China Materials_ Demand Tracker – December 20

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the Greater China Materials sector, focusing on various aspects of the steel, cement, and construction industries in China [1][1]. Core Insights and Arguments 1. Strong Demand in Auto Sales: The automotive sector showed robust performance with November AC sales increasing by 44.2% YoY to 15.38 million units, with domestic sales up 28.7% YoY and exports up 59.1% YoY [1][1]. 2. Production Cuts in Steel and Paper: Nine Dragons Paper plans to reduce packaging paper production by 175,000 tons at its Dongguan base and 145,000 tons at Taicang and Chongqing bases. Additionally, Shandong coke producers are expected to cut production by 10.5 thousand tons/day [1][1]. 3. Steel Output Decline: Daily crude steel output from major producers was reported at 2.024 million tons, down 3.2% compared to late November [1][1]. 4. Government Policies: India is planning a 25% temporary safeguard tax on Chinese steel imports, while Canada intends to impose tariffs on Chinese solar products and other materials in 2025-26 [1][1]. 5. Infrastructure Stimulus: The Ministry of Housing and Urban-Rural Development (MoHURD) reported that policy-supported housing delivery reached 3.24 million units nationwide in the first eleven months of 2024. However, land sales revenue dropped 22.4% YoY to RMB 3.2 trillion [1][1]. 6. Cement Shipments: Cement shipments in eastern China remained high due to year-end construction activities, with apparent consumption of long and flat products showing a decline of 3.1% and 0.9% YoY, respectively [1][1]. Additional Important Information 1. Local Government Bonds: Local government special bond issuance totaled RMB 21 billion in December, bringing the year-to-date total to RMB 4.0 trillion, which is 102.6% of the 2024 quota [1][1]. 2. Construction Contracts: Major construction state-owned enterprises signed new domestic contracts worth RMB 600 billion in November, reflecting a 4% YoY increase. The total for the first eleven months reached RMB 5.76 trillion, up 2% YoY [1][1]. 3. Market Dynamics: Weekly primary unit sales in 50 cities increased by 28% YoY, while secondary unit sales in 10 cities were up 70% YoY but down 14.9% WoW [1][1]. 4. Investment in Grid Infrastructure: China completed RMB 529 billion in grid investment in the first eleven months of 2024, marking an 18.7% YoY increase [1][1]. This summary encapsulates the key points discussed in the conference call, highlighting the current state and future outlook of the Greater China Materials sector, along with relevant statistics and government policies impacting the industry.