Group 1: Fiscal Performance Overview - The growth rate of broad fiscal expenditure in January-February exceeded budget targets, indicating proactive fiscal measures to support economic growth, with total expenditure increasing by 6.1% year-on-year against a budget target of 4.6%[13] - General public budget revenue for January-February was 4.4 trillion yuan, a year-on-year increase of 0.7%, while expenditure was 4.7 trillion yuan, up 3.6% year-on-year[7] - The first account expenditure grew by 3.6% year-on-year, while the second account expenditure surged by 16%, primarily due to the early issuance and timely use of local special bonds[13] Group 2: Revenue Insights - Tax revenue remained nearly flat, with a slight increase of 0.1% year-on-year, while non-tax revenue saw a significant rise of 3.4%[13] - Among major tax categories, only value-added tax maintained positive growth, while consumption tax, corporate income tax, and personal income tax all experienced declines[9] - The securities transaction stamp duty saw a remarkable year-on-year increase of 110%[10] Group 3: Expenditure Trends - Infrastructure spending turned positive with a year-on-year increase of 2.4%, reversing a previous decline of 6.6% in 2025[14] - Social security and health care remain key areas of focus, contributing 1.6 percentage points and 1.3 percentage points to public fiscal expenditure growth, respectively[14] - Interest payment expenditure increased by 22% year-on-year, accounting for 4.1% of total fiscal expenditure, raising concerns about future debt servicing pressures[14] Group 4: Land Sales and Special Bonds - Land sale revenue decreased by 25% year-on-year, significantly impacting fund income, which fell by 16%[14] - Fund expenditure increased by 16%, with 60% supported by special bonds, highlighting the reliance on these instruments for funding[14] - The total quota for local special bonds remains at 4.4 trillion yuan, balancing multiple objectives including project construction and debt repayment, suggesting limited high growth potential for these bonds throughout the year[14]

Core Viewpoint - The issuance scale of special bonds has been continuously expanding, becoming an important tool for macroeconomic governance and a key measure for implementing proactive fiscal policies [1] Group 1: Special Bonds Overview - Special bonds have seen an increase in issuance scale and diversification in their application fields [1] - The discussion on special bonds involves key figures from Shanghai University of Finance and Economics and industry experts, focusing on their role and implications [1] Group 2: Expert Contributions - Fan Ziying, Dean of the School of Taxation and Investment, discusses the institutional dilemmas and reform directions of special bonds [7] - Zhao Zenghui, Chief Analyst of Fixed Income at Changjiang Securities, addresses how financial institutions view special bonds in terms of value contribution and risk challenges [8] - An Xinhua, Director of Beijing Zhonghui Law Firm, explores the long-term governance mechanisms for government debt [10]

Group 1 - The core viewpoint of the article emphasizes the importance of coordinating monetary and fiscal policies to ensure a strong start for China's 14th Five-Year Plan [1] - The macroeconomic regulation during the 14th Five-Year Plan period faces a complex landscape of multiple goals and constraints, essentially seeking optimal solutions under various constraints [3] - The central bank needs to smooth short-term fluctuations while strengthening medium- to long-term support for liquidity, as commercial banks hold approximately 68% of national debt and 75% of local government debt [4] Group 2 - On the pricing aspect, the central bank can lower the 7-day reverse repurchase rate to guide down the yield on government bonds, which helps reduce government financing costs and alleviate fiscal interest burdens [5] - In a low-interest-rate environment, the elasticity of consumption and investment to interest rate changes is relatively limited, leading to pressure on banks' net interest margins and profitability [5] - Compared to interest rate cuts, reserve requirement ratio reductions are more effective in providing medium- to long-term liquidity and supporting bond issuance and trading [5] Group 3 - Fiscal and monetary policies demonstrate strong consistency and matching in terms of policy tools, implementation timing, and rhythm [7] - In the field of technological innovation, the central bank has introduced re-loans for technological innovation at preferential rates, while the Ministry of Finance has launched loan interest subsidy policies to reduce financing costs for enterprises [8] - To boost consumption, the central bank has established re-loans for service consumption and elderly care, while fiscal policies include direct cash flow improvements through subsidies and consumption vouchers [8] Group 4 - Monetary policy structural tools, such as various re-loans, essentially provide preferential loans to commercial banks, guiding them to allocate funds to specific sectors [9] - Fiscal policy tools are more equity-like, providing long-term capital to the economy or financial institutions, which can directly bear risks and losses, aligning with long-term structural adjustment needs [9] - Overall, monetary policy through medium- to long-term liquidity provision and policy interest rate adjustments works in tandem with fiscal policy to ensure smooth government bond issuance and stabilize financing costs, thereby expanding total demand [9]

1. Report Industry Investment Rating - Not provided in the report 2. Core View of the Report - The hot-rolled coil is expected to continue to operate in a volatile and slightly stronger manner. The short - and medium - term trends are strengthening, with cost support from raw materials, supply pressure relieved by production decline, and demand showing a post - holiday recovery but still at a low level in recent years. Attention should be paid to the sustainability of demand and the subsequent inventory reduction rhythm [5] 3. Summary by Relevant Catalogs Market行情回顾 - **Futures price**: The main contract of hot - rolled coil futures reduced its positions by 14,370 lots on Monday, with a trading volume of 292,044 lots, which was lower than the previous trading day. The short - term moving average broke through the 5 - day moving average around 3278, the 30 - day moving average was 3250, and the medium - term pressure was around the 60 - day moving average of 3265 [1] - **Spot price**: The price of hot - rolled coil in Shanghai, a mainstream area, was reported at 3280 yuan/ton, remaining stable compared with the previous trading day [2] - **Basis**: The basis between futures and spot was - 19 yuan [3] Fundamental Data - **Supply side**: The actual weekly output was 295.26 million tons, a week - on - week decrease of 5.85 million tons and a year - on - year decrease of 23.39 million tons. Steel mills actively reduced production, and both the year - on - year and month - on - month production decreased, alleviating the supply - side pressure [4] - **Demand side**: The apparent consumption was 295.36 million tons, a week - on - week increase of 13.79 million tons and a year - on - year decrease of 35.99 million tons. The weekly apparent demand rebounded, but it was still weak year - on - year, and the demand had not formed a continuous warming trend [4] - **Inventory side**: The social inventory was 382.31 million tons, a week - on - week increase of 0.70 million tons and a year - on - year increase of 50.41 million tons, showing continuous inventory accumulation. The steel mill inventory was 89.28 million tons, a week - on - week decrease of 0.8 million tons, indicating a reduction in in - plant inventory. The total inventory was 471.59 million tons, a week - on - week decrease of 0.1 million tons and a year - on - year increase of 55.37 million tons. The total inventory increased significantly year - on - year, the social inventory accumulated obviously, the inventory - to - sales ratio was still at a high level, and the market inventory reduction pressure was not fundamentally relieved [4] - **Policy side**: On March 5, 2026, the National Two Sessions were held. The government work report proposed to issue 1.3 trillion yuan of ultra - long - term special treasury bonds and arrange 4.4 trillion yuan of special bonds to strengthen the support for infrastructure and "two new" projects, boosting the medium - and long - term market confidence. However, the current manufacturing PMI was still in the contraction range, downstream orders had not improved substantially, and it would take time for policies to be transmitted to the hot - rolled coil demand side, making it difficult to reverse the high - inventory pattern in the short term [4] Market Driving Factor Analysis - **Bullish factors**: Supply contraction, demand resilience, policy support ("15th Five - Year Plan", infrastructure investment), and stronger raw materials [5] - **Bearish factors**: Slow realization of demand, inventory accumulation suppressing prices, and increased macro - level disturbances [5]

Core Viewpoint - The article emphasizes the implementation of a more proactive fiscal policy in China, focusing on stimulating consumption and investment, ensuring the operation of grassroots finances, mitigating debt risks, and supporting the construction of a unified national market. The policy aims to enhance local government motivation and improve fiscal sustainability in the long term [4][5]. Fiscal Policy Strength - The fiscal policy is characterized by a high deficit rate of 4%, with the deficit scale reaching 5.89 trillion yuan, an increase of 230 billion yuan from 2025. The total public budget expenditure is projected to reach 30 trillion yuan in 2026, marking a significant increase in necessary spending to stabilize overall demand and support economic and livelihood goals [6][7]. - The issuance of special bonds remains at the same level as the previous year, balancing the needs for growth stabilization and debt resolution while expanding the range of eligible projects [7][8]. Structural Optimization of Fiscal Policy - The article highlights significant optimization in expenditure structure, deficit structure, and transfer payment structure, aiming to enhance the effectiveness of limited fiscal funds. There is a notable increase in spending on social welfare and technological innovation, with a shift towards balancing investment and consumption [14][15]. - The central government's deficit share has increased significantly, accounting for 86.4% of the total deficit, which alleviates local financial burdens and optimizes the debt structure between central and local governments [15]. Tax and Subsidy Policy Regulation - The article discusses the need to standardize tax incentives and fiscal subsidy policies to promote a unified national market. This regulation aims to break down regional barriers, foster healthy competition among enterprises, and enhance the efficiency of fiscal fund utilization [18][19]. Local Government Support - The report stresses the importance of ensuring the "three guarantees" for local governments, addressing fiscal difficulties caused by real estate adjustments. It suggests increasing central transfer payments and raising local debt limits to restore local governments' economic development capabilities [21][22]. Debt Management and Risk Mitigation - The article outlines a shift in debt management from short-term risk policies to long-term structural mechanisms. It emphasizes the need for a unified government debt management system and the importance of categorizing and regulating local government financing platforms to prevent operational debt from becoming hidden government debt [23][24].

1. Report Industry Investment Rating - Not provided in the document 2. Core Viewpoints of the Report - The steel and ore markets are expected to fluctuate with a bullish bias in March, and attention should be paid to the strength of demand. If demand recovery falls short of expectations, prices may decline again. Additionally, potential impacts from the Iran situation should be monitored [6]. - The strategy of going long on rebar and short on hot-rolled coils can be considered, with a stop-profit target of over 200 points [5]. - For single-sided trading, a bullish approach can be attempted with appropriate stop-loss settings [6]. 3. Summary by Relevant Catalogs Part 1: Review 1.2 Market Review - In February 2026, rebar prices fluctuated downward with a small range, reaching a maximum of 3139 and a minimum of 3005 [10]. - In February, iron ore prices trended downward. The main iron ore contract reached a maximum of 797.0 and a minimum of 736.0 [12][13]. Part 2: Current Analysis 2.1 Macro Logic - In 2025, China's GDP growth rate was 5.0%. The recent government work report set the economic growth target for 2026 at 4.5% - 5% [17]. - In the first quarter of 2026, advance issuance of special bonds and implementation of "two new" subsidies (equipment renewal and consumer goods trade-in) took place. Structural monetary tools were used to cut interest rates and increase new re-lending quotas to support private and innovative enterprises. Domestic demand was restored, with consumption moderately recovering and infrastructure investment accelerating, but the real estate sector was still in a bottoming - out phase. External demand remained resilient, with exports maintaining positive growth on a high base, but the Iran situation might affect exports and drag down the first - quarter economic growth [17]. 2.2 Supply - Demand Logic - **Real Estate**: Real estate is the core demand source for construction steel, accounting for over 60% of construction steel demand and 25% - 30% of the country's total steel demand, and its proportion in total steel demand is decreasing. Since 2021, real estate investment and other indicators have turned negative, and steel prices have entered a downward cycle. In 2025, the cumulative year - on - year growth rate of new construction area was - 20.4%, the year - on - year growth rate of construction area was - 10.0%, and the year - on - year growth rate of completion area was - 18.1%. The leading indicator, land transaction area, decreased by 10.4% year - on - year, indicating a continued decline in steel demand for real estate new construction and main construction in 2026 - 2027 [21][24]. - **Special Bonds**: In 2025, the total issuance of special bonds reached a record high of about 7.68 trillion yuan, including about 4.59 trillion yuan in new special bonds and about 3.09 trillion yuan in refinancing special bonds. Special bonds were mainly invested in infrastructure, which directly drove the demand for construction steel. In 2026, about 4.6 trillion yuan in new special bonds are expected, and the advance issuance and disbursement of special bonds in the first quarter will provide funds for demand recovery in March [27][31]. - **Infrastructure Investment**: In 2025, infrastructure investment decreased by 2.2% year - on - year, the first negative growth in recent years, showing a quarterly slowdown. In 2026, with the support of fiscal policies, the disbursement of special bond funds in March will drive the start of steel - using projects and may be the core driving force for a rebound [31]. - **Manufacturing**: In 2025, national manufacturing investment increased by 0.6% year - on - year, a significant decline from 2024, leading to a slowdown in the growth rate of steel demand in machinery, equipment, and home appliances. In 2026, the automotive industry showed structural differentiation, with production expected to rebound in March. The shipbuilding industry maintained high - level prosperity, and the output of excavators and home appliances showed seasonal fluctuations [35][36][37]. - **Steel Exports**: In January 2026, China's steel exports decreased significantly. In February, exports continued to decline, and in March, exports are expected to recover but with limited strength. The Iran situation has a significant indirect impact on steel exports [40]. - **Steel Production**: In 2025, China's crude steel production was 961 million tons, a year - on - year decrease of 4.4%. In February 2026, steel production decreased significantly, and in March, it is expected to rebound significantly but may be restricted by various factors [41]. - **Iron Ore Supply**: In 2025, China's iron ore imports were 1.259 billion tons, a year - on - year increase of 1.8%. In March 2026, iron ore supply is expected to remain at a high level, and port inventories reached a two - year high in February [46]. - **Domestic Iron Ore Production**: In 2025, China's domestic iron ore production decreased by 2.8% year - on - year. In February, the operating rate of northern mines declined, and in March, it is expected to gradually recover, but the production increase is limited [50].

1. Report Industry Investment Rating - No relevant content provided 2. Core Views of the Report - The report anticipates that in February 2026, steel and iron ore will generally experience a volatile market. Steel products may be volatile and weak, while iron ore may be volatile and strong. Specifically, hot-rolled coils may outperform rebar. The main range for rebar is expected to be between 3050 - 3200, and for hot-rolled coils, between 3300 - 3450. The iron ore price will follow the rhythm of steel product profits and molten iron production, with the main range between 730 - 830 [6]. 3. Summary by Directory Part 1: Review - In January 2026, rebar prices were range-bound with limited fluctuations, failing to break above 3200 at the highest and reaching a low of 3085 [9]. - Compared to steel products, iron ore prices were more volatile, showing an inverted V-shaped trend during the month. The main iron ore contract reached a high of 831.5 and a low of 778.0 [12][13]. Part 2: Current Analysis 2.1 Macro Logic - In the long run, GDP is the "anchor" for steel prices. The quality and speed of economic growth determine the long - term central level of steel prices. In 2024, China's GDP growth rate was 5.2%, with positive fixed - asset investment, a narrowing decline in the real estate sector, and strong resilience in infrastructure and manufacturing. Steel prices showed an inverted V - shape, and GDP had a weak positive correlation with steel prices. In 2025, China's GDP growth rate was 5.0%, just meeting the target. Fixed - asset investment growth turned negative, and the decline in the real estate sector widened. Economic growth relied more on consumption, high - end manufacturing, and exports (not the main steel - using sectors). The "basic support" of GDP for steel prices failed, and the steel price center directly shifted downward, showing a weak pattern [17]. 2.2 Supply - Demand Logic - **Real Estate**: Real estate is the core demand source for construction steel, accounting for over 60% of construction steel demand and 25% - 30% of the total national steel demand, but its proportion in total steel demand is decreasing. Since 2021, real estate investment and other indicators have turned negative, and steel prices have been in a downward cycle since then. In 2025, key indicators such as new construction area, construction area, and completion area were all weak, with the cumulative year - on - year growth rate of new construction area at - 20.4%, construction area at - 10.0%, and completion area at - 18.1%. The land transaction area also decreased by 10.4% year - on - year, indicating continued weak demand for construction steel such as rebar [21][24]. - **Infrastructure**: In 2025, the total issuance of special bonds reached a record high, with about 4.59 trillion yuan in new special bonds (45% of the total local bond issuance of 10.29 trillion yuan) and about 3.09 trillion yuan in refinanced special bonds. Special bonds were front - loaded and accelerated in the fourth quarter. They were mainly invested in infrastructure, including urban, transportation, and industrial park projects, accounting for about 46%. In 2025, infrastructure investment decreased by 2.2% year - on - year. In 2026, about 4.6 trillion yuan in new special bonds are expected, along with about 1.5 trillion yuan in ultra - long - term special treasury bonds. The early issuance and accelerated allocation of special bonds in the first quarter will provide financial support for demand recovery in March [27][31]. - **Manufacturing**: In 2025, national manufacturing investment increased by 0.6% year - on - year, a significant decline from 2024. High - end manufacturing such as automobiles, new energy equipment, and ships had high - growth investment, driving demand for high - strength steel, electrical steel, and automotive sheets. In 2025, China's automobile production reached 30.2 million units, a year - on - year increase of 11.5%. In February 2026, production is expected to decline month - on - month due to the Spring Festival, but it will rebound in March [35]. - **Shipbuilding and Machinery**: In 2025, China's shipbuilding completion volume was 42.6 million deadweight tons, a year - on - year increase of 12.4%, with a global share of over 50%. New orders and year - end orders were at high levels. In 2025, the production of excavators, loaders, and other machinery increased. In February 2026, production is expected to decline due to the Spring Festival, but it will recover in March [36]. - **Home Appliances**: In 2025, the overall production of home appliances increased moderately. In February 2026, the planned production of major home appliances decreased by 22.1% year - on - year. In March, production is expected to increase by 15% - 20% month - on - month [36]. - **Steel Exports**: In 2025, China's steel exports reached a record high of 119.019 million tons, a year - on - year increase of 7.5%, while imports decreased by 11.1%. In February 2026, exports are expected to continue to decline and may turn negative year - on - year. Exports are expected to recover in March, but the rebound will be limited [39]. - **Steel Production**: In 2025, China's crude steel production was 961 million tons, a year - on - year decrease of 4.4%. In February 2026, due to the Spring Festival, steel production decreased significantly. In March, production is expected to rebound significantly, but it will be restricted by various factors and may not exceed the same - period high in 2025 [40]. - **Iron Ore Supply**: In 2025, China imported 1.259 billion tons of iron ore, a year - on - year increase of 1.8%. In February 2026, iron ore demand decreased due to steel mill maintenance. In March, demand is expected to increase as steel mills resume production. Australian and Brazilian mines are in the traditional shipping peak season from February to March, and new mines such as Simandou will gradually increase supply in 2026. In 2025, China's iron ore production decreased by 2.8% year - on - year. In February 2026, production decreased due to the Spring Festival, and it is expected to recover in March, but the production increase is limited [44][47]. 4. Operation Suggestions - **Rebar**: Mainly wait and see. Try to go long lightly at 3050 - 3100 and take profit above 3200; try to go short lightly at 3200 - 3250 with a stop - loss at 3300 [6]. - **Hot - rolled Coils**: Try to go long lightly at 3300 - 3350 and take profit at 3450 - 3500; try to go short lightly above 3450 with a stop - loss at 3500 [5]. - **Iron Ore**: Try to go long lightly at 730 - 750 and take profit above 800; try to go short lightly above 830 with a stop - loss at 900 [5]. - **Spread Trading**: Go long on rebar and short on hot - rolled coils (usually an opportunity appears after the Spring Festival). Layout when the spread is 100 - 120, take profit around 200, and set a stop - loss at 70 [5].

Group 1 - The core driving force behind the recent rise in asphalt prices is the geopolitical event of the U.S. raid on Venezuela, which has raised concerns about oil supply [1] - Venezuela's oil, particularly from the Maracaibo Lake region and the Orinoco heavy oil belt, is crucial for U.S. refineries that primarily process medium crude oil, making it an important supplement to shale oil [1] - In 2025, China's total asphalt production was 28.7 million tons, a year-on-year increase of 9.1%, with refineries using or blending with Maracaibo crude producing approximately 15.13 million tons, up 13.7% year-on-year [1] Group 2 - The domestic refinery raw material issues are still under negotiation, and the changes in heavy oil premium will be a key variable moving forward [2] - Currently, during the winter storage season, refineries in Hebei and Shandong have launched winter storage contracts for January to March, with initial prices ranging from 2,920 to 3,000 yuan per ton [4] - The geopolitical disturbances continue to support crude oil prices, which have raised asphalt costs by approximately 400 yuan per ton [5]

Core Viewpoint - The financing landscape for government platform companies in 2026 is undergoing significant adjustments, focusing on market-oriented transformations and compliance requirements, supported by proactive fiscal and moderate monetary policies [1]. Group 1: Government Bond Financing - Local government special bonds will see a major breakthrough in quota, usage, and duration, serving as a cornerstone for platform company financing [3]. - The new special bond quota will be determined by the Ministry of Finance, with early allocations expected to meet the funding needs of key projects [3]. - The proportion of project capital that can be covered by special bonds remains stable at 30%, effectively leveraging market financing [3]. Group 2: Policy and Market Tools - Policy-driven financial tools will provide over 1 trillion yuan in credit and 500 billion yuan in structural tools, targeting key strategic projects [8]. - New regulations for trust financing will introduce four compliant products, allowing white-listed enterprises to access funds within one month [9]. - Bank loans will benefit from reduced interest rates and innovative collateral options, with guarantee fees dropping below 1% [10]. Group 3: Innovative Financing and Industry Empowerment - The focus on "stock activation" and "industry empowerment" will drive new financing models, including REITs and data asset financing [11]. - Infrastructure REITs will expand rapidly, with new asset classes being included and approval processes streamlined [12]. - Industry funds will target strategic emerging industries, leveraging government and social capital partnerships to enhance investment [13]. Group 4: Debt Resolution and Credit Enhancement - A plan for replacing 2.8 trillion yuan of hidden debt will be implemented, emphasizing the use of various channels for debt optimization [17]. - Government financing guarantees will be enhanced, allowing for a tenfold increase in support for market-oriented projects [18]. - State-owned capital operations will focus on integrating quality assets to improve financing capabilities [20]. Group 5: Compliance Requirements for Financing - Platform companies must meet six core compliance requirements to secure financing, including a minimum credit rating of AA- and restrictions on financing purposes [21]. - The focus areas for financing are limited to compliant sectors such as infrastructure and urban renewal, with strict prohibitions on real estate investments [21]. - Clear repayment sources and robust credit enhancement measures are essential for compliance with market financing requirements [21].

Macro Economic Overview - The structure of special bond expenditures in 2025 reflects the fiscal strategies of different local governments, indicating a shift in focus towards debt repayment rather than infrastructure investment [3][4][5] - The total issuance of special bonds in 2025 reached 4.59 trillion yuan, an increase of approximately 590 billion yuan compared to 2024, marking the highest absolute scale in five years [4] - The proportion of special bonds allocated for debt repayment has increased significantly, with 21 provinces raising the share of funds used for debt repayment, particularly in economically significant provinces [5][6] Industry Insights - The chemical industry, particularly companies like Xinxiang Chemical Fiber, is positioned as a leader in the spandex and viscose filament sectors, with expectations for significant profit growth due to rising demand and the elimination of outdated production capacity [32][33] - Xinxiang Chemical Fiber plans to expand its production capacity, with new projects expected to generate substantial additional revenue and profit, indicating a strong growth trajectory in the coming years [34] Investment Trends - The demand for spandex is on the rise, with its penetration in the textile industry continuously increasing, supported by the ongoing elimination of outdated production capacity [33] - The company is expected to benefit significantly from the anticipated upturn in spandex market conditions, with projected net profits for 2025-2027 being 1.53 billion, 3.10 billion, and 5.48 billion yuan respectively [32]