★Macro★
01★★ 【One-Year and Five-Year LPR Remain Unchanged】
On February 20, the PBOC kept the one-year and five-year Loan Prime Rates (LPR) unchanged at 3.1% and 3.6%, respectively.
02★★ 【PBOC Net Withdraws 800 Million Yuan in Open Market Operations Yesterday】
According to the PBOC announcement, to maintain sufficient liquidity in the banking system, the PBOC conducted 125 billion yuan of reverse repo operations on February 20, 2025, with a 7-day term and an operation rate of 1.50%. With 125.8 billion yuan of 7-day reverse repos maturing yesterday, the net withdrawal amounted to 800 million yuan.
★Industry and Downstream★
01 ★★ 【Real Estate Market Warms Up in Second-Tier Cities】
Data from the National Bureau of Statistics (NBS) shows that the trend of rising new home prices on a MoM basis has expanded from first-tier to second-tier cities. Meanwhile, real estate transactions across regions have recovered from the impact of the Chinese New Year holiday, returning to pre-holiday levels. Whether the "mini spring" in the real estate market during March and April will materialize remains a hot topic. On February 19, the NBS released data on the changes in sales prices of commercial residential properties in 70 large and medium-sized cities for January 2025. The data showed that in January, the sales prices of newly built commercial residential properties in second-tier cities rose by 0.1% MoM, marking the first increase since June 2023.
02★★★ 【LPR Remains Stable for Four Consecutive Months】
The February Loan Prime Rate (LPR) was officially released, with the one-year and over-five-year rates reported at 3.10% and 3.60%, respectively, remaining unchanged for the fourth consecutive month. Industry experts noted that given the recent stabilization of policy rates, the pricing basis for the LPR has not changed. Additionally, with a tight balance in liquidity, the rising cost of bank liabilities limits the downward adjustment of LPR spreads. The PBOC's accommodative monetary stance remains clear, and there may still be room for LPR adjustments following reductions in reverse repo rates. It is recommended to monitor subsequent statements on the intensity and pace of counter-cyclical adjustment tools.
03 ★★ 【Hangzhou Land Auction Generates 3.1 Billion Yuan】
On February 20, Hangzhou held its second land auction after the Chinese New Year. Three residential plots were auctioned, with a total construction area of 159,000 m² and a starting total price of 2.33 billion yuan. Ultimately, all three plots were successfully sold, with a total transaction amount of approximately 3.14 billion yuan and an average premium rate of 34.8%. Among them, Dajia Real Estate acquired the Chengdong New Town plot in Shangcheng District for 1.083 billion yuan, with a premium rate of 54.04%; Binjiang Group won the Xixing plot in Binjiang District for 1.381 billion yuan, with a premium rate of 43.69%; and Qiaozhi Real Estate obtained the Tingcheng plot in Linping District for 676 million yuan, with a premium rate of 1.5%.
04★★ 【Shanghai Holds First Land Auction of the Year of the Snake】
On February 20, Shanghai held its first land auction of the Year of the Snake, offering four plots with a total construction area of 227,000 m² and a starting total price of 11.924 billion yuan. All four plots were sold at a premium, generating 15.926 billion yuan in total revenue, with an average floor price of 70,159 yuan/m². Among them, the Jinmao-Qinglong consortium acquired the Hongkou Ruihong New Town plot for 8.964 billion yuan, the China Resources-Yuexiu consortium won the Pudong Xinyangsi plot for 5.09 billion yuan, and Jindi and Longfor respectively secured the Songjiang New Town West plot and the Fengxian Nanqiao New Town plot.
05★★ 【January Housing Price Changes in First-Tier Cities】
In January, the prices of newly built commercial residential properties in Beijing were -0.4% MoM (previous value -0.1%) and -5.7% YoY (previous value -5.4%); in Shanghai, +0.6% MoM (previous value +0.5%) and +5.6% YoY (previous value +5.3%); in Guangzhou, flat MoM (previous value -0.1%) and -8.4% YoY (previous value -9.1%); and in Shenzhen, +0.2% MoM (previous value +0.2%) and -5.2% YoY (previous value -6.1%). For second-hand residential properties, Beijing recorded +0.1% MoM (previous value +0.5%) and -3.8% YoY (previous value -4.5%); Shanghai, +0.4% MoM (previous value +0.9%) and -2.3% YoY (previous value -3.4%); Guangzhou, -0.2% MoM (previous value -0.3%) and -10% YoY (previous value -10.9%); and Shenzhen, +0.4% MoM (previous value +0.1%) and -6.1% YoY (previous value -8.0%).
06★★ 【Beijing Takes the Lead in Restarting Land Reserve Special Bond Issuance】
After more than five years, land reserve special bonds have officially resumed. On February 18, Beijing took the lead in issuing this round of land reserve special bonds, with over 10 billion yuan raised for land reserve projects. Since Q4 last year, policies issued by the Ministry of Finance and the Ministry of Natural Resources have provided strong support for the issuance of land reserve special bonds, drawing significant market attention. Industry experts pointed out that this round of issuance focuses on adjusting the supply-demand relationship in land, alleviating financial pressures on local governments, land-acquiring urban investment companies, and real estate enterprises, and promoting the stable and healthy development of the real estate market. Considering the need for debt resolution, urban investment companies acquiring land may become the primary beneficiaries of liquidity. Meanwhile, to effectively avoid new debt risks and reasonably plan funding needs, the supply scale of special bonds for local governments to repurchase or acquire existing land in the short term may be relatively limited.
★Other Hot Topics★
⭕【Donghua Steel's 1,580mm Hot-Rolled Wide Strip Steel Project Successfully Commissioned!】
On February 20, Donghua Steel held a grand commissioning ceremony for its 1,580mm hot-rolled wide strip steel project. As a key project in Donghua Steel's transformation and upgrading, the project commenced in March 2024 and underwent 12 months of construction. During this period, project management departments planned scientifically, implemented precise measures, and collaborated closely with participating units, ensuring steady progress in project construction.
⭕【Lian Steel's Cold-Rolled Silicon Steel Phase II Step 1 #FCL Unit Drying and Annealing Furnaces Officially Fired】
At 19:38 on February 18, the drying and annealing furnaces of the #FCL unit in Lian Steel's Cold-Rolled Silicon Steel Phase II Step 1 project were officially fired. This project, aimed at producing oriented silicon steel, was selected as one of "Hunan's Top 10 Technological Breakthrough Projects for 2025" and is significant in addressing the shortfall in Hunan's high-grade oriented silicon steel industry chain. The project includes DCL, FCL, and ring furnaces, with heat treatment furnaces and some core equipment supplied by MCC South Thermal Engineering.
⭕【Zhoukou Steel's Wide and Thick Plate Project Expected to Complete Equipment Commissioning by Late May】
Zhoukou Steel's wide and thick plate project is a key construction project in Henan Province. Its production line features a 5.6-meter roughing mill and a 5.5-meter finishing mill in a dual-stand configuration, making it the widest unit globally. The project adopts mature, reliable, and advanced production processes and equipment, including a four-high reversible finishing mill and advanced intelligent production technology, to build a modern wide and thick plate production plant with top-tier product quality. After the holiday, the project team promptly held a special meeting on resumption of work and production, organized personnel entry, conducted post-holiday safety inspections, and addressed safety hazards in critical engineering areas. They also provided safety training for incoming personnel and prepared sufficient materials and equipment to ensure uninterrupted production. As of February 10, the attendance rate for key positions reached 100%. The main part of the project has been largely completed, and all equipment commissioning is expected to be finished by late May, entering full production.
