From December 15th to 16th, the Central Economic Work Conference was held in Beijing from December 15th to 16th. The meeting proposed to effectively prevent and resolve major economic and financial risks and ensure the stable development of the real estate market. Prior to this, meetings were held in many places to study and plan economic work in 2023. Judging from the signals released by relevant meetings, it is still the focus to continue to expand effective investment next year and continue to do a good job in the construction of major projects. From December 1st to 3rd, the Henan Provincial Party Committee held a special meeting to study and plan the economic work in 2023, which mentioned “continue to deepen the project construction activities of ‘ten thousand people helping ten thousand enterprises’ and ‘three batches'”; December 2 , The Shanghai Municipal Government held a symposium on work ideas in the economic field in 2023, which mentioned “solidly planning and arranging for next year’s economic work” and “doing a good job in the construction of major projects and promoting the development of key areas.” It is foreseeable that the steady economic growth next year will drive the accelerated release of “steel demand”.
A number of major projects across the country started. According to the “China Monetary Policy Implementation Report for the Third Quarter of 2022” released by the People’s Bank of China, as of the end of October, a total of 740 billion yuan has been invested in two batches of financial instruments, effectively supplementing a batch of transportation, energy, water conservancy, municipal and industrial upgrading. Capital funds for major projects in infrastructure and other fields have driven the start of major projects in many places across the country. According to incomplete statistics, as of early December, 1,362 projects supported by policy-oriented and development-oriented financial instruments in 14 provinces across the country have started intensively. These projects are expected to set off a new upsurge in construction, which in turn will stimulate the recovery of “steel demand”.
In terms of monetary policy, it is expected that in the new year it will still be possible to “cut RRR” and “interest rate” comprehensively or in a targeted manner, new credit will maintain a relatively high year-on-year growth level, and market liquidity will be in a reasonably sufficient state. It is expected that the main direction of new loan supply will be equipment renovation, rigid housing demand, infrastructure construction, etc., which will help increase steel demand.
In terms of real estate, more loosening measures are expected to be introduced. Since the beginning of this year, especially after entering the second half of the year, various measures have been taken across the country to vigorously promote the stable and healthy development of the real estate market. In mid-November this year, the People’s Bank of China and the China Banking and Insurance Regulatory Commission made another move and proposed 16 financial support measures, including support for rigid and improved housing needs, “guaranteed delivery of buildings”, etc., from multiple perspectives of building, buying, and handing over buildings. On the one hand, promote the stable and healthy development of the real estate market. These measures will have a positive and important impact on the current real estate market and future investment in real estate development. Investment in real estate development has always been an important area of steel consumption, especially steel demand for construction. The gradual improvement in the growth rate of investment in real estate development in the new year is bound to bring good news to the steel market.
The optimization and adjustment of epidemic prevention policies have accelerated economic recovery. Entering December, the epidemic prevention policies in many places across the country have been greatly optimized and adjusted, which has greatly enhanced the expectation of stabilizing the economy and injected strong impetus into stimulating “steel demand”.