase of 160,000 units compared to May 2024, indicating a sustained high level of inventory. The current policy initiatives have brought overall optimism among producers, with relatively high production under the trade-in policy and relatively active wholesale activities by manufacturers, leading to the industry inventory reaching a new high in nearly two years. With the promotion of central government policies to stimulate consumption and the active marketing activities such as auto shows across the country, as sales gradually enter the off-season from June to August, sales are expected to decline over the next three months. Therefore, based on the inventory at the end of May 2025 and future sales projections, the existing inventory is estimated to support future sales for 54 days, slightly increasing the overall inventory pressure compared to 54 days in May 2023 and 51 days in May 2024.

03

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Guangzhou Accelerates Acquisition of Existing Homes, Purchasing Over 6,000 Units for Resettlement

With the support of special loans, as of May, Guangzhou has purchased over 6,000 existing homes for resettlement. For reference, the average monthly trading volume of new homes in Guangzhou in the first five months of this year was 5,213 units. Although Guangzhou has not yet disclosed the approximate budget and number of existing commercial homes to be acquired, it is clear that the acquisition efforts are continuing.

04

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Two Residential Plots in Chengdu Sold for 3.837 Billion Yuan, with Premium Rate Exceeding 75% in Jinjiang District

On June 19, the main urban area of Chengdu witnessed the auction of two residential plots. According to the auction results, both plots were sold at a premium, with the premium rate for the plot in Jinjiang District exceeding 75%. The transaction floor price also set a new record, ranking among the top two in Chengdu's residential land transactions. The two plots generated a total revenue of approximately 3.837 billion yuan. According to the plot information, the two plots auctioned this time are located in the Western Zhigu Block of Wuhou District and the Dongdajie Block of Jinjiang District, with a total land area of 62,114.81 m² and a total planned construction area of 156,571.46 m². The total starting price was 2.616 billion yuan.

05

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Shanghai's Fifth Batch of Land Auctions This Year: First-Day Transaction Amount Exceeds 19.1 Billion Yuan

The fifth batch of land auctions in Shanghai in 2025 was held on June 19. A total of six plots were auctioned in this batch, divided into two days, with five plots auctioned on the 19th, located in Qingpu, Minhang, Baoshan, Yangpu, and Jinshan districts, and one plot auctioned on the 20th, located in the Pudong New Area. On the first day of the land auction, the total starting price for the five plots was 17.765 billion yuan. Ultimately, all five plots were sold, with four plots sold at a premium and one at the base price, generating a total revenue of 19.157 billion yuan.

★Other Hot Topics★

⭕[Yellow Rainstorm Warning: Heavy to Extremely Heavy Rainfall Expected in Six Provincial Regions Including Anhui and Jiangsu]The Central Meteorological Observatory continued to issue a yellow rainstorm warning at 10:00 on June 19: It is expected that from 14:00 on June 19 to 14:00 on June 20, heavy to extremely heavy rainfall will occur in southern and central-eastern Shandong, central-northern Jiangsu, central-northern Anhui, southeastern Henan, central-southern and eastern Hubei, eastern Chongqing, northern Hunan, eastern and southern Guizhou, eastern Yunnan, and northern Guangxi. Among these areas, extremely heavy rainfall (250–280 mm) is expected in parts of central Anhui, central Jiangsu, northeastern and southwestern Hubei, northern Hunan, southern Guizhou, and northwestern Guangxi. Some of these areas will be accompanied by short-term heavy rainfall (maximum hourly rainfall of 20–50 mm, locally exceeding 80 mm), and there may be severe convective weather such as thunderstorms and gales in some areas.

⭕[Guangxi: Suspension of Subsidies for Trade-in of Consumer Goods After June 20]On June 18, the Department of Commerce of the Guangxi Zhuang Autonomous Region issued the "Notice on Suspending the 2025 Guangxi Subsidy Program for Trade-in of Consumer Goods." The notice states that to ensure the continued implementation of the trade-in policy, the Department of Commerce is adjusting the subsidy program: Starting from 24:00 on June 20, 2025, subsidy programs for vehicle replacement, home appliance trade-in, purchase of new 3C digital products, e-bike trade-in, and home renovation and kitchen/bathroom "refresh" will be suspended. For consumers participating in the vehicle replacement subsidy program, they need to complete the procedures for purchasing a new vehicle (based on the issuance time of the uniform invoice for motor vehicle sales) and submit the uniform invoice for motor vehicle sales through the special area for vehicle replacement activities on UnionPay before 24:00 on June 20 to lock their quota. After locking the quota, they need to submit complete application materials before 24:00 on July 20, 2025. Applications that fail to submit materials within the specified timeframe will not be accepted. The subsidy program for vehicle scrappage and renewal will continue to be implemented according to the original policy.

⭕[Total Investment of 2.78 Billion Yuan: Hainan's Largest Green Mine Project Commences Operation]The "Hongyandui-Baogu Village" mining area construction stone project in Yazhou District, Sanya, a demonstration project for the integration of farmland and land in Hainan State Farms, officially commenced operation on June 18. This project is Hainan's largest green mine project, with a total investment of 2.78 billion yuan, a mining area of 0.94 square kilometers, recoverable reserves of 45.78 million m³, a designed annual capacity of 9.9 million mt, and an operating period of 20 years.