On March 5, Chinese Premier Li Qiang delivered a report on the work of the Chinese government to the second session of the 14th National People's Congress (NPC), stating that China has sets its growth target for gross domestic product (GDP) at five percent for 2024. New energy vehicle production and sales in China will account for more than 60 percent of the global volume, and energy consumption per unit of GDP will decline by 2.5 percent this year.
To achieve these targets, China will issue local government special bonds worth RMB 3.9 trillion ($0.55 trillion) in 2024. Meanwhile, China intends to issue ultra-long-term special treasury bonds for several consecutive years starting this year, focused on the implementation of major national strategies and the construction of security capacity in key areas. In 2024, China will issue the ultra-long-term special treasury bonds in question amounting to a value of RMB 1.0 trillion ($0.14 trillion).
Though the news from NPC was expected to bolster the steel market, following the weak start after the holiday in February, the first reaction from the steel market has been not so positive. Rebar and HRC futures at Shanghai Futures Exchange lost 0.51 percent and 0.41 percent respectively on March 5. The main problem for the industry is continuing poor demand and low margins. With the recent slight rebound of iron ore prices and today’s increase in iron ore futures prices at Dalian Commodity Exchange by 0.69 percent, market sources are not seeing positive movements for producers. “The report of the Congress does not have anything new in terms of policy for economic support. That’s why futures are not so strong. Everyone is waiting for the return of real demand in the spring,” a large Chinese steel trader told SteelOrbis.
