Macro data:
Statistics from the People's Bank of China show that at the end of April 2024, the balance of broad money (M2) was 301.19 trillion yuan, a year-on-year increase of 7.2%. The balance of narrow money (M1) was 66.01 trillion yuan, down 1.4% year-on-year. In the first four months, RMB loans increased by 10.19 trillion yuan, and the cumulative increase in the scale of social financing in the first four months was 12.73 trillion yuan, 3.04 trillion yuan less than the same period last year.
Lange Comments:
In April 2024, as industrial production continued to recover, demand in some industries fell in stages, with the producer price index falling by 2.5% year-on-year, 0.3 percentage points narrower than the previous month, 0.2% month-on-month, 0.1 percentage points faster than the previous month, and the purchasing price index of industrial producers falling 3.0% year-on-year, 0.5 percentage points narrower than the previous month, and 0.3% month-on-month, 0.2 percentage points larger than the previous month (see Figure 1 for details). For domestic manufacturing enterprises, although the domestic economy continues to maintain a recovery trend, insufficient demand is still the main contradiction, which still restricts the release of demand for manufacturing steel.
Judging from the financial data in April, credit and social finance both showed a rapid downward trend, of which the amount of new RMB loans in a single month increased slightly year-on-year and fell sharply month-on-month; The increase in the scale of social financing in a single month increased significantly year-on-year and decreased sharply month-on-month (see Figure 2 for details). The year-on-year growth rate of narrow money (M1) turned from positive to negative, while the year-on-year growth rate of broad money (M2) continued to decline (see Figure 3 for details).
From the perspective of loans, from January to April, corporate loans were 8.63 trillion yuan, of which short-term loans increased by 2.56 trillion yuan, medium and long-term loans increased by 6.61 trillion yuan, and bill financing decreased by 661.9 billion yuan. From January to April, resident loans were 813.4 billion yuan, of which short-term loans increased by 5 billion yuan and medium and long-term loans increased by 808.4 billion yuan. Short-term and medium- and long-term credit appetite has weakened, suggesting that households are once again trapped in an environment of low confidence.
From the perspective of social finance, From January to April, the increase in the scale of social financing was 12.73 trillion yuan, 3.04 trillion yuan less than the same period of the previous year, of which the RMB loans issued to the real economy increased by 9.44 trillion yuan, a year-on-year decrease of 1.7 trillion yuan, the net financing of corporate bonds was 1.17 trillion yuan, an increase of 9 billion yuan year-on-year, and the net financing of government bonds was 1.26 trillion yuan, a year-on-year decrease of 102 million yuan.
Judging from the report on the implementation of China's monetary policy in the first quarter, the current economic development of the mainland is facing both strategic opportunities and risks and challenges. The momentum of global economic recovery is divergent, uncertainties such as monetary policy adjustment and geopolitical conflicts in advanced economies still exist, and the domestic economy still faces many challenges in its sustained recovery. It should also be noted that the mainland's economic foundation is stable, its advantages are many, its resilience is strong, and its potential is great, and that a good start and a good rebound are the basic characteristics and trends of the current economic operation, and it is necessary to enhance confidence in doing a good job in economic work. During the year, the PBOC will maintain the soundness of monetary policy, enhance the consistency of macroeconomic policy orientation, reasonably grasp the relationship between the two largest financing markets of bonds and credit, guide the reasonable growth and balanced supply of credit, maintain reasonable and abundant liquidity, keep the scale of social financing and money supply in line with the expected targets of economic growth and price levels, strengthen counter-cyclical and cross-cyclical adjustments, increase support for the real economy, and effectively consolidate and enhance the positive trend of economic recovery.
On May 13, the Ministry of Finance issued the "2024 General Treasury Bonds and Ultra-long-term Special Treasury Bonds Issuance Related Arrangements", in which the ultra-long-term special treasury bonds involve maturities of 20 years, 30 years and 50 years, and decided to issue 30-year ultra-long-term special treasury bonds on May 17, 20-year ultra-long-term special treasury bonds on May 24, and 50-year ultra-long-term special treasury bonds on June 14. From the perspective of the pace of policy, this reflects the "unanimity, harmony and unity" of the central bank and the Ministry of Finance in enhancing the consistency of macroeconomic policy orientation, and will also form a "joint force" in policy to promote the economic rebound.
At present, the domestic steel market will be limited in the "cost bottom, supply pressure, demand weakened" environment, due to the impact of seasonal weather, the traditional peak season is gradually converting to the off-season, the market transaction is obviously in an unstable state, the regional transaction is not the same, the steel market supply and demand is in obvious dynamic adjustment, the market space is also limited. (Lange Iron and Steel Research Center, Ge Xin, please indicate the source for reprinting)