Weekly observations highlight key trends: (1) This week, high-frequency data on rebar and cement indicates that traditional infrastructure project volumes remain weak. In the final week of July, new special bond issuance did not accelerate. While net government bond financing rose month-over-month, it declined year-over-year. Market attention is now focused on the upcoming July Politburo meeting for any potential fiscal stimulus.
(2) Oil prices surged again this week, with Brent crude spot prices briefly exceeding $100 per barrel mid-week. Prices retreated slightly on Friday, driven by the potential resumption of peace talks between the US and Iran. However, looking ahead, the risk of further escalation in the US-Iran conflict remains, suggesting oil prices still have upside potential. Regarding pork prices, they remained in a narrow range this week. Our previous assessment holds: until the fundamental supply-demand imbalance is resolved, pork prices are likely to maintain a volatile but firm trend.
Major Cities Form a Support Base.
From July 17 to July 23, new home sales area across the Wind 20 cities increased 8.21% month-over-month and 2.42% year-over-year. Specifically, all city tiers showed stronger new home sales compared to the previous week. On a year-over-year basis, first-tier cities outperformed last year's levels, while all other city tiers lagged behind the same period last year.
In the four key cities of Beijing, Shanghai, Shenzhen, and Hangzhou, the area of second-hand home transactions was down 0.92% month-over-month but up 7.35% year-over-year. On a month-over-month basis, Shenzhen saw a decline, while Shanghai and Hangzhou were roughly flat. Beijing's second-hand home transaction area was stronger than the prior week. On a year-over-year basis, all key cities except Hangzhou (-11.00%) recorded stronger second-hand home transaction areas than the same period last year.
Investment: Commodity Prices Mostly Decline.
In the investment sector, most commodity prices fell this week. Rebar prices and apparent consumption declined, while inventories rose. Glass futures and cement prices decreased. Asphalt prices increased.
Production: Operating Rates Show Mixed Performance.
Production activity showed a mixed picture this week. The operating rate for PTA rebounded. Rates for petroleum asphalt and automobile tires increased. The rate for polyester filament yarn was roughly flat week-over-week. Conversely, operating rates for coking enterprises and steel mill blast furnaces declined.
Consumption: Domestic Flight Activity Increases.
In the consumer sector, domestic flight activity remained above seasonal norms. Metro travel in eight major cities was in line with seasonal trends. Box office revenue and the average daily wholesale sales of passenger cars for the week were below seasonal levels.
Exports: SCFI and BDI Indices Decline.
On the export front, the Shanghai Containerized Freight Index (SCFI) and the Baltic Dry Index (BDI) both saw a slight decline this week. Cargo throughput at major ports rebounded in the previous week.
Prices: Pork and Oil Prices Rise.
In the inflation sector, the spot price of Brent crude oil, along with pork and vegetable prices, all moved higher.
Risk Warnings:
1. Data statistics may contain omissions due to limitations in data collection, differences in statistical methods, incomplete information disclosure, or update delays, which could lead to deviations in some analytical results.
2. Economic performance may exceed expectations. The economic trajectory is not linear, and the historical data tracked in this report does not constitute a judgment on future economic performance.
3. Market trends are subject to uncertainty and depend on multiple factors, including economic performance and investor behavior.
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