[SMM Steel Morning News] People's Daily: From Panda Bonds to Foreign Investors' Growing Investment in China

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Macro

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[PBOC Conducts 1,000 Billion Yuan Outright Reverse Repo Operation Today]

The People's Bank of China recently announced that it would conduct a 1,000 billion yuan outright reverse repo operation on July 6, with a fixed quantity, rate tender, and multiple-price bidding, for a term of 3 months (91 days). As 800 billion yuan of this tenor matures within the month, this 3-month outright reverse repo operation will achieve a rollover with increased volume, ending the three-month streak of shrinking volumes for this tenor.

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[People's Daily: Panda Bonds Reflect Foreign Investors' Increasing Bet on China]

Since the start of this year, panda bond issuance has heated up significantly, with over 130 billion yuan issued in the first five months, and is expected to reach a new high for the full year. Large-scale panda bond issuance by mainstream international issuers signals strong global recognition of China's institutional environment, development expectations, and the renminbi. Specifically, three key reasons stand out. First, comparative financing cost advantages have made borrowing in renminbi more attractive. Second, the continuous improvement of the panda bond framework has enhanced financing convenience. Third, the popularity of panda bonds is closely linked to the accelerating pace of renminbi internationalization. The growing panda bond market is forming a positive feedback loop with the international use of the renminbi.

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[PBOC Reverse Repo Operation Results in Net Withdrawal of 49.5 Billion Yuan on the Day]

The PBOC conducted a 7 billion yuan 7-day reverse repo and a 1,000 billion yuan outright reverse repo operation today. With 157.5 billion yuan of 7-day reverse repos and 800 billion yuan of outright reverse repos maturing today, the net withdrawal for the day amounted to 49.5 billion yuan. In the open market this week, a total of 678.5 billion yuan reverse repos will mature, with 157.5 billion yuan, 69.5 billion yuan, 100 billion yuan, 288.5 billion yuan, and 63 billion yuan maturing from Monday to Friday respectively. Additionally, 800 billion yuan of 89-day outright reverse repos matured on Monday, and the PBOC conducted a 1,000 billion yuan 3-month outright reverse repo operation on Monday.

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Industry and Downstream

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[World's Largest Dock Restarts]

After being taken over by a new owner, the long-dormant Gunsan Shipyard of South Korea's largest shipbuilding group, HD Hyundai, has officially restarted, securing its first new ship order. Amid a global new shipbuilding orderbook that continues to fluctuate at highs, this shipbuilding base, which had been idle for nearly nine years, is re-entering the sight of global shipowners, leveraging its advantage of relatively shorter delivery cycles.

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[Shaanxi Coal Industry: June 2026 Coal Production Up 0.70% YoY]

Shaanxi Coal Industry announced that in June 2026, its coal production was 14.46 million mt, cumulative 91.17 million mt, up 0.70% and 4.30% YoY respectively; sales of self-produced coal were 13.07 million mt, cumulative 83.66 million mt, down 9.49% and up 3.45% YoY respectively. Power generation side, total power generation was 3.352 billion kWh, cumulative 19.082 billion kWh, down 11.86% and up 7.39% YoY respectively; total electricity sales were 3.136 billion kWh, cumulative 17.946 billion kWh, down 12.40% and up 7.98% YoY respectively.

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[Hoa Phat Price Adjustment Info]

FHS announced July prices last Friday, continuing a significant cut of 1,050 VND per kg (approx. $40 per mt) compared to the previous month.

Please see below.

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20kt and above: $538 CIF (14,230 VND/kg)

15kt to 20kt: $540 CIF (14,280 VND/kg)

10kt to 15kt: $542 CIF (14,330 VND/kg)

5kt to 10kt: $544 CIF (14,380 VND/kg)

2,000 mt to 5,000 mt: $546 CIF (14,430 VND/kg)

<2kt: $548 CIF (14,490 VND/kg)

Shipment: Aug/Sep 2026

Port: HCM/PM

Exchange rate: 26,460 VND = $1

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[Bao Gang United Steel HH AREMA Heat-Treated Rail First Export Outside China]

In June 2026, Bao Gang United Steel successfully completed the first batch export of HH370 grade high-strength heat-treated rails conforming to AREMA standards. This marked the first export of HH grade rails, filling the gap in the company’s production and export capabilities for all categories of AREMA-standard rails, further enriching its high-end AREMA-standard rail product portfolio, and demonstrating its full independent manufacturing strength from proprietary technological breakthroughs to large-scale stable production.

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Other Hot Topics

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⭕[Shan Steel Rizhao Company 800MPa High-Strength Steel First Successful Trial Production]Recently, the 800MPa grade high-strength steel was successfully trial-produced on the hot rolling line. Inspection showed good flatness and surface quality, marking that the hot rolling plant of Shan Steel Rizhao Company has reached a new level in high-end product development, further enhancing the competitiveness of its hot-rolled products in the lightweight markets for construction machinery and commercial vehicles.

⭕[The environmental impact report for the Phase II construction of the Dongfang Special Steel Green High-End Nickel-Chromium New Material Intelligent Manufacturing Project was approved.]This is an expansion project with a total investment of 3,823,998,800 yuan, of which 190 million yuan is for environmental protection. The project is located at No. 1333 Jiagang Road, Xinfeng Town, Nanhu District, Jiaxing City (within the existing plant area of Zhejiang Nanhu Economic Development Zone and on newly added adjacent land). The project plans to purchase vacuum induction furnaces, electroslag furnaces, vacuum consumable furnaces, cold continuous rolling units, cold single-stand rolling units, and supporting cold annealing, pickling, and tempering units, forming a capacity of 1 million mt of cold-rolled white coils and 35,200 mt of specialty smelting.

⭕[Multiple departments jointly deploy a crackdown on illegal activities in production safety.]It was learned from the Ministry of Emergency Management on July 6 that the Office of the State Council Work Safety Committee, together with the Political and Legal Affairs Commission of the CPC Central Committee, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the Ministry of Justice, recently issued a notice. It deploys all regions and relevant departments to conscientiously implement the spirit of General Secretary Xi Jinping's important instructions on production safety, strictly implement the spirit of the national production safety video conference, and, in conjunction with the three-year action plan for tackling the root causes of production safety and the investigation and rectification of major accident hazards, focus on key industries such as ore mines, chemicals, fire protection, and industry and trade to deeply carry out a crackdown on illegal activities in production safety.

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