China Materials_ Demand Tracker – October 18

Summary of Key Points from the Conference Call Industry Overview - Industry Focus: China Materials, specifically the construction and real estate sectors, including cement, steel, and electric vehicles (EVs) [1][1][1] Core Insights and Arguments - Urban Village Redevelopment: The Ministry of Housing and Urban-Rural Development (MOHURD) announced a new batch of 1 million units for urban village redevelopment, supported by monetary resettlement and an increased funding quota of RMB 4 trillion by year-end [1][1][1] - Cement Production: Cement producers in Xinjiang will suspend off-peak production for 135-180 days during winter 2024-25, indicating a strategic response to seasonal demand fluctuations [1][1][1] - Steel Production: Crude steel output from major producers was reported at 2.049 million tons in early October, reflecting a 1.7% increase compared to late September [1][1][1] - Electric Vehicle Sales: Retail sales of passenger vehicles (PV) reached 823,000 units from October 1-13, marking a 20% year-over-year increase, with new energy vehicles (NEVs) accounting for 408,000 units, up 64% year-over-year [1][1][1] - Government Subsidies: RMB 13 billion of central government subsidies under the trade-in program facilitated the sale of 4.6 million home appliances, indicating strong consumer demand [1][1][1] Additional Important Information - Local Government Bonds: Local government special bond issuance totaled RMB 308 billion in October, bringing the year-to-date total to RMB 3.8 trillion, which is approximately 97.5% of the total quota [1][1][1] - Construction Projects: Over 36,000 industrial projects are set to begin construction in 2024, projected to drive investments exceeding RMB 11 trillion over the next three years [1][1][1] - Cement and Steel Demand Trends: Weekly cement shipments in eastern China improved due to peak season demand, while apparent consumption of long and flat steel products showed mixed results, with long products up 5.6% week-over-week [1][1][1] Conclusion - The conference call highlighted significant developments in the Chinese materials sector, particularly in construction and real estate, driven by government policies and consumer demand. The data indicates a positive outlook for the industry, with substantial investments and production adjustments in response to market conditions [1][1][1]