[SMM Steel Market Morning Brief] Central Bank Net Injected 10 Billion Yuan via Open Market Government Bond Trading in June

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Macro

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[Central Bank Net Injection of 10 Billion Yuan via Open Market Government Bond Trading in June]

The People's Bank of China (PBOC) recently released data on liquidity injections through various tools in June 2026, showing a net injection of 10 billion yuan through open market government bond trading during the month. According to statistics, net injections via open market government bond trading totaled 300 billion yuan in the first six months of this year. The PBOC’s Q1 2026 monetary policy implementation report stated that since the beginning of the year, the PBOC has conducted regular government bond trading operations, flexibly adjusting the scale of operations based on the need for base money injection and bond market conditions. The June injection data also showed a net injection of 200 billion yuan through the medium-term lending facility (MLF) and a net withdrawal of 137.2 billion yuan through other structural monetary policy tools. In addition, net injections through 7-day reverse repos amounted to 582.6 billion yuan, while other-maturity reverse repos saw a net injection of 300 billion yuan.

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Oil Prices Post Biggest Single Drop of the Year

Oil prices experienced a "three consecutive decline." According to the National Development and Reform Commission (NDRC), starting from 24:00 on July 3, the retail prices of gasoline and diesel (standard grade) will be cut by 950 yuan and 915 yuan per mt, respectively. This adjustment marks the largest single reduction this year. Based on calculations by institutions, the price cut is equivalent to a decrease of 0.73 yuan per liter for 92-octane gasoline, 0.77 yuan per liter for 95-octane gasoline, and 0.78 yuan per liter for 0# diesel. For a typical private car with a 50-liter fuel tank, filling up a full tank of 92-octane gasoline will save about 36.5 yuan.

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Industry and Downstream

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[Chinese Passenger Vehicle Market Share in Europe Surpasses Japan for the First Time]

According to the latest data from the European Automobile Manufacturers' Association (ACEA), China's passenger vehicle market share in Europe surpassed that of Japan for the first time in May. Data shows that in May, five Chinese automakers sold a total of 138,400 vehicles in 31 European countries, up 65% YoY, while six Japanese automakers sold 130,400 vehicles in the same 31 countries, down 3% YoY.

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[All 200 Billion Yuan in Funding for the Program of Large-Scale Equipment Upgrades and Consumer Goods Trade-Ins Has Been Disbursed This Year]

Recently, the National Development and Reform Commission (NDRC) has issued the third batch of equipment upgrade project lists and funding allocations this year, supporting equipment renewals in fields such as energy and power, logistics, education, elderly care institutions, offline consumer commercial facilities, old operating trucks, residential old elevators, and the installation of elevators in old residential communities. Since the beginning of this year, the NDRC, together with relevant departments, has optimized the scope of support, improved the application process, strengthened review and approval, accelerated the pace of work, and disbursed equipment upgrade funds in three batches. At present, the full-year 200 billion yuan equipment renewal funds have been fully allocated, supporting about 11,000 projects across 22 sectors, providing strong support for accelerating industrial upgrading, promoting green development, improving people’s well-being, and strengthening security safeguards. From January to May this year, investment in equipment and tool purchases increased by 9.3% YoY, accounting for 17.5% of total investment, up 2.2 percentage points from the same period last year.

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[CISA: Monthly Report on Main Steel-Using Industries, January-May]

From January to May, the construction sector among main steel-using industries remained sluggish, while manufacturing continued its overall growth. Specifically, the real estate market continued its adjustment, and infrastructure investment slowed compared with earlier periods. The value added of the machinery industry and export value of electromechanical products maintained growth, automobile production continued to edge down slightly, all three major shipbuilding indicators in the shipbuilding industry grew rapidly, production of the three major white goods in the home appliance industry all maintained growth, and container production continued to decline.

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[June Heavy-Duty Truck Market Sales Up 18% YoY]

According to statistics from cvworld.cn, China’s heavy-duty truck market sold about 115,000 units in June 2026, up about 5% MoM from May and up 18% from 98,000 units in the same period last year, while the YoY growth rate slowed somewhat compared with the March-May period. This was also a record high for June sales in the past five years. In January-June, cumulative heavy-duty truck sales in China reached about 660,000 units, up about 22% YoY.

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Other Hot Topics

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⭕[Shenzhen Property Market Continues Stable and Positive Momentum]According to the Shenzhen Housing and Construction Bureau, in June, the Shenzhen property market sustained the strong momentum following the April 29 new policy. Total online registrations for new commercial housing and second-hand residential properties in the city reached 8,878 units, up 14.2% YoY, and the real estate market continued its stable and positive trend. In the new home market, online registrations for new commercial residential properties in Shenzhen totaled 3,785 units in June, up 15.6% YoY, with the new home market continuing to improve. High-quality residential projects remained highly sought after. The commercial property market also performed well, with business apartments highlighting cost-effectiveness advantages. In H1, first-hand and second-hand office buildings and business apartments in the city recorded transactions of 6,567 and 6,238 units, respectively, soaring 103.0% and 70.2% YoY, respectively.

⭕[Shenlong Group’s “Yunnan Strip New Material Base” Fully Put into Operation]On July 2, 2026, the galvanizing workshop of Yunnan Shenlong Tengda New Material Technology Co., Ltd. (hereinafter referred to as “Yunnan Shenlong”) reported another success—the continuous hot-dip galvanizing/aluminum-zinc line with an annual capacity of 250,000 mt, contracted by Huangshi Shanli Technology Co., Ltd. (hereinafter “Shanli Technology”), was successfully put into operation. This was the third line successfully commissioned within a month, following the startup of a continuous hot-dip galvanizing line with an annual capacity of 500,000 mt on June 1 and a continuous hot-dip galvanizing/Zn-Al-Mg line, also with an annual capacity of 500,000 mt, on June 16 of this year. It marks the full commissioning of the three continuous hot-dip galvanizing/aluminum-zinc/Zn-Al-Mg lines built by Shanli Technology for Yunnan Shenlong, injecting strong new momentum into the supply of high-end new coated sheet and strip materials for China’s southwestern region!

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