In 2020, we will build infrastructure to strengthen weak spots or turn the steel industry into a bright spot

After 2020, various policies have been implemented.For example, recently, the people's bank of China announced a RRR cut on January 6, local governments started issuing special bonds, and the central economic work conference in 2019 repeatedly emphasized the release and implementation of policies such as building on the foundation and strengthening weak links.Everyone has focused on the real economy, in which infrastructure investment will become the highlight of the development of the steel industry in 2020.

The people's bank of China announced a 0.5 percentage point cut in the reserve requirement ratio for financial institutions (excluding finance companies, leasing companies and auto financing companies) on January 6.This across-the-board RRR cut will release more than 800 billion yuan of medium - and long-term liquidity, which will encourage financial institutions to provide more services to the real economy.However, it is worth noting that the RRR cut does not mean a shift in monetary policy. The ultimate goal is to push down the lending rate and lower the financing cost of the real economy.

Sichuan and henan provinces issued special bonds through public bidding on Jan. 2, nearly 20 days earlier than the same period last year, making them the first provinces to issue special bonds in 2020.In addition, yunnan, zhejiang, shanxi, shenzhen, guangdong and other provinces and cities have also announced plans to issue additional special bonds in January 2020, with the issuance scale reaching 438.6 billion yuan.

It is reported that sichuan province has successfully issued 35.671 billion yuan of new special bonds, with terms of 10, 15, 20 and 30 years, mainly for the construction of toll roads, urban and rural infrastructure, cultural tourism, ecological protection, schools, health, industrial parks, water supplies and rural revitalization.Henan province has successfully issued an additional 51.9 billion yuan of special bonds with maturities of 5, 7, 10, 15 and 30 years, mainly for the construction of transportation infrastructure, agriculture, forestry, water conservancy, social undertakings, ecological protection, municipal and industrial park infrastructure and other projects.

Industry insiders said, from the current point of view, trillion special debt issuance has been opened ahead of schedule, and infrastructure accounted for a large increase;As the pace of issuance picks up, the amount spent on infrastructure in the first two months of 2020 is likely to double that of the same period in 2019.

In addition, the political bureau meeting of the CPC central committee in 2019 explicitly mentioned "strengthening infrastructure construction", and the economic work conference of the CPC central committee also re-emphasized that the construction of major railway projects such as the sichuan-tibet railway should be promoted, and infrastructure investment projects in 2020 will once again receive favorable news.Statistics from Lange iron and steel research center show that from January to November 2019, 35 railway investment projects have been approved, 6,459 kilometers of railways have been planned, with a total investment of 1,158.7 billion yuan.

By 2020, China will fully review the tasks and targets set in the 13th five-year plan, and speed up the improvement of transportation infrastructure. The focus will be on high-quality development of railways and the construction of "last kilometer" projects such as supporting projects for hubs and dedicated railway lines.In particular, by the end of 2019, the continuous development of special debt, the new issuance of special debt, the advance issuance of quota in 2020, the reduction of capital ratio and other policies will significantly boost the funding source of railway projects, and the railway project construction in 2020 will usher in another construction climax with the support of policy funds.

Therefore, infrastructure investment in 2020 will become a catalyst to drive economic growth, which will bring a lot of steel demand, good steel market.