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Macro
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01
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【The US Government Has Suspended Military Aid to Ukraine】
According to Reuters, citing sources, US military aid to Ukraine was suspended at around 1:30 a.m. Ukrainian time today (March 4), which is approximately 9:30 a.m. Beijing time.
02
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【NPC Press Conference: Work on Issuing 2 Trillion Yuan of Replacement Bonds in 2025 Has Begun】
The press conference of the third session of the 14th National People's Congress (NPC) was held today (March 4) at the Great Hall of the People. Spokesperson Lou Qinjian answered questions from domestic and foreign journalists regarding the agenda of the session and related NPC work. Lou Qinjian stated that in November 2024, the 12th meeting of the Standing Committee of the 14th NPC decided to approve an increase of 6 trillion yuan in the local government debt limit to replace outstanding hidden debt. By the end of last year, the 2 trillion yuan replacement bond quota for 2024 had been fully issued, and most regions had completed the replacement. The work on issuing 2 trillion yuan of replacement bonds for 2025 has already begun, effectively preventing and mitigating local government debt risks, ensuring stable local fiscal operations, and supporting high-quality development.
Lou Qinjian noted that the next step for the NPC Standing Committee will be to strengthen supervision of government debt management in accordance with relevant laws, particularly by tracking and supervising the implementation of increasing local government debt limits to replace outstanding hidden debt. This will promote further strengthening of government debt management, actively and prudently prevent and mitigate local government debt risks, accelerate the establishment of a government debt management mechanism aligned with high-quality development, and contribute to the sustained and healthy development of the economy and society.
03
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【State Council Tariff Commission: Additional Tariffs of 10% or 15% on Certain US-Origin Imports Starting March 10】
According to a report by CLS on March 4, the State Council Tariff Commission announced on March 4 that on March 3, 2025, the US government declared an additional 10% tariff on all Chinese exports to the US, citing fentanyl as the reason. The unilateral tariff hike by the US undermines the multilateral trade system, increases the burden on US businesses and consumers, and damages the foundation of China-US economic and trade cooperation. With the approval of the State Council, additional tariffs will be imposed on certain US-origin imports starting March 10, 2025. Details are as follows:
1. A 15% tariff will be imposed on chicken, wheat, corn, and cotton.
2. A 10% tariff will be imposed on sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy products.
3. For US-origin imports listed in the annex, additional tariffs will be imposed on top of the current applicable tariff rates. Current bonded and tax exemption policies remain unchanged, and the additional tariffs will not be exempted.
4. Goods shipped from the place of origin before March 10, 2025, and imported between March 10 and April 12, 2025, will not be subject to the additional tariffs specified in this announcement.
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Industry and Downstream
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01
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【SMM HRC Shipments】Price Spread Factors Lead to a Shift in North-South Shipments
SMM Steel reported on March 4 that, according to SMM statistics, the estimated total shipment volume of mainstream market resources this week is 284,900 mt, down 72,700 mt WoW.
02
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【CPCA: Estimated February National Passenger NEV Wholesale Sales at 840,000 Units, Up 82% YoY】
According to a report by CLS on March 4, the China Passenger Car Association (CPCA) estimated based on preliminary monthly data that February national passenger NEV wholesale sales reached 840,000 units, up 82% YoY and down 5% MoM. Cumulative wholesale sales for January-February this year totaled 1.73 million units, up 49% YoY.
03
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【SMM HRC Inventory】Mixed Changes in North-South Inventory
This week, Shenyang's HRC inventory was 113,000 mt, up 2,500 mt WoW (+2.26%) and down 47,600 mt YoY (-29.64%).
This week, Zhangjiagang's HRC inventory was 447,000 mt, down 7,000 mt WoW (-1.54%). The YoY decline based on the Gregorian calendar was 13.87%, while the YoY increase based on the lunar calendar was 4.20%.
04
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【NPC Representative and Former Chairman of China Baowu Zhongnan Steel, Shiping Li: Steel Industry Mergers, Acquisitions, and Asset Integration Expected to Accelerate in 2025】
NPC representative and former chairman of China Baowu Zhongnan Steel, Shiping Li, stated that this year, the focus will be on how traditional manufacturing industries can cultivate new quality productive forces and achieve the replacement of old growth drivers with new ones, particularly how the steel industry can achieve transformation and upgrading in the new wave of technological development. Regarding whether steel industry mergers, acquisitions, and asset integration will accelerate in 2025, Shiping Li believes it is "possible."
05
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【February Guangzhou First-Hand Residential Sales Reached 3,420 Units, Up 59% YoY】
Following a significant YoY increase in first-hand residential online signed area in January, Guangzhou's real estate market maintained a recovery trend in February. According to CRIC statistics, February saw 362,700 m² and 3,420 units of first-hand residential sales in Guangzhou, up 46% and 59% YoY, respectively. After the Chinese New Year holiday, market activity gradually increased. "Our project performed well, with 500 visits per week and weekly sales of about 100 million yuan, roughly at the levels of May and October last year," said a regional marketing manager of a Guangzhou real estate company on March 3. Another real estate company's Guangzhou-Foshan regional manager also revealed that sales in the past two months have increased YoY, "indicating a recovery and stabilization."
06
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【Ministry of Commerce: Over 1 Million E-Bikes Traded in Nationwide Trade-In Program in the First Two Months of This Year】
According to the Ministry of Commerce, over 1 million e-bikes were traded in the nationwide trade-in program in the first two months of this year. From January to February, 1.019 million old bikes were traded in for new ones, driving new bike sales of 2.66 billion yuan. Since the program's implementation last year, a cumulative total of 2.4 million old bikes have been traded in for new ones, driving new bike sales of approximately 6.4 billion yuan. In January 2025, the Ministry of Commerce and four other departments jointly issued the "Notice on the 2025 E-Bike Trade-In Program," specifying the continuation of the program from January 1. From the sales perspective, over 40,000 retail outlets, mostly individual businesses and small enterprises, are participating in the program, with market enthusiasm further increasing. In February, the trade-in volume reached 863,000 units, surpassing last year's monthly sales peak of 732,000 units, with significant acceleration in progress across regions.
07
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【SMM Electric Furnace Operating Rate】Three Additional Steel Mills Resume Production, Operating Rate Up 3.08% WoW
According to an SMM survey, as of March 4, the operating rate of 50 major electric furnace steel mills producing construction materials nationwide was 41.3%, up 3.08% WoW. The capacity utilization rate was 41.46%, up 2.14% WoW, and the daily average production of construction materials was 92,300 mt, up 4,800 mt WoW.
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Other Hot Topics
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⭕【Ministry of Foreign Affairs: Firmly Opposes US Pressure, Threats, and Blackmail Against China Using the Fentanyl Issue as a Pretext】The spokesperson of the Ministry of Foreign Affairs responded to questions regarding the release of the white paper "China's Control of Fentanyl-Related Substances." The US has spread various lies about the fentanyl issue, smeared China, and shifted blame, insisting on imposing additional tariffs on Chinese exports to the US under the pretext of fentanyl. This is unreasonable, harmful to others, and self-damaging. China's position is clear: we are willing to engage in practical cooperation with the US on the basis of equality and mutual respect, but we firmly oppose US pressure, threats, and blackmail using the fentanyl issue as a pretext. We urge the US to respect the facts and make the right choice in its own interest.
⭕【US May Ease Sanctions on Russia】According to foreign media reports on March 3, citing a US official and a person familiar with the matter, the US is drafting plans that may ease sanctions on Russia. The report stated that the White House has asked the US State Department and Treasury Department to draft a target list for potential sanction relief. Departments responsible for sanctions are currently drafting recommendations to lift sanctions on certain Russian entities and individuals. Over the past few years, the US has imposed extensive sanctions on Russia in sectors such as energy and finance.
⭕ 【Hainan: Encourages the Use of Existing Buildings for the Elderly Care Industry】The General Office of the People's Government of Hainan Province issued the "Three-Year Action Plan for Promoting the Elderly Care Industry in Hainan Province (2025-2027)." It encourages the use of existing buildings for the elderly care industry. The plan allows the repurposing of idle commercial properties, factories, school buildings, office spaces, training facilities, and other facilities for elderly care services, with transitional policies permitting their use for original purposes and rights types for five years. After the five-year period or in cases involving transfers, relevant land use procedures must be completed, and agreements can be made for land supply. Enterprises are encouraged to repurpose existing residential properties to provide elderly care services, meeting fire safety and operational requirements. The use of existing hotels and inns for elderly care services is also permitted. With the approval of municipal or county governments, enterprises may apply to change the land use proportion to other uses except for residential land, in compliance with relevant standards and regulations, and adjust the land transfer price accordingly.
