[SMM Steel Market Morning News] Promote coordinated development of new-type industrialization and new-type urbanization according to local conditions

★Macro★

01 ★★★ [NDRC Urban and Small Town Reform and Development Center: Promote Coordinated Development of New-Type Industrialization and Urbanization Based on Local Conditions]

The National Development and Reform Commission (NDRC) Urban and Small Town Reform and Development Center recently stated that it will promote the four major actions of new-type urbanization with high quality. Among them, it will prioritize enhancing the competitiveness of industrial clusters to drive urbanization in potential regions. First, it will promote coordinated development of new-type industrialization and urbanization based on local conditions, improve the functions of industrial parks in potential regions, and strengthen county-level infrastructure to enhance urban employment support and comprehensive carrying capacity. Second, it will comprehensively utilize fiscal, land, financial, and tax policies to support potential regions in accelerating industrial introduction and grafting, fostering characteristic and competitive industrial clusters. Third, it will establish a "one county, one policy" mechanism for cultivating industrial clusters led by leading enterprises, innovate cooperation mechanisms for undertaking industrial transfers from developed regions, and improve the vocational training system through school-enterprise collaboration. Fourth, it will coordinate the advancement of new-type urbanization and comprehensive rural revitalization, promote integrated development of primary, secondary, and tertiary industries, and enhance functional complementarity between counties, towns, and villages to drive urbanization through urban-rural integration.

02 ★★ [2025 Pension Adjustment for Retirees: 2% Increase]

The Ministry of Human Resources and Social Security and the Ministry of Finance recently issued the "Notice on Adjusting the Basic Pensions of Retirees in 2025." The notice specifies that, effective January 1, 2025, the basic pension level will be raised for retirees who completed retirement procedures and received monthly basic pensions before the end of 2024, with an overall adjustment rate of 2% of the average monthly basic pension for retirees in 2024. This adjustment reasonably determines the pension adjustment ratio by comprehensively considering factors such as price changes and wage growth.

03 ★★ [H1 Recovery in Construction Machinery Industry, Full-Year Domestic Demand Expected to Maintain Double-Digit Growth]The latest statistics from the China Construction Machinery Association show that total excavator sales in H1 reached 120,500 units, up 16.8% YoY. Caixin learned from LiuGong that, benefiting from mine, water conservancy projects, and equipment renewal policies, domestic demand for earthmoving equipment is expected to maintain stable positive growth in H2, with full-year growth likely to remain in double digits. Overseas demand is projected to decline overall in 2025 but vary by region. A Zoomlion representative stated that the industry's recovery trend has initially extended from excavators to non-excavator segments, and under the macro backdrop of strengthening domestic demand, full-year domestic sales are expected to enter a growth trajectory. The company's mine sector capacity has tripled since the beginning of the year, and the company remains optimistic about overseas growth opportunities in emerging industries such as agricultural machinery and mining equipment.

★Industry & Downstream★

01 ★★★ [SMM HRC Weekly Balance] Demand Rebounds, Weekly HRC Inventory Declines Slightly

This week's HRC production fluctuated rangebound. Looking ahead, influenced by annual maintenance and rising order-taking pressures in July, some steel mills have adjusted their production schedules downward, with HRC output expected to decrease MoM in July.

Social inventory: SMM-tracked national HRC social inventory across 86 warehouses (large sample) reached 3.0728 million mt this week, down 33,500 mt WoW (-1.08%) and 29.32% YoY (new calendar basis). National social inventory declined slightly this week;

By region, inventory declined in east, north, south, and north-east China, while central China saw minor inventory buildup.

02 ★★★ [SMM Rebar Inventory] Construction Steel Total Inventory Continues Depletion

Total rebar inventory reached 5.0998 million mt this week, down 46,900 mt (-0.91%) WoW (previous value: -0.39%), and 2.0712 million mt (-28.88%) YoY (Lunar calendar basis, previous value: -29.04%).

03 ★★ [CAAM: China's NEV Sales Reach 6.937 Million Units in H1, Up 40.3% YoY]

Data released by the China Association of Automobile Manufacturers (CAAM) on July 10 shows the auto market maintained strong momentum from January to June, with production and sales both exceeding 15 million units, achieving over 10% YoY growth. Specifically, NEV production and sales reached 6.968 million and 6.937 million units respectively, up 41.4% and 40.3% YoY. NEVs accounted for 44.3% of total new vehicle sales. In exports, China's auto exports reached 3.083 million units from January to June, up 10.4% YoY, including 1.06 million NEV exports (+75.2% YoY).Z29/>04

 ★★ [Beijing: Optimizing Passenger Car Quota Allocation to Better Serve Household Demand]

The Beijing Municipal People's Government issued the "Beijing Special Action Plan for Deepening Reform to Boost Consumption," mentioning measures to improve the automobile consumption ecosystem. This includes optimizing passenger car quota allocation to better serve household needs, nurturing used car business entities, continuing to implement convenient measures such as "reverse invoicing" for used car sales and cross-region transaction registration, strengthening information sharing in the automotive sector, supporting third-party used car information query platforms, and promoting convenient and trustworthy used car transactions. Expand aftermarket consumption in automotive modification, leasing, racing, RV camping, and other sectors. Organize a series of NEV racing events within the Beijing-Tianjin-Hebei region to stimulate NEV consumption vitality.

05 ★★ Z35/>[Beijing: Research and Formulate "Mortgage Transfer" Policy for Personal Housing Loans Under Housing Provident Fund and Launch Related Services]

The Beijing Municipal People's Government issued the Specific Action Plan for Deepening Reforms and Boosting Consumption in Beijing, which mentions optimizing new housing supply. Priority will be given to supplying residential land near rail transit stations and employment-intensive areas, while improving the "affordable + market-oriented" housing supply system. The role of housing provident funds will be further leveraged to support contributors in applying for personal housing loans under the housing provident fund scheme while withdrawing provident funds for down payments. Research and formulation of a "mortgage transfer" policy for personal housing loans under the housing provident fund scheme will be conducted, and related services launched. Encouragement will be given to providing products and services such as housing renovation design, customized full-house decoration, and smart home solutions, promoting integrated indoor full-smart assembly and whole-house smart IoT. Construction of smart communities will be encouraged, exploring a "property services + lifestyle services" model, developing community embedded service facilities, and achieving full coverage of "15-minute convenient living circles."

06 ★★ [China Passenger Car Association: 135,000 NEVs Sold in China's Passenger Vehicle Market from July 1-6, Up 21% YoY]

Data from the China Passenger Car Association shows that from July 1-6, 135,000 NEVs were sold in China's passenger vehicle retail market, up 21% YoY and down 11% MoM, with a retail penetration rate of 56.7%. Cumulative retail sales reached 6.583 million units year-to-date, up 37% YoY. During the same period, NEV wholesale volumes by passenger vehicle producers totaled 125,000 units, up 31% YoY and flat MoM, with a producer wholesale penetration rate of 53.6%. Cumulative wholesale volumes reached 5.594 million units year-to-date, up 33% YoY.

★Other Hot Topics★

⭕[Chongqing Launches 36 "Three Enterprises" Collaboration Projects for New Western Land-Sea Corridor with Total Investment Exceeding 70 Billion Yuan]Chongqing launched 36 "Three Enterprises" (state-owned, foreign, private) collaboration projects for the New Western Land-Sea Corridor on July 10, with total investment exceeding 70 billion yuan, covering sectors such as new material R&D/manufacturing, commercial asset revitalization/operation, and financial capital innovation. The projects include 3 equity cooperation projects (12.4 billion yuan investment) in high-end real estate development and healthcare; 7 investment attraction projects (52.5 billion yuan) in cultural tourism, integrated services, transport-tourism integration, and commercial office; 5 business cooperation projects (300 million yuan) in commercial operation management and transport-tourism integration; and 21 asset revitalization projects (6.6 billion yuan) in commercial real estate, standard factories, land assets, digital healthcare, and tech services.

⭕[The Ministry of Water Resources and China Meteorological Administration jointly issued an Orange Warning for Mountain Torrent Disasters at 18:00 on July 10]The Ministry of Water Resources and China Meteorological Administration jointly issued an Orange Warning for Mountain Torrent Disasters at 18:00 on July 10: It is predicted that from 20:00 on July 10 to 20:00 on July 11, mountain torrent disasters are likely to occur in parts of southern Fujian, eastern and southwestern Guangdong, and southeastern Yunnan (Yellow Warning). In particular, mountain torrent disasters are highly probable in localized areas of southern Fujian and eastern Guangdong (Orange Warning). Other regions may also experience mountain torrent disasters due to short-term heavy rainfall. All localities are urged to strengthen real-time monitoring, flood control warnings, and evacuation preparedness.