Rebar futures and SGX began May in the usual way:
Likewise, Dalian for iron ore and coking coal:
Expect weak pricing for the next six weeks as southern Chinese rains inhibit construction,
For those hoping for more property stimulus, here is Goldman:
Since its re-introduction in late 2023, the PBOC’s Pledged Supplementary Lending (PSL) program has been closely monitored by markets for signs that supportive property policies are being implemented by the central government.
Following the RMB500bn net issuance during December-January to support the “ Three Major Projects ”, PSL loans outstanding contracted by RMB343bn in April, the largest-ever monthly decline in loans outstanding since it was launched in 2014.
We believe housing easing is still underway, and tend not to over-interpret the large PSL contraction in April, as it was likely driven by maturing loans used for the shantytown renovation program several years ago and should not affect the funding for the ongoing housing easing. In addition, lower policy bank bond (PBB) yields may have reduced PSL’s attractiveness as a funding source relative to PBB issuance, and recent policy communications hint at more demand-side housing easing measures ahead.
We see several feasible options that can help digest existing housing inventory, but caution that any game-changing housing easing measures would likely require significantly more funding than available thus far.
