New RMB lending in China in the month of July this year totaled RMB 1.06 trillion, down RMB 0.6 trillion from June this year, but also down RMB 0.3975 trillion year on year, as announced by the People’s Bank of China (PBOC) on August 12. This decline was sharper than most analysis predicted and it signaled about slowing down of Beijing support to the local marl
M2 money supply in China in July came to RMB 191.94 trillion, up 8.1 percent year on year, 0.4 percentage points lower than that as of the end of June this year and as of the end of July last year.
Meanwhile, as the end of July, total social financing in China, a broad measure specific to China of credit, was at RMB 214.13 trillion, up 10.7 percent year on year, while the pace of growth was 10.9 percent in June.
The current slowdown in lending signals about further possible slowing of major steel consuming industries, construction at first. As a result, traditionally good period for steel demand in China – in September-October – may be not so supportive for steel producers this year. Most analysts believe that PBOC will ease the monetary policy in H2 and will cut banks’ reserve requirement ratios (RRR) again to support local market.