[SMM Steel Market Morning Brief] Consumer Prices Up 1.2% YoY in April 2026

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Macro

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[CPI Up 1.2% YoY in April 2026]

In April 2026, the national consumer price index (CPI) rose 1.2% YoY. Among them, urban areas rose 1.2% and rural areas rose 1.0%; food prices fell 1.6%, while non-food prices rose 1.8%; consumer goods prices rose 1.4%, and service prices rose 0.9%. On average from January to April, the national CPI rose 0.9% compared with the same period last year.

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[PPI Up 2.8% YoY in April 2026]

In April 2026, the national ex-factory prices of industrial producers rose 2.8% YoY and 1.7% MoM. The purchase prices of industrial producers rose 3.5% YoY and 2.1% MoM. On average from January to April, ex-factory prices of industrial producers rose 0.2% compared with the same period last year, and purchase prices of industrial producers rose 0.5%.

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Industry & Downstream

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[Small and Medium Banks Trigger Another Wave of Interest Rate Cuts, Deposit Rate Downtrend Continues]

Another round of bank deposit rate cuts has quietly arrived. Since May, multiple small and medium banks have intensively issued announcements to cut RMB deposit product rates, covering major categories including call deposits and time deposits. Historically, deposit rate cuts tend to follow a "tiered" pattern, with major banks leading and smaller banks following. The previous round of nationwide deposit rate cuts began in October 2024, when six state-owned major banks—ICBC, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China—collectively cut their listed deposit rates by 5 to 25 basis points. Since April this year, at least 20 banks have cut their listed deposit rates. After adjustments, some banks' long-term deposit rates have fallen below 2%, fully entering the "1% era," with deposit rate levels approaching those of state-owned major banks and even falling below some joint-stock banks. It is understood that this round of rate cuts is a rational choice by the banking industry to cope with the continued narrowing of net interest margins. Data from the National Financial Regulatory Administration showed that as of the end of Q4 2025, the net interest margin of commercial banks was 1.42%, flat with the end of Q3 but down 10 basis points significantly from 1.52% at the end of 2024. Looking ahead, the industry generally believes the downward trend in deposit rates is expected to continue. CITIC Securities estimates that the net interest margin decline for the banking industry in 2026 will narrow to around 4 basis points, marking the first time since 2022 that the annual margin decline is in the low single digits.

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[Guangzhou: Focus on Promoting R&D and Adoption of Smart Hardware Products Including Intelligent Connected Vehicles, Intelligent Unmanned Systems, Whole-Home Smart Terminals, Smart Wearable Devices, Industrial Smart Terminals, and Brain-Computer Interfaces]

The Guangzhou Municipal Artificial Intelligence Industry Development Office issued the "Key Work Points for Guangzhou's Artificial Intelligence Industry in 2026." It mentioned developing new-type smart terminals, with a focus on promoting the R&D and adoption of smart hardware products including intelligent connected vehicles, intelligent unmanned systems, whole-home smart terminals, smart wearable devices, industrial smart terminals, and brain-computer interfaces. It also aims to promote the application of vehicle-side large models, and support the development of AIoT (Artificial Intelligence of Things) systems integrating home appliances, central controllers, and sensors.

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[CPCA: Passenger NEV Retail Sales Reached 849,000 Units in April, Down 6.8% YoY]　

CPCA data showed that passenger NEV retail sales in April reached 849,000 units, down 6.8% YoY and down 0.3% MoM; from January to April, passenger NEV retail sales totalled 2.758 million units, down 17.2% YoY. In April, conventional fuel passenger vehicle retail sales were 530,000 units, down 37% YoY and down 33% MoM.

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Other Hot Topics

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⭕[NEV Exports Reached 430,000 Units in April, Up 1.1 Times YoY]Latest data showed that in April, NEV production and sales reached 1.32 million units and 1.344 million units respectively, up 5.5% and 9.7% YoY respectively, with NEV new car sales accounting for 53.2% of total new car sales. In terms of exports, NEV exports reached 430,000 units, up 1.1 times YoY. Moreover, from January to April this year, China's NEV exports reached 1.384 million units, up 1.2 times YoY.

⭕[NBS: Petroleum and Natural Gas Extraction Industry Prices Up 18.5% MoM in April]Dong Lijuan, Chief Statistician of the Urban Division of the NBS, interpreted the April 2026 PPI data. On a MoM basis, the national PPI rose 1.7% MoM, with the increase expanding by 0.7 percentage points from the previous month. The main characteristics of PPI MoM movements this month included international input factors driving up domestic petroleum-related industry prices. The rise in international crude oil prices drove up domestic petroleum-related industry prices. Among them, petroleum and natural gas extraction industry prices rose 18.5% MoM, petroleum, coal and other fuel processing industry prices rose 16.4%, chemical raw material and chemical product manufacturing industry prices rose 8.3%, chemical fibre manufacturing industry prices rose 5.6%, and rubber and plastic products industry prices rose 1.7%.

⭕[Toyota to Build New Auto Plant in India with Annual Capacity of 100,000 Units]Toyota said on Monday that it will build a new plant with an annual capacity of 100,000 units in Maharashtra, India, with the plant expected to begin production in H1 2029. The Japanese automaker stated in a press release that the plant will be located in the local Bidkin Industrial Area, primarily responsible for producing a new SUV car model, and is expected to create approximately 2,800 jobs locally.

⭕[Trump: Iran's Response to US Proposal "Stupid," "Ceasefire Agreement in Jeopardy"]US President Trump told media at the White House on May 11 that Iran's response to the US proposal was "stupid," and the ceasefire agreement with Iran was currently in a "precarious" state. Trump also said he would achieve "total victory" over Iran.

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