China Materials_ Demand Tracker – February 28

Summary of Key Points from the Conference Call Industry Overview - Industry: China Materials, specifically focusing on construction, steel, cement, and lithium sectors Core Insights and Arguments 1. Construction Activity: - The work resumption rate of sampled construction projects was 64.6% in the fourth week after the holiday, which is 10.8% lower year-over-year (YoY) [1][5][7] - The labor return rate for construction projects was also lower at 61.7% compared to previous years [7] 2. Steel Production: - Average daily output of major steel mills was reported at 2.151 million tons (mnt), reflecting a 0.8% increase compared to early February [2] - Apparent consumption of long and flat steel products increased by 12.7% and 0.6% week-over-week (WoW), respectively, but showed declines of 8.1% and 3.6% YoY [5] 3. Cement Production: - Hubei Huangshi is promoting off-peak cement production, urging production based on approved capacity [2] - Cement shipments in eastern China improved but remained lower YoY due to slow construction resumption [5] 4. Lithium Supply: - Weekly production of lithium carbonate increased by 14.08% WoW, with inventory rising by 3.35% WoW [2] - Domestic lithium supply in China is projected to reach 770,000 tons of lithium carbonate equivalent (LCE) by 2027, an increase of 83.3% over 2024 levels [2] 5. Automotive Sales: - CPCA forecasts auto wholesale sales to reach 32.66 million units in 2025, a 4% YoY increase, with new energy vehicle (NEV) sales expected to rise by 28% YoY to 15.65 million units [3] 6. Real Estate and Infrastructure Stimulus: - Weekly primary unit sales in 50 cities increased by 15% YoY, contrasting with a 23% decline the previous week [4] - Major construction state-owned enterprises (SOEs) signed new contracts worth RMB 360.8 billion in January 2025, a 5% decrease YoY [4] 7. Local Government Bond Issuance: - Monthly local government special bond issuance totaled RMB 392 billion as of February 28, bringing the year-to-date total to RMB 596.8 billion [4] Additional Important Insights - Market Sentiment: The overall industry view remains attractive despite the current challenges in construction and production rates [7] - Policy Impact: Recent policies aimed at stimulating property and consumption recovery are expected to influence market dynamics positively [26] This summary encapsulates the key points discussed in the conference call, highlighting the current state and projections for the China materials industry, particularly in construction, steel, cement, and lithium sectors.