[SMM Steel Market Morning News] The composite PMI output index for June was 50.7%, up 0.3 percentage points from the previous month

★Macro★

01 ★★★ [June composite PMI output index stood at 50.7%, up 0.3 percentage points MoM]

NBS data showed the composite PMI output index continued expanding. In June, the composite PMI output index reached 50.7%, rising 0.3 percentage points MoM, indicating accelerated overall expansion in Chinese enterprises' production and business activities. The manufacturing production index and non-manufacturing business activity index, which constitute the composite PMI output index, stood at 51.0% and 50.5% respectively.

02 ★★ [June China manufacturing PMI reached 49.7%, rising for two consecutive months]

China Federation of Logistics & Purchasing (CFLP) and NBS Service Industry Survey Center announced June's China PMI figures today (30th). The manufacturing PMI rose for two consecutive months, with manufacturing sector conditions improving and expansion scope widening. June's manufacturing PMI was 49.7%, up 0.2 percentage points MoM. Among 21 surveyed industries, 11 operated in expansion territory, four more than the previous month, indicating broader manufacturing sector recovery. As external disruptions eased in June, China's manufacturing sector returned to normal operation with stable release of endogenous economic drivers. Market demand reversed declines overall, with new orders index reaching 50.2% - returning to expansion territory after two months below 50%. Meanwhile, manufacturing exports gradually recovered, with new export orders index rising for two consecutive months.

03 ★★ [Real estate enterprise bond financing nears "recovery" with declining maturity repayments]Real estate companies' bond financing is approaching a "recovery" threshold. In June, Seazen Group launched US dollar-denominated bond issuance - the first pure private real estate company to issue such bonds this year, boosting market confidence. Notable developments in real estate bond issuance emerged in H1: quality private enterprises like Midea Real Estate and Binjiang Real Estate successfully raised funds through bond offerings. For instrument selection, Poly Developments adopted private placement convertible bonds, marking the largest real estate bond issuance this year. Overall, the sector's net bond financing scale is balancing, with maturing debts decreasing annually in the next two years, facilitating lighter operational burdens for the industry.

★Industrial & Downstream★

01 ★★★  [Jiang Wei: Association proposes billet export restrictions to relevant ministries]

Wei Jiang, Deputy Secretary General and Vice President of China Iron and Steel Association (CISA), stated: China's billet exports in the first four months of 2025 already exceeded the total for 2023, which has contributed to ore price increases to some extent. Billet, as a semi-finished product, saw a surge in exports, wasting China's abundant deep-processing capacity, consuming domestic non-renewable energy and materials, leaving pollutants and carbon emissions, hindering the steel industry's upgrade, and exacerbating low-level market competition. The association has proposed to relevant national ministries to restrict billet exports.

02★★★[Thailand Initiates Circumvention Investigation Against China's CRC]

The Department of Foreign Trade (DFT) announced the initiation of a circumvention investigation on cold-rolled steel sheet products (coils and non-coils, CRS and CRC) imported from China. The investigation was launched in response to a complaint by domestic producer Thai Cold Rolled Steel Sheet Public Co., Ltd., which alleged that Chinese exporters circumvented anti-dumping duties, causing substantial harm to the domestic industry. The accused Chinese exporters include Baoshan Iron & Steel Co., Ltd., Baosteel Group, and Maanshan Group.

The products under investigation fall under Thailand Customs Tariff Code 7225.50.90.090.

03 ★★ [China Completes 408.97 Billion Yuan in Water Conservancy Construction Investment, January-May]

On June 30, the Ministry of Water Resources reported that China has been advancing water conservancy infrastructure construction this year. From January to May, national water conservancy infrastructure construction progressed smoothly, with a total investment of 408.97 billion yuan completed.

04 ★★★[Chengdu Land Market Raises 44 Billion Yuan in H1, Up Over 100% YoY]

Chengdu's land market raised 44 billion yuan in H1, up over 100% YoY compared to H1 2024. On June 30, the Chengdu land auction market concluded its H1 performance. A 52-mu residential plot in the Chahua area of Jinniu District was successfully auctioned, with a starting floor price of 16,300 yuan/m². China Energy Engineering Group won the bid at 20,200 yuan/m², a premium of about 23.9%, setting the highest floor price in the Chahua area and marking the first time Jinniu District's land price exceeded 20,000 yuan/m². This year, Chengdu's land auction records have been continuously broken. On one hand, new highs in floor prices have emerged across the city. On the other, land prices in hot areas continue to rise.

★Other Hot Topics★

⭕[Baosteel Achieves Breakthrough in World's Highest-Strength Yoke Steel] Recently, the first batch of the world's highest-strength yoke steel, witnessed by a user expert team, passed rigorous quality inspection with all indicators meeting standards on the first attempt, earning high user recognition. This marks a milestone breakthrough for Baosteel in yoke steel R&D, providing critical material support for global hydropower equipment upgrades. Facing the demand for the highest-strength-grade yoke steel globally required for ultra-high-level hydroelectric generator sets, which imposes extremely high requirements on plate shape quality and mechanical properties, with all comprehensive indicators needing to be optimal, the Manufacturing Management Department of Tsingshan Base, leveraging the key core technology project platform of Baosteel, organized a task force comprising R&D personnel from the Technology Center and Hot Rolling Mill. The team focused on full-process tracking and control, continuously optimizing composition processes and tackling challenges related to plate shape and surface quality. After two months of multiple rounds of heat treatment process optimization trials, all physical quality indicators met the user's acceptance requirements at the first attempt.

⭕[Jinan City: Strictly Control Steel Capacity, Accelerate Optimization and Upgrading of Steel Product Structure] On June 25, the Jinan Municipal Government Information Office held a press conference. Yan Zengshan, a senior official at the Jinan Municipal Bureau of Industry and Information Technology, stated during the Q&A session that the bureau is deeply implementing the industrial strong city development strategy. By focusing on achieving carbon peaking in key industries such as steel, petrochemicals, and building materials, the bureau aims to drive carbon peaking in the industrial sector and accelerate the city's green, low-carbon, and high-quality industrial development. First, in the steel industry, strict control of steel capacity will be enforced, and the optimization and upgrading of steel product structures will be accelerated to build a high-quality steel industrial cluster. Efforts will be made to explore energy-saving and carbon reduction potentials, optimize furnace charge structures in ironmaking, and extensively apply technologies such as waste heat and energy recovery. High-quality and efficient utilization of steel scrap resources will be promoted. Second, in the petrochemical and chemical industries, outdated capacity will be phased out vigorously, and new refining and traditional coal chemical capacities will be strictly controlled, accelerating the shift toward high-end and low-carbon development. Enterprises will be encouraged to undertake energy-saving upgrades and transformations, with increased emphasis on energy-saving technological transformations and waste heat utilization. Changes in energy usage methods will be expedited, shifting from steam-driven turbines to electric-driven ones. Chemical parks will be prioritized for comprehensive clean, circular, and low-carbon transformations, promoting clustered, green, and refined development in the chemical industry.