Monetary Policy Stance - The People's Bank of China (PBOC) will implement a moderately easing monetary policy [1] - The PBOC will maintain ample liquidity in the market [1] - The PBOC aims to align the growth of social financing and money supply with economic growth and price stability targets [1] - The PBOC considers promoting a reasonable rebound in prices as an important factor in monetary policy [1] Economic Objectives - The PBOC aims to maintain price levels at a reasonable level [1]

Report Overview - Report Date: August 15, 2025 [1] - Report Title: "Rebar: Demand Falls Short of Expectations, Weak and Volatile; Hot-Rolled Coil: Demand Falls Short of Expectations, Weak and Volatile" [2][3] - Analysts: Li Yafei, Jin Yuanyuan [3] 1. Investment Ratings - No specific industry investment ratings are provided in the report. 2. Core Views - Both rebar and hot-rolled coil are experiencing demand that falls short of expectations and are in a state of weak and volatile trends. The trend strength for both rebar and hot-rolled coil is -1, indicating a bearish outlook [2][3][7]. 3. Section Summaries 3.1 Fundamental Tracking - **Futures Data**: - RB2510 closed at 3,189 yuan/ton, down 59 yuan/ton (-1.82%), with a trading volume of 1,283,713 lots and an open interest of 1,636,544 lots (a decrease of 16,049 lots) [3]. - HC2510 closed at 3,432 yuan/ton, down 41 yuan/ton (-1.18%), with a trading volume of 551,741 lots and an open interest of 1,291,831 lots (a decrease of 62,005 lots) [3]. - **Spot Price Data**: - Rebar prices in Shanghai, Hangzhou, Beijing, and Guangzhou decreased by 20 - 40 yuan/ton compared to the previous day [3]. - Hot-rolled coil prices in Shanghai, Hangzhou, Tianjin, and Guangzhou decreased by 10 - 30 yuan/ton compared to the previous day [3]. - The price of Tangshan steel billet decreased by 20 yuan/ton to 3,060 yuan/ton [3]. - **Basis and Spread Data**: - The basis for RB2510 decreased by 7 yuan/ton to 131 yuan/ton, and the basis for HC2510 decreased by 1 yuan/ton to 18 yuan/ton [3]. - The spread between RB2510 and RB2601 decreased by 4 yuan/ton to -78 yuan/ton, while the spread between HC2510 and HC2601 increased by 2 yuan/ton to 6 yuan/ton [3]. - The spread between HC2510 and RB2510 increased by 14 yuan/ton to 243 yuan/ton, and the spread between HC2601 and RB2601 increased by 8 yuan/ton to 159 yuan/ton [3]. - The spot spread between hot-rolled coil and rebar increased by 21 yuan/ton to 30 yuan/ton [3]. 3.2 Macro and Industry News - **Steel Output, Inventory, and Demand Data (August 14 Steel Union Weekly Data)**: - Rebar production decreased by 0.73 tons, hot-rolled coil production increased by 0.7 tons, and the total production of five major steel products increased by 2.42 tons [4]. - Rebar inventory increased by 30.51 tons, hot-rolled coil inventory increased by 0.84 tons, and the total inventory of five major steel products increased by 2.42 tons [4]. - Rebar apparent demand decreased by 20.85 tons, hot-rolled coil apparent demand increased by 8.54 tons, and the total apparent demand of five major steel products decreased by 14.72 tons [4]. - **Financial Data (July Financial Statistics Report)**: - At the end of July, the balance of broad money (M2) was 329.94 trillion yuan, a year-on-year increase of 8.8% (compared to 8.3% at the end of June). The balance of narrow money (M1) was 111.06 trillion yuan, a year-on-year increase of 5.6%. The balance of currency in circulation (M0) was 13.28 trillion yuan, a year-on-year increase of 11.8%. In the first seven months, net cash injection was 465.1 billion yuan [6]. - In the first seven months, RMB loans increased by 12.87 trillion yuan. By sector, household loans increased by 680.7 billion yuan, corporate loans increased by 11.63 trillion yuan, and non-banking financial institution loans increased by 235.7 billion yuan [6]. - **Steel Enterprise Inventory Data (Late July)**: - The steel inventory of key steel enterprises was 14.78 million tons, a decrease of 880,000 tons (5.6%) from the previous ten-day period, an increase of 2.41 million tons (19.5%) from the beginning of the year, a decrease of 670,000 tons (4.3%) from the same ten-day period last month, a decrease of 1.27 million tons (7.9%) from the same ten-day period last year, and an increase of 290,000 tons (2.0%) from the same ten-day period the year before last [6]. - **Automobile Production and Sales Data (July)**: - In July, automobile production and sales were 2.591 million and 2.593 million vehicles respectively, a month-on-month decrease of 7.3% and 10.7% and a year-on-year increase of 13.3% and 14.7% [6]. - From January to July, automobile production and sales were 18.235 million and 18.269 million vehicles respectively, a year-on-year increase of 12.7% and 12% [6]. - **Steel Enterprise Production Data (Late July)**: - Key steel enterprises produced 21.8 million tons of crude steel, with an average daily output of 1.982 million tons (a 7.4% decrease from the previous ten-day period); 20.41 million tons of pig iron, with an average daily output of 1.856 million tons (a 4.5% decrease from the previous ten-day period); and 23 million tons of steel, with an average daily output of 2.091 million tons (a 0.5% increase from the previous ten-day period) [6]. 3.3 Trend Intensity - The trend intensity for rebar and hot-rolled coil is -1, indicating a bearish outlook. The trend intensity ranges from -2 (most bearish) to 2 (most bullish) [7].

Core Insights - The People's Bank of China reported that as of July 2025, the total RMB loan balance reached 268.51 trillion yuan, reflecting a year-on-year growth of 6.9% [1] - The total social financing scale stood at 431.26 trillion yuan, with a year-on-year increase of 9% [1] - The broad money supply (M2) was recorded at 329.94 trillion yuan, growing by 8.8% year-on-year, while the narrow money supply (M1) was 111.06 trillion yuan, up by 5.6% [1] Lending and Financial Structure - In the first seven months, RMB loans increased by 12.87 trillion yuan, with corporate loans accounting for a significant portion, totaling 11.63 trillion yuan [1] - Long-term loans for enterprises rose by 6.91 trillion yuan, making up nearly 60% of the new loans [1] - Loans in sectors such as technology, green finance, inclusive finance, elderly care, and digital economy showed growth rates exceeding the overall loan growth [1] Interest Rates and Monetary Policy - Loan interest rates remained at historical lows, with new corporate loan rates around 3.2% and new personal housing loan rates at approximately 3.1%, down by about 45 and 30 basis points year-on-year, respectively [2] - The difference in growth rates between M1 and M2 narrowed to 3.2%, indicating improved liquidity and efficiency in the financial system [2] Government Bonds and Fiscal Policy - Over 6.1 trillion yuan in new special bonds were issued in the past month, marking a record high for the year, which is expected to accelerate government bond issuance [3] - The proactive fiscal policy and moderately loose monetary policy are anticipated to support economic recovery and reasonable growth in effective credit demand [3]

Core Insights - The financial policies implemented in July have effectively supported the stable growth and structural optimization of credit in China [1] Group 1: Financial Data Overview - As of the end of July, the balance of RMB loans reached 268.51 trillion yuan, a year-on-year increase of 6.9% [1] - The total social financing scale stood at 431.26 trillion yuan, growing by 9% year-on-year [1] - The broad money supply (M2) was 329.94 trillion yuan, reflecting an 8.8% year-on-year increase [1] - The increase in social financing scale in the first seven months was 5.12 trillion yuan more than the same period last year, with government bond net financing contributing significantly [1] Group 2: Credit Structure Optimization - In the first seven months, loans to enterprises increased by 11.63 trillion yuan, with medium and long-term loans accounting for nearly 60% of this amount [5] - The balance of inclusive small and micro loans reached 35.05 trillion yuan, growing by 11.8% year-on-year [6] - Medium and long-term loans in the manufacturing sector amounted to 14.79 trillion yuan, reflecting an 8.5% year-on-year increase, both figures surpassing the growth rate of other loan categories [6] Group 3: Monetary Policy and Interest Rates - The new corporate loan interest rate was approximately 3.2% in July, down about 45 basis points from the previous year, while the new personal housing loan rate was around 3.1%, down about 30 basis points [9] - The sustained low interest rates indicate a relatively abundant credit supply, which is beneficial for reducing financial pressure on businesses [9] - The People's Bank of China has been enhancing its monetary policy toolbox to support the real economy and improve the quality of financial support [7]

Group 1: Financial Data Overview - In the first half of the year, social financing increased by approximately 47,351 billion yuan year-on-year, with RMB loans increasing by 2,796 billion yuan and government bonds increasing by 43,100 billion yuan[1] - As of June, M0 increased by 12.0% year-on-year, M1 by 4.6%, and M2 by 8.3%, with the gap between M1 and M2 growth narrowing to -3.7 percentage points[1] - The balance of RMB deposits in June grew by 8.3% year-on-year, with household deposits increasing by 10.8% and non-financial enterprise deposits by 3.6%[1] Group 2: Social Financing Structure - The social financing balance in June increased by 8.9% year-on-year, with government bonds growing by 21.3% and contributing 0.1 percentage points to the growth rate[2] - RMB loan growth stabilized at 7.0% year-on-year, contributing 0.01 percentage points to the social financing growth rate[2] - The balance of corporate bonds increased by 3.5% year-on-year, while trust loans grew by 5.5%[2] Group 3: Investment Recommendations and Risks - The financial cycle may lead the economic cycle, with M1 and M2 growth rates stabilizing and financial markets showing signs of stability[3] - Attention should be paid to monetary policy operations, financial market changes, and price movements during this phase[3] - Risks include potential changes in policy rhythm and insufficient monetary transmission effects[4]

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - In June, the total volume of the financial industry grew. The logistics and transportation in the service industry showed steady growth, with positive year - on - year growth in imports, exports, and exports in June, and the growth rates were rising. The upstream energy prices were volatile, and the prices of some agricultural products rebounded. The开工 rates of some chemical products in the mid - stream recovered, and the real - estate sales in first - and second - tier cities stopped falling but were at a near - three - year low, while the number of domestic flights increased during the summer vacation [1][2][4]. Summary by Related Catalogs 1. Production Industry - **Coal Industry**: The China National Coal Transportation and Marketing Association emphasized maintaining safety, scientific production, improving supply quality, and promoting market balance. It will act as a bridge between the government and enterprises to deal with risks [1]. - **Trade Tariffs**: The EU may impose additional counter - tariff measures on US$84 billion worth of US imported goods if the US - EU trade negotiation fails [1]. 2. Service Industry - **Monetary and Credit Data**: At the end of June, the balance of broad money (M2) was 330.29 trillion yuan, a year - on - year increase of 8.3%. The balance of local and foreign currency loans was 272.57 trillion yuan, a year - on - year increase of 6.8%. The balance of RMB loans was 268.56 trillion yuan, a year - on - year increase of 7.1%. In the first half of the year, RMB loans increased by 12.92 trillion yuan [2]. - **Foreign Trade Data**: In the first half of this year, China's total goods trade imports and exports were 21.79 trillion yuan, a year - on - year increase of 2.9%. Exports were 13 trillion yuan, an increase of 7.2%, and imports were 8.79 trillion yuan, a decrease of 2.7%. In June, imports, exports, and exports all achieved positive year - on - year growth [2]. 3. Industry Overview Upstream - **Energy**: International oil prices fluctuated [2]. - **Agriculture**: Palm oil prices rebounded [2]. Mid - stream - **Chemical Industry**: The operating rates of urea and PTA recovered, while the operating rates of PX and polyester remained stable [3]. Downstream - **Real Estate**: The sales of commercial housing in first - and second - tier cities stopped falling but were at a near - three - year low [4]. - **Service**: The number of domestic flights increased during the summer vacation [4]. 4. Industry Credit Spread Tracking - As of July 13, the credit spreads of various industries showed different trends. For example, the credit spread of the agriculture, forestry, animal husbandry, and fishery industry decreased from 54.16 last week to 49.63 this week, and the credit spread of the mining industry decreased from 33.69 last week to 30.03 this week [51]. 5. Key Industry Price Index Tracking - As of July 11, the prices of various industries showed different trends. For example, the spot price of corn was 2351.4 yuan/ton, a year - on - year decrease of 0.66%, and the spot price of palm oil was 8944.0 yuan/ton, a year - on - year increase of 2.69% [52].

Core Viewpoint - The People's Bank of China reported that the total social financing scale increased significantly in the first half of the year, supported mainly by government bonds, with a notable rise in M2 growth due to a low base effect from the previous year [1][2]. Group 1: Social Financing and M2 Growth - In the first half of the year, the total social financing scale increased by 22.83 trillion yuan, which is 4.74 trillion yuan more than the same period last year [2]. - As of the end of June, the social financing scale and M2 balance grew by 8.9% and 8.3% year-on-year, respectively, with increases of 0.8 and 2.1 percentage points compared to the previous year [2][4]. - Government bond net financing contributed significantly, with an addition of 7.66 trillion yuan, accounting for 91.1% of the total increase in social financing [2][4]. Group 2: Monetary Policy and Economic Support - The financial data from the first half of the year indicates that monetary policy has effectively supported the real economy, with expectations for continued reasonable growth in credit in the second half [6]. - The central bank plans to maintain a moderately loose monetary policy to support economic and social development goals for the year [6]. - Experts predict that as the effects of government bond issuance and low base effects diminish, the growth rate of financial totals will stabilize at reasonable levels [6]. Group 3: Credit and Loan Growth - As of the end of June, the balance of RMB loans reached 268.56 trillion yuan, with a year-on-year growth of 7.1%, although this is about 1.7 percentage points lower than the previous year [7][8]. - In the first half of the year, RMB loans increased by 12.92 trillion yuan, with 2.24 trillion yuan added in June alone [8]. - The loan structure showed positive trends, with significant increases in loans to manufacturing and infrastructure sectors, and a notable rise in loans related to the "five major areas" of finance [8].

Core Viewpoint - The People's Bank of China (PBOC) is implementing a moderately accommodative monetary policy to support economic recovery, with a focus on maintaining liquidity and promoting reasonable growth in money and credit supply [1][2][5]. Monetary Policy Implementation - The PBOC has introduced a series of monetary and credit policies, including a package of 10 measures announced on May 7, aimed at enhancing liquidity and supporting the economy [6][7]. - As of the end of June, the social financing scale and broad money supply (M2) grew by 8.9% and 8.3% year-on-year, respectively, with increases of 0.8 and 2.1 percentage points compared to the previous year [1][2]. Financial Support for the Real Economy - In the first half of the year, the incremental social financing scale reached 22.83 trillion yuan, an increase of 4.74 trillion yuan year-on-year, indicating that the financial system is effectively meeting the funding needs of the real economy [2][5]. - The PBOC emphasizes the need for time to observe the effects of implemented monetary policies and will continue to assess their transmission and effectiveness [2][5]. Focus Areas for Future Policies - The PBOC plans to maintain a balance between supporting the real economy and ensuring the health of the financial system, with a focus on sectors such as technology innovation, consumption expansion, and support for small and micro enterprises [9][10]. - The PBOC aims to enhance the effectiveness of financial services to the real economy by improving the policy framework and ensuring that monetary policy tools are effectively utilized [9][10]. Currency Exchange Rate Management - The PBOC is committed to maintaining the flexibility of the RMB exchange rate while preventing excessive fluctuations, with a focus on stabilizing the currency at a reasonable equilibrium level [10][11]. - Recent trends show that the RMB has remained stable against the USD, with fluctuations managed effectively since early April [10][11].

Core Viewpoint - The People's Bank of China (PBOC) has released financial statistics for the first half of 2025, indicating a moderate monetary policy aimed at maintaining liquidity and supporting the real economy. Group 1: Monetary Supply - Broad money (M2) increased by 8.3% year-on-year, reaching 330.29 trillion yuan by the end of June [2] - Narrow money (M1) grew by 4.6% year-on-year, totaling 113.95 trillion yuan [2] - Cash in circulation (M0) rose by 12% year-on-year, amounting to 13.18 trillion yuan, with a net cash injection of 363.3 billion yuan in the first half [2] Group 2: Loans and Deposits - Total RMB loans increased by 12.92 trillion yuan in the first half, with a year-on-year growth of 7.1% [3] - Household loans rose by 1.17 trillion yuan, while corporate loans increased by 11.57 trillion yuan [3] - Total RMB deposits grew by 17.94 trillion yuan in the first half, with a year-on-year growth of 8.3% [5] Group 3: Foreign Currency Loans and Deposits - Foreign currency loans decreased by 10.6% year-on-year, with a total balance of 560.9 billion USD [4] - Foreign currency deposits increased by 21.7% year-on-year, reaching 1.02 trillion USD [6] Group 4: Interbank Market and Interest Rates - The average weighted interest rate for interbank RMB lending was 1.46%, lower than the previous month and the same period last year [8] - The total transaction volume in the interbank RMB market was 974.04 trillion yuan, with a daily average transaction of 8.12 trillion yuan, reflecting a year-on-year decline of 4.4% [7] Group 5: Foreign Exchange Reserves and Cross-Border Settlements - The national foreign exchange reserves stood at 3.32 trillion USD by the end of June [9] - Cross-border RMB settlement for current accounts reached 8.3 trillion yuan, with direct investment settlements totaling 4.11 trillion yuan [10] Group 6: Monetary Policy Outlook - The PBOC aims to implement a moderately loose monetary policy, ensuring ample liquidity and aligning monetary supply growth with economic growth and price expectations [11] - The focus will be on enhancing financial services for the real economy, particularly in technology innovation, consumption expansion, and support for small and micro enterprises [11]

Investment Rating - The report indicates a shift in asset allocation strategies, with a focus on fixed income assets, European equities, Hong Kong stocks, and gold, suggesting a cautious outlook on U.S. equities due to economic pressures [1][2]. Core Insights - The U.S. debt burden is projected to reach $1.4-1.5 trillion by 2025, exceeding 20% of fiscal revenue, which poses potential risks to the economy [1][4]. - The U.S. economy is currently facing high inflation, high interest rates, and rising wages, which historically correlate with economic downturns [1][6]. - There is a notable decline in corporate financing activities due to increased costs and policy uncertainties, leading to a decrease in money supply growth [1][7]. Summary by Sections Global Economic Context - The report highlights a reallocation of funds from U.S. equities to non-U.S. markets, particularly European equities and fixed income assets, driven by reduced support for the U.S. economy [2]. U.S. Debt Situation - The U.S. national debt has doubled post-pandemic, with interest burdens rising rapidly, leading to concerns about sustainability and economic stability [3][4]. - The Trump administration's measures to address the debt crisis, including increasing revenue and negotiating lower interest rates, have had limited success [5]. Economic Challenges - The combination of high inflation, interest rates, and wages is squeezing corporate profitability, raising concerns about potential profit contractions [6]. - Increased financing costs and policy uncertainties are leading to reduced corporate borrowing and investment activities [7]. Fixed Income Opportunities - Global central banks, particularly the European Central Bank, are in a trend of lowering interest rates, creating investment opportunities in fixed income categories despite short-term uncertainties in the U.S. and U.K. [8]. Future Outlook - The report anticipates continued opportunities in the bond market, suggesting that investors should actively allocate to bond assets, especially in the upcoming third quarter [14].