On April 21st, the steel futures and spot markets recovered simultaneously. The spot price remained stable with a slight increase, while the main futures varieties rebounded across the board. Rebar and hot-rolled coil ended their six-day consecutive decline and closed up 0.7%. Iron ore, coking coal and coke rose by 1.25%, and the daily rebound of rebar futures exceeded 40 points. At the macro level, The State Council executive meeting’s study of measures to stabilize the economy has boosted market confidence.
Coupled with the strong rebound in raw materials such as iron ore, the black metal series continued its upward trend in the Friday night trading session. However, it is necessary to be vigilant about the hidden concerns on the demand side: The current peak season is coming to an end. Although the demand for building materials has rebounded in a short-term pulse, the low rate of project funds in place restricts its sustainability. Due to the approaching closure of the export order window for hot-rolled coils, the demand in May May weaken.
In addition, the domestic LPR remains unchanged, and macro policies have not yet released signals of incremental stimulus. The extent of the steel price rebound still needs to be observed based on the pace of inventory reduction and the resilience of terminal demand. 01 #
TODAY’S Information: The April LPR quote has been released: The 5-year and 1-year rates remain unchanged. The April Loan Prime Rate (LPR) quote has been released: The LPR for terms over 5 years is 3.6%, compared with 3.6% last month. The one-year LPR was 3.1%, compared with 3.1% last month.
Fiscal expenditure in the first quarter increased by 4.2% year-on-year, 0.8 percentage points faster than that in January-February. Recently, The State Council’s executive meeting held a special meeting to study a package of measures to stabilize employment and the economy, emphasizing the need to intensify the implementation of macro policies to address the downward pressure on the economy, with a focus on strengthening support and guarantee for employment and people’s livelihood, enterprise relief and effective investment.
Meanwhile, the national fiscal expenditure in the first quarter increased by 4.2% year-on-year, accelerating by 0.8 percentage points compared with the growth rate in January-February. This reflects the obvious feature of the proactive fiscal policy taking effect in advance. The expenditure in key areas such as infrastructure investment and people’s livelihood security has picked up speed, providing substantive support for the stable operation of the economy. This policy combination not only reflects the urgency of the central government’s deployment for maintaining stable growth, but also verifies the effectiveness of policy implementation through the progress of fiscal expenditure.
Wang Xin, director of the Research Bureau of the People’s Bank of China, said at a press conference held by the Information Office of The State Council on April 21 that the People’s Bank of China has made significant progress in formulating the financial standards for the transformation of four key industries, namely steel, coal and power, building materials and agriculture.
We have also formulated a usage manual, clearly defining the identification conditions for the transformation entities to effectively meet the reasonable and necessary capital demands of traditional high-carbon fields during the low-carbon transformation process.
Wang Xin said that currently these standards are being trialed in some areas and have been widely welcomed by the market. Wang Xin disclosed that the development of the second batch of financial standards for the transformation of seven industries including shipping and chemical engineering is underway.
