Summary of Key Points from the Conference Call Industry Overview - Industry: Global Metals & Mining - Focus: Total Social Financing (TSF) and Steel Demand in China Key Insights 1. Strong Start to TSF in China: - January 2025 TSF reached 7.06 trillion RMB, marking a 9% year-over-year increase, the strongest monthly TSF on record [1] - January typically accounts for 16% of the annual TSF, but this year it represented 22% of the new TSF for 2024 [1] 2. Forecast for FY 2025: - If normal seasonality is applied, the total TSF for FY 2025 could reach 45 trillion RMB, representing a 40% year-over-year increase [1] - Despite the strong TSF in January, steel demand in FY 2025, particularly in the first half, is expected to be impacted by the lag effect from weak FY 2024 TSF and a declining infrastructure build cycle [1] 3. Government Bond Issuance: - Government bond financing in January 2025 was strong at 693 billion RMB, compared to 295 billion RMB in January 2024 [2] - Total government bond financing is expected to expand to 14.5 trillion RMB in 2025, with 11.5 trillion RMB aimed at pro-growth efforts [2] 4. Corporate and Household Credit Trends: - Corporate long-term loans increased by 3,460 billion RMB in January 2025, marking the first year-on-year increase since March 2024 [2] - Household credit remains subdued, with short-term loans contracting by 50 billion RMB and long-term loans increasing by 494 billion RMB, both lower than January 2024 levels [2] 5. Infrastructure and Property Concerns: - The infrastructure construction pipeline backlog is shrinking, indicating a potential decrease in future demand for ferrous metals [3] - Property market data remains weak, leading to cautious market sentiment regarding ferrous metals [3] Additional Important Points - CNY Holiday Impact: The strong TSF figures in January were achieved despite part of the Chinese New Year holiday falling within the month, which typically affects economic activity [1] - Market Sentiment: The market is expected to remain cautious until there is a clear inflection point in property data, which continues to be a concern for the metals sector [3]
Global Metals & Mining_ Strong start to TSF for the year in China (Jan’25_ +9%y_y), a record new TSF in a holiday-impacted month
2025-02-18 05:16