★Macro★ 01 ★★ [State-owned Major Bank's 5-Year Personal Certificate of Deposit 'Reappears' with Annualized Interest Rate of 1.6%] Although over the past two years, mainstream major state-owned banks and joint-stock banks ceased issuing certificates of deposit with terms over 3 years. But just as H2 began, a state-owned major bank reintroduced them. On July 1, Bank of China announced on its official website that it would issue the first tranche of personal certificates of deposit for 2026, offering seven terms: 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, and 5-year. As long-term certificates of deposit issued by nationwide commercial banks have largely disappeared from the market, the issuance by Bank of China this time means that 5-year certificate of deposit products from state-owned major banks 'reappear.' 02 ★★ [Central Bank: Net Injection of 200 Billion Yuan via Medium-Term Lending Facility (MLF) in June] The People's Bank of China (PBOC) announced on its official website today the liquidity injection through various central bank tools for June 2026. Data showed that in June, net injection via MLF was 200 billion yuan, net injection via standing lending facility (SLF) was 0 yuan, and net injection via other structural monetary policy tools was -137.2 billion yuan. Meanwhile, in open market operations, in June, net injection via government bond trading in the open market was 10 billion yuan, net injection via 7-day reverse repo was 582.6 billion yuan, net injection via central treasury cash management was 0 yuan, and net injection via reverse repos of other tenors was 300 billion yuan. ★Industry and Downstream★ 01 ★★ [NDRC's Liu Gang Leads Team to China Iron and Steel Association for Work Survey] To gain an in-depth understanding of the steel industry's development, on June 29, Liu Gang, Deputy Director of the NDRC Price Monitoring Center, led a team to CISA to conduct a work survey, and held discussions with Diao Li, Deputy Secretary General and Director of the Information and Statistics Department of CISA, as well as Li Xiaochuan and Li Baojun, Deputy Directors of the Information and Statistics Department. The two sides, considering the new characteristics of steel industry development at this stage, conducted in-depth exchanges on aspects such as price trends across the industry chain's upstream and downstream, compilation of price indices, and optimization of monitoring indicators. 02 ★★ [2025 Annual Dual-Credit Calculation Results for Chinese Passenger Vehicle Enterprises Released] Four departments, including the Ministry of Industry and Information Technology, the Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation, recently jointly announced the 2025 average fuel consumption and NEV credit status of Chinese passenger vehicle enterprises. In 2025, a total of 108 passenger vehicle enterprises in China produced/imported 24.629 million passenger vehicles (including passenger NEVs, excluding export passenger vehicles), with an actual average fuel consumption under WLTC conditions of 3.38 liters per 100 kilometers, average carbon dioxide emissions of 80.22 grams per kilometer, positive fuel consumption credits of 53.553 million points, negative fuel consumption credits of 9.412 million points, positive NEV credits of 21.94 million points, and negative NEV credits of 1.599 million points. 03 ★★ [Changsha One Commercial-Residential Plot Sold at Reserve Price of 165 Million Yuan] On July 2, Changsha auctioned one commercial-residential plot in Furong District, with a planned GFA of 28,109.20 sq m (commercial-residential ratio of 1:9), a plot ratio of 5, a starting price of 165 million yuan, and a starting floor price of 5,884 yuan per sq m. Finally, the local private enterprise Hunan Dayou Real Estate Development Co., Ltd. won the plot at the reserve price of 165 million yuan. 04 ★★ [Nanjing One Residential Plot Sold at Reserve Price of 570 Million Yuan] On July 2, Nanjing auctioned one residential plot in the Qilin Area of Jiangning District, with a planned GFA of 56,779 sq m, a plot ratio of 2.4, a starting price of 570 million yuan, and a starting floor price of 10,041 yuan per sq m. Finally, Nanjing Science and Technology Innovation Investment Co., Ltd. won the plot at the reserve price of 570 million yuan. 05 ★★ [South Korea Imposes Anti-Dumping Duties on Carbon Steel and Alloy Steel HRC Involving China] According to China Trade Remedies Information, on June 23, South Korea's Ministry of Economy and Finance issued Order No. 35, officially imposing anti-dumping duties on carbon steel and alloy steel HRC originating from China and Japan, with the duty rate for Chinese products ranging from 28.16% to 33.10%; meanwhile, it approved the price undertakings proposed by three Japanese enterprises and six Chinese enterprises, and will not impose anti-dumping duties on enterprises that comply with the price undertakings. The announcement took effect on the date of its issuance. ★ Other Hot Topics ★ ⭕ [China's State Flood Control and Drought Relief Headquarters Launches Level-IV Emergency Response for Flood and Typhoon Prevention in Hainan, Guangxi, and Guangdong] According to meteorological forecasts, the tropical depression over the South China Sea is expected to develop into a typhoon on July 2, make landfall on the eastern coast of Hainan Island on the afternoon or evening of July 3, and then make a second landfall on the coast of Guangxi or northern Vietnam on the afternoon or evening of July 4. As a result, it is expected that from July 3 to 5, parts of Hainan Island, Guangdong, and Guangxi will experience heavy to torrential rain, with localized areas seeing extremely heavy downpours. In accordance with the relevant provisions of the National Flood Control and Drought Relief Emergency Plan, the State Flood Control and Drought Relief Headquarters decided to launch a Level-IV emergency response for flood and typhoon prevention in Hainan, Guangxi, and Guangdong at 12:00 on July 2, and dispatched a working group to Hainan for frontline guidance and assistance. ⭕ [US Treasuries Rise as Weak Employment Report Dampens Rate Hike Expectations] US Treasuries rose after a weaker-than-expected US employment report prompted traders to scale back expectations of interest rate hikes by the US Fed in the coming months. The two-year US Treasury yield, which is most sensitive to monetary policy changes, fell 6 basis points to 4.11%, while the 10-year yield fell 2 basis points to 4.46%. Interest rate swaps showed that traders expected the probability of the US Fed raising interest rates at its meeting later this month to be around 20%, down from 33% before the data release. The market was pricing in fewer than two 25-basis-point rate hikes by March 2027. ⭕ [US June Nonfarm Payrolls Increased by 57,000, Far Below Market Expectations] US nonfarm payrolls increased by 57,000 in June (estimate: 113,000; prior: 172,000). Private payrolls rose by 49,000 (prior: 97,000; estimate: 107,000). Manufacturing payrolls increased by 3,000 (prior: a decrease of 2,000), matching expectations; the forecast range of 15 surveyed economists was a decline of 1,000 to an increase of 10,000. ⭕ [Saudi Arabia's Crude Oil Exports Approach Pre-War Levels] Saudi Arabia's crude oil exports are near pre-war levels; as of Wednesday, the kingdom exported 6.3 million barrels per day over a six-day period. *This report is an original work and/or compilation work exclusively created by SMM Information & Technology Co., Ltd. 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During the "14th Five-Year Plan" period, the steel industry continued to deepen supply-side structural reforms, persistently advanced capacity governance, and achieved a cumulative reduction in production exceeding 100 million mt. Recently, at the 13th Member Congress of the China Iron and Steel Association (CISA), CISA Chairman Zhao Minge made the above statement. He pointed out that during the "15th Five-Year Plan" period, the industry's capacity governance efforts will focus on "controlling increments, optimizing stock, promoting mergers and reorganizations, and facilitating exits," adhering to market-oriented and rule-of-law principles, strictly blocking new capacity additions, smoothing exit channels for outdated capacity......

Cold rolling capacity increased by 60% over the past decade. From 2015 to 2020, cold rolling capacity grew steadily and rapidly, with an average annual growth rate of 9.7%, peaking at around 11% in 2020. Starting in 2021, the Implementation Measures for Capacity Replacement in the Steel Industry promoted an increase in the cold rolling capacity utilization rate, leading to a significant rise in cold rolling production, while the growth rate of cold rolling capacity slowed down, with the average annual growth rate from 2021 to 2024 slowing to 2.9%.

Simultaneously, anti-dumping investigations against billets are also increasing. For example, in June this year, Pakistan initiated a sunset review anti-dumping investigation on Chinese continuous casting billet products, and in September, Egypt initiated a safeguard investigation on imported steel billets. If the volume of domestic billets going overseas increases again, they may face more anti-dumping investigations, putting pressure on the sustainable development of billet exports

On July 31, according to SMM's imported ore cost and profit statement, the profit from imported ore slightly declined. Market news indicated that Zhao Minge, President of the China Iron and Steel Association, stated that China would continue to implement a crude steel production control policy in 2025, with relevant measures expected to manifest in the second half of the year (H2). Meanwhile, there were rumors that during the September 3 military parade, north China would implement environmental protection-driven production restrictions for at least two weeks, potentially suppressing iron ore demand. However, SMM announced today that the daily average hot metal production this week slightly decreased, and there were no new blast furnace maintenance plans for steel mills in the short term. The sustained high hot metal production supported ore prices. Nevertheless, market expectations weakened after the Political Bureau meeting, and it is anticipated that ore prices will lack upward momentum in the short term, maintaining a weak and rangebound fluctuation pattern. It is expected that the profit from imported ore may still have some room to decline.

On the 30th day of the month, the China National Association of Metal Material Trade (CAMT) issued an initiative to resist "rat race" competition and promote the scientific and orderly development of the steel circulation industry. The initiative mentioned resolutely resisting unfair means such as dumping below cost, slandering business reputation, and stealing trade secrets. It advocates for healthy competition based on product quality, service value, and technological innovation.

Today, DCE iron ore futures opened higher and moved downwards, trading in the doldrums throughout the day. The most-traded contract I2509 eventually closed at 789, with a daily decline of 0.44%. Traders sold goods according to market conditions; steel mills adopted a wait-and-see attitude, with some purchasing at lower prices. The market transaction atmosphere was average. The mainstream transaction prices of PB fines in Shandong were around 774 yuan/mt, down 6 yuan/mt from yesterday's prices; the transaction prices of PB fines in Tangshan were around 785-790 yuan/mt, down 5-10 yuan/mt from yesterday's prices. Market news indicated that Zhao Minge, President of the China Iron and Steel Association, stated that China would continue to implement crude steel production control policies in 2025, with relevant measures expected to take effect in the second half of the year. Meanwhile, there were rumors that during the September 3 military parade, north China would implement environmental protection-driven production restrictions for at least two weeks, potentially suppressing iron ore demand. However, SMM announced today that the daily average hot metal production this week slightly decreased, and there were no new blast furnace maintenance plans for steel mills in the short term. The sustained high hot metal production supported ore prices. However, market expectations weakened after the Political Bureau meeting, and it is expected that ore prices will lack upward momentum in the short term, maintaining a weak and rangebound fluctuation pattern.

In H1, the cumulative operating revenue of key steel enterprises under the statistics of CISA reached 2,998.5 billion yuan, down 5.79% YoY; operating costs amounted to 2,805.5 billion yuan, down 6.83% YoY; total profits stood at 59.2 billion yuan, up 63.26% YoY; and the average profit margin was 1.97%, up 0.83 percentage points YoY. "In the first half of the year, the steel industry actively responded to the challenges of strong supply and weak demand, strengthened industry self-discipline, adjusted production pace, and achieved a steady decline in crude steel production, year-on-year improvement in economic benefits, and continuous enhancement in environmental protection levels. The overall operation of the industry was better than expected," said Zhao Minge, President of the China Iron and Steel Association. Self-discipline and production control to stabilize operations were the core reasons for the industry's profit improvement. On one hand, it maintained low steel inventory, a basically balanced supply and demand, and relatively stable steel prices; on the other hand, it led to a decline in demand for raw materials and fuels and a downward shift in the cost center.

China Iron and Steel Association: In June 2025, the total energy consumption of member enterprises decreased by 3.57% YoY; the comprehensive energy consumption per mt of steel increased by 1.82% YoY; the comparable energy consumption per mt of steel increased by 1.96% YoY; and the electricity consumption per mt of steel increased by 4.27% YoY.