24 January 2026 | 12:02AM HKT Portfolio Strategy Research CHINA WEEKLY KICKSTART Markets edged down 1%; Q4 GDP in line with expectations amid mixed December activity data MXCN/CSI300 both edged down by 0.6% this week. Vice Premier He Lifeng delivered a keynote speech at the World Economic Forum in Davos on Jan 20. MoF hosted a press conference on Jan 20 and reiterated its commitment to maintaining proactive fiscal policy in 2026. CSRC released Guidelines for performance benchmarks of mutual funds, effective ...

Summary of Key Points from Conference Call Industry and Economic Overview - **US Economy**: The US economy is expected to exhibit a K-shaped recovery in 2025, with stable consumption from high-income households, primarily driven by asset markets and housing prices. In 2026, inflation is projected to decline, and the peak effects of tariffs will fade, potentially enhancing purchasing power for middle- and low-income households, leading to a dual-driven consumption model [1][2] - **Eurozone Economy**: The Eurozone's economic performance is complex, with Germany showing significant potential for acceleration due to fiscal stimulus, while France and Italy are underperforming. Spain is strong but has a small share in the Eurozone. By the end of 2027, Eurozone growth is expected to exceed potential levels, accelerating from 0.1%-0.2% to around 0.35% [1][5] - **China's Macroeconomic Environment**: The macroeconomic environment in China remains challenging in 2026, with persistent deflationary pressures. However, advancements in advanced manufacturing are expected to improve global market share for exports. The People's Bank of China is unlikely to allow significant appreciation of the yuan to avoid exacerbating deflation, which could negatively impact corporate revenues, wage growth, and consumption [1][6] - **Asian Economies**: Other Asian economies are primarily driven by exports, with technology exports benefiting in 2025, while non-technology exports are expected to recover in 2026, leading to improved capital spending, employment, and consumption [1][3][7] Key Themes in Capital Expenditure - **Artificial Intelligence (AI) Investment**: In 2025, corporate spending will focus on AI, with non-AI related expenditures affected by policy uncertainties. AI investments are crucial for sustainable corporate spending, although a significant portion may not be reflected in GDP due to being intermediate or imported goods. If the recovery broadens, non-AI related spending may gain momentum, contributing to cyclical economic upturns [1][4] Risks and Considerations - **US Tariffs on Europe**: If the US imposes an additional 10% tariff on Europe, it could reduce GDP growth by 30-60 basis points. Retaliatory measures could further increase downside risks, indicating that new trade uncertainties could negatively impact Europe [1][3][9] - **Federal Reserve's Response to AI Adoption**: Rapid adoption of AI could significantly boost productivity growth, nearing 3%, similar to the tech boom of the 1990s. This may accelerate actual growth while inflation could decline, allowing the Federal Reserve to consider interest rate cuts, although timing will depend on balancing strong data with signs of falling inflation [1][8] Additional Insights - **Potential for Fiscal Stimulus in China**: A comprehensive demand-driven fiscal stimulus from Beijing is unlikely unless significant social stability challenges arise. In such cases, a shift towards consumer-focused policies, including increased social welfare spending, particularly for migrant workers, may be considered [1][10]

钢材：需求边际转弱，节前钢价延续震荡 研究员：戚纯怡 期货从业证号：F03113636 投资咨询证号：Z0018817 目录 | 第一章 | 钢材行情总结与展望 | 2 | | --- | --- | --- | | 第二章 | 价格及利润回顾 | 5 | | 第三章 | 国内外重要宏观数据 | 12 | | 第四章 | 钢材供需以及库存情况 | 19 | GALAXY FUTURES 1 钢材总结 数据总结： GALAXY FUTURES 2 供给：本周螺纹小样本产量199.55万吨（+9.25），热卷小样本产量305.41万吨（-2.95）。247家钢厂高炉铁水日 均228.1万吨（+0.09），富宝49家独立电弧炉钢厂产能利用率34.4%（-1.6）。电炉端，华东平电电炉成本在3410 （折盘面）元/吨左右，电炉平电利润-141.6元/吨左右，谷电成本3245（折理记）元左右，华东三线螺纹谷电利润 +23元/吨。近期随着废钢价格的上升，电炉成本持续增加，导致电炉利润下滑，本周铁水小幅复产，电炉产能利用率 有所下滑，废钢日耗在50.82万吨，预计后续仍有可能陆续减产；长流程钢利润维持盈利，铁水产量本周继续 ...

Core Viewpoint - The report on Beijing's budget execution for 2025 and the draft budget for 2026 highlights a stable growth in public budget revenue, with a focus on implementing proactive fiscal policies to support the city's development during the 14th Five-Year Plan and set a strong foundation for the 15th Five-Year Plan [1][4]. Group 1: 2025 Budget Execution - The total public budget revenue for 2025 reached 668.06 billion yuan, marking a 4.8% increase, with a tax revenue share of 86.5% [2][3]. - The city's public budget expenditure amounted to 840.19 billion yuan, also reflecting a 4.8% increase, with a focus on optimizing expenditure structure and enhancing government financial capacity [2][3]. - The fiscal policies included measures such as reducing non-essential expenditures by 1.82 billion yuan and conducting performance evaluations on 84 existing expenditure policies [2][3]. Group 2: Achievements During the 14th Five-Year Plan - Over the past five years, the fiscal policies have reduced tax burdens on businesses by over 490 billion yuan, fostering a positive cycle of economic growth and fiscal revenue [3]. - The public budget revenue exceeded 660 billion yuan in 2025, with an average annual growth rate of 4%, and the number of taxable entities reached 1.433 million, growing at an average rate of 7% [3]. - Social welfare expenditures accounted for over 80% of the public budget, with cumulative investments exceeding 3 trillion yuan, focusing on enhancing living standards [3]. Group 3: Outlook for 2026 - The expected public budget revenue for 2026 is projected to be 695 billion yuan, with a growth rate of approximately 4% [4][5]. - The expenditure plan for 2026 is set at 860.02 billion yuan, targeting major strategic areas and public welfare to support high-quality economic and social development [5]. - The fiscal department aims to enhance management efficiency and implement zero-based budgeting and full-cost performance management to improve fund utilization [5].

Core Viewpoint - The local government bond market in 2025 is characterized by a significant increase in general bond issuance due to rising fiscal deficits, an unexpected surge in special bonds to address government arrears, a notable decline in bonds allocated for infrastructure, and a longer issuance period influenced by fiscal pressures and rising interest rates [1][2][3]. Group 1: 2025 Local Bond Market Overview - In 2025, a total of 1,678 new bonds were issued, with an issuance scale of 53,616.89 billion yuan, representing a year-on-year increase of 26.55% and 14.03% respectively [2][3]. - The issuance of general bonds reached 7,700.21 billion yuan, accounting for 96.25% of the fiscal deficit, while special bonds amounted to 45,916.68 billion yuan, exceeding the limit by 4.36% [2][3]. - The average issuance period for local bonds extended to 14.47 years, reflecting the local governments' strategy to manage fiscal pressures [19]. Group 2: Policy Environment in 2025 - The fiscal policy shifted from "active" to "more active," with an increased fiscal deficit rate set at around 4%, up by 1 percentage point from the previous year [27]. - Local government special bonds were primarily utilized for "clearing debts," with a focus on addressing overdue payments to enterprises [28]. - The establishment of a Debt Management Department by the Ministry of Finance aims to enhance monitoring and management of government debt risks [29]. Group 3: Local Government Financial Performance - Economic growth rates for most provinces declined in the first three quarters of 2025, with 24 provinces experiencing a slowdown compared to the first half of the year [30]. - Public fiscal revenue showed slight growth, while government fund revenues saw a significant decline, indicating ongoing challenges in the real estate market [31][33]. - Net financing from local bonds increased in most provinces, with notable growth in Shanghai and Ningxia, while five provinces experienced a decrease [34]. Group 4: Outlook for 2026 - The local bond issuance scale is expected to rise further in 2026 to support domestic demand and debt resolution, with projections indicating a total issuance of approximately 10.7 trillion yuan [36]. - The "stock-bond seesaw effect" is anticipated to remain prominent, with local bond market interest rates likely to experience fluctuations [37]. - Optimization of special bond usage management is expected, with a potential decrease in funding proportions for certain areas [38].

Policy Overview - The Ministry of Finance has introduced seven structural policies since January 20, focusing on loans, risk compensation guarantees, and consumer subsidies, with a total investment of approximately 250 billion yuan[1] - These policies reflect a continuous optimization of fiscal expenditure structure, emphasizing a moderate expansion in total fiscal policy while enhancing quality and efficiency[1] Fiscal Outlook - Fiscal revenue is expected to continue recovering due to strengthened tax collection and the gradual reduction of certain tax incentives, with an estimated overall deficit expansion of about 700 billion yuan for the year[1] - By the end of 2025, fiscal deposits are projected to remain at historically high levels, allowing for some rollover of existing funds into the current year[1] Structural Adjustments - The ongoing zero-based budgeting reform is enhancing the flexibility of fiscal fund allocation, leading to improved efficiency in fund utilization and a continued trend of prioritizing social welfare in fiscal spending[1] - Specific policies include a loan interest subsidy for fixed asset investments, with an estimated subsidy scale of around 200 billion yuan, and a consumer loan subsidy expected to reach approximately 100 billion yuan[9][13] Social Welfare Initiatives - The elderly care subsidy policy is projected to benefit around 20 million elderly individuals, with an estimated total subsidy amounting to 1.92 trillion yuan, potentially stimulating approximately 4.3 trillion yuan in overall elderly care service consumption[18]

Group 1: Report Industry Investment Rating - The short - term investment rating for the coke industry is a wide - range, sideways movement, with a strategy of buying on dips [1][2] Group 2: Core View of the Report - The supply - demand pattern of coke is directly affected by upstream coking coal costs, downstream steel demand, and macro - policy guidance. Currently, the combined inventory of coking coal and coke continues to rise, in a seasonal inventory - building phase, with overall weak supply - demand. Downstream steel mills' hot metal production is relatively stable, restocking as needed. Real - estate investment growth rate decline continues to expand, and medium - to - long - term demand continues to decline. The macro environment is generally positive, with domestic reserve requirement ratio cuts implemented and fiscal policies continuing to be proactive, and there are still expectations for future policies. Overall, the market is expected to be in a wide - range sideways movement [2] Group 3: Summary by Related Catalogs 1. Coke Inventory - As of January 16, independent coke - making enterprises' inventory dropped 4.95% month - on - month to 81.81 tons. Steel mills' inventory increased to 650.33 tons, and port inventory rose 6.41% to 265.07 tons. The combined coke inventory increased by 16.31 tons to 997.21 tons, reaching a seven - month high, and was more than 2% lower year - on - year [1] 2. Coke Profit - The average profit per ton of coke for 30 independent coking plants nationwide is - 65 yuan/ton. The average profit of Shandong quasi - first - grade coke is - 53 yuan/ton, and also - 7 yuan/ton. The average profit of Inner Mongolia second - grade coke is - 105 yuan/ton, and that of Hebei quasi - first - grade coke is - 12 yuan/ton [1] 3. Downstream Demand - The blast - furnace operating rate of 247 steel mills decreased by 0.47 percentage points to 78.84%, 1.66 percentage points higher than the previous year. The blast - furnace iron - making capacity utilization rate decreased to 85.48%. The daily average hot - metal output decreased by 1.49 tons month - on - month to 228.01 tons, 3.53 tons higher than the previous year [1] 4. Upstream Coking Coal - The coking coal inventory of coal mines dropped 7.66%, while that of independent coke - making enterprises increased 5.71% to 1132.85 tons. Steel mills' coking coal inventory slightly increased to 802.2 tons, and the port's imported coking coal inventory continued to rise. The combined coking coal inventory increased by nearly 2% month - on - month to 2769.85 tons, lower than the same period in previous years [2] 5. News - In 2026, the fiscal deficit, total debt, and total expenditure will be maintained at necessary levels, ensuring that the overall expenditure level "only increases" and the guarantee for key areas "only strengthens". Five departments including the Ministry of Finance issued a notice to implement a loan interest - subsidy policy for small, medium, and micro enterprises. The Minister of Housing and Urban - Rural Development stated that efforts will be made to stabilize the real - estate market this year and support reasonable financing needs of real - estate enterprises [2]

Monetary Policy - The People's Bank of China is expected to implement two interest rate cuts in 2026, each by 10 basis points, with room for further reductions in reserve requirements and interest rates [3][4] - The average reserve requirement ratio for financial institutions is currently 6.3%, indicating potential for a reduction [3] Fiscal Policy - The fiscal deficit rate is projected to increase from 11% of GDP in 2025 to 12.2% in 2026, with overall spending expected to increase in key areas [3][4] - The Ministry of Finance emphasizes that the total scale of fiscal deficits, debt, and expenditures will be maintained at necessary levels to ensure spending does not decrease [4] Economic Growth - China's exports are anticipated to remain strong in 2026, driven by global economic growth, expansion into emerging markets, and China's competitive product strength [5] - In 2025, China's total foreign trade reached 45.47 trillion yuan, a 3.8% increase year-on-year, maintaining its position as the world's largest goods trader [4][5] Investment Outlook - Investment performance in 2026 is expected to improve compared to 2025, with significant projects in technology, AI, and power grids likely to accelerate [5] Consumer Trends - Consumption is expected to show structural differentiation, with service consumption growth outpacing that of goods consumption in 2026 [6]

1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - The bond market is oscillating between stable growth and easing expectations, influenced by factors such as the stock market, policy signals from the Politburo meeting, unchanged LPR, Fed rate - cut expectations, and global trade uncertainties. Short - term attention should be paid to policy signals at the end of the month [3] 3. Summary by Relevant Catalogs I. Interest Rate Pricing Tracking Indicators - **Price Index**: China's monthly CPI has a 0.20% month - on - month increase and 0.80% year - on - year increase; monthly PPI has a 0.20% month - on - month increase and - 1.90% year - on - year decrease [8] - **Monthly Economic Indicators**: Social financing scale is 442.12 trillion yuan, with a 2.05 - trillion - yuan increase and 0.47% growth rate; M2 year - on - year is 8.50%, with a 0.50% increase and 6.25% growth rate; manufacturing PMI is 50.10%, with a 0.90% increase and 1.83% growth rate [9] - **Daily Economic Indicators**: The US dollar index is 98.78, with a 0.23 increase and 0.23% growth rate; the US dollar against the offshore RMB is 6.9586, with a 0.002 decrease and - 0.03% growth rate; SHIBOR 7 - day is 1.49, with a 0.01 increase and 0.34% growth rate, etc. [10] II. Overview of the Treasury Bond and Treasury Bond Futures Market - **Closing Price and Fluctuation**: On January 21, 2026, the closing prices of TS, TF, T, and TL are 102.43 yuan, 105.88 yuan, 108.20 yuan, and 112.25 yuan respectively, with fluctuations of - 0.01%, 0.01%, 0.03%, and 0.75% [3] - **Net Basis Spread**: The average net basis spreads of TS, TF, T, and TL are - 0.014 yuan, - 0.022 yuan, - 0.039 yuan, and - 0.970 yuan respectively [3] III. Overview of the Money Market Liquidity - **Central Bank Operations**: On January 21, 2026, the central bank conducted 363.5 billion yuan of 7 - day reverse repurchase operations at a fixed rate of 1.4% [2] - **Repo Rates**: The main term repo rates of 1D, 7D, 14D, and 1M are 1.322%, 1.488%, 1.597%, and 1.559% respectively, and the repo rates have recently declined [2] IV. Spread Overview - **Inter - period and Inter - variety Spreads**: There are various inter - period spreads of treasury bond futures and inter - variety spreads between spot bonds and futures, such as 4*TS - T, 2*TS - TF, etc. [30][32] V. Two - year Treasury Bond Futures - **Related Rates**: The relationship between the implied interest rate of the two - year treasury bond futures main contract and the treasury bond yield to maturity, and the relationship between the TS main contract IRR and the funding rate are presented [41] - **Basis Spread**: The three - year basis spread and net basis spread trends of the TS main contract are shown [43] VI. Five - year Treasury Bond Futures - **Related Rates**: The relationship between the implied interest rate of the five - year treasury bond futures main contract and the treasury bond yield to maturity, and the relationship between the TF main contract IRR and the funding rate are presented [45] - **Basis Spread**: The three - year basis spread and net basis spread trends of the TF main contract are shown [52] VII. Ten - year Treasury Bond Futures - **Related Rates**: The relationship between the implied yield of the ten - year treasury bond futures main contract and the treasury bond yield to maturity, and the relationship between the T main contract IRR and the funding rate are presented [51] - **Basis Spread**: The three - year basis spread and net basis spread trends of the T main contract are shown [51] VIII. Thirty - year Treasury Bond Futures - **Related Rates**: The relationship between the implied yield of the thirty - year treasury bond futures main contract and the treasury bond yield to maturity, and the relationship between the TL main contract IRR and the funding rate are presented [56] - **Basis Spread**: The three - year basis spread and net basis spread trends of the TL main contract are shown [61]

Report Industry Investment Rating - Not provided in the report Core View - The prices of Treasury bond futures showed mixed trends, with the T2603 contract rising 0.02% and its open interest increasing. The IRR of the CTD bonds corresponding to the main Treasury bond futures contracts was at a low level, with no arbitrage opportunities. Short - term market interest rates also showed mixed trends. Key - term Treasury bond yields at home and abroad had different changes, and the prices of Treasury bond futures stabilized due to factors such as central bank policies and macro - economic conditions [2][3] Summary by Relevant Catalogs Futures Market - Yesterday's closing prices of TS2603, TS2606, TF2603, TF2606, T2603, T2606, TL2603, and TL2606 were 102.430, 102.462, 105.880, 105.875, 108.200, 108.190, 112.25, and 112.36 respectively. The price changes were - 0.014, - 0.008, 0.005, - 0.005, 0.020, 0.085, 0.760, and 0.760, with corresponding percentage changes of - 0.01%, - 0.01%, 0.00%, 0.00%, 0.02%, 0.08%, 0.68%, and 0.68%. Open interest and trading volume varied, and open - interest changes were - 1054, - 262, - 194, 2516, 1698, 2880, - 78, and 1594 respectively [2] - The cross - term spreads of TS, TF, T, and TL were - 0.032, 0.005, 0.010, and - 0.110 respectively, with previous values of - 0.026, - 0.0050, 0.0750, and - 0.1100 [2] - The IRR of the active CTD bonds for each main contract was 1.5505, 1.5706, 1.6019, 1.5664, 1.6297, 1.6116, 1.9417, and 1.4765, and there were no arbitrage opportunities [2] Spot Market - Short - term market interest rates showed mixed trends. SHIBOR 7 - day rate rose 0.5bp, DR007 rate fell 0.33bp, and GC007 rate fell 1.7bp [2] - Key - term Chinese Treasury bond yields also showed mixed trends. The 10Y Treasury bond yield rose 0.57bp to 1.83%, and the long - short (10 - 2) Treasury bond yield spread was 41.78bp [2] - Overseas key - term Treasury bond yields changed. The US 10Y Treasury bond yield fell 4bp, the German 10Y Treasury bond yield fell 2bp, and the Japanese 10Y Treasury bond yield fell 5bp [2] Macro News - On January 21, the central bank conducted 363.5 billion yuan of 7 - day reverse repurchase operations, with a net injection of 122.7 billion yuan after 240.8 billion yuan of reverse repurchases matured [3] - The Minister of Housing and Urban - Rural Development said that the focus in urban renewal this year is on three aspects, and efforts will be made to stabilize the real estate market and build basic systems [3] - The US Trade Representative expressed hope for another round of potential trade negotiations with China, and the Chinese Foreign Ministry responded [3] - The People's Bank of China held a payment and settlement work meeting in 2026, putting forward requirements for payment and settlement work [3] - The Ministry of Finance and other three departments extended the tax policy for the pilot stage of innovative enterprise CDRs to December 31, 2027 [3] - The US President reached an agreement framework on the Greenland issue with the NATO Secretary - General, and the US stock market rose while spot silver fell [3] Industry Information - On January 21, most money - market interest rates rose. The weighted average interest rate of inter - bank pledged repurchase and inter - bank lending had different changes in different tenors [3] - US Treasury bond yields fell collectively, with different declines in 2 - year, 3 - year, 5 - year, 10 - year, and 30 - year yields [3] Comment and Strategy - Long - term Treasury bonds rose, and the yield of the 10 - year active Treasury bond rose to 1.823%. The central bank's net injection of reverse repurchases, stable LPR in January, and other factors affected the market. The market risk appetite declined, US Treasury bond yields fell, and the real estate market was still in adjustment [3] - In 2025, the GDP growth target of 5% was achieved as scheduled. In December, the year - on - year growth rate of social retail sales slowed down, and the year - on - year growth rate of industrial added value of large - scale industries increased. The annual fixed - asset investment decreased year - on - year, mainly dragged down by real - estate development investment [3] - The Ministry of Finance said that the fiscal deficit, total debt, and total expenditure in 2026 would remain at necessary levels, and the central bank would continue to implement a moderately loose monetary policy, with room for reserve - requirement ratio cuts and interest - rate cuts, leading to the stabilization of Treasury bond futures prices [3]