Authors: Zhong Zhengsheng and Chang Yixin (Zhong Zhengsheng is a director of the China Chief Economist Forum and the chief economist of Ping An).
Key takeaways. Since December, most of the industrial production has weakened seasonally, the construction intensity of infrastructure and real estate has tended to fall, the increase in winter rain and snow weather, and the environmental protection and production restrictions in heavily polluted weather have been disturbed. On the demand side, new home sales have gradually stabilized, but offline economic activity has declined, and external demand remains under pressure month-on-month.
1. Industrial production mostly weakens seasonally. Judging from high-frequency data, since December, the production of important industrial products such as steel, cement, asphalt, automobile tires, and all-steel tires has fallen month-on-month, flat or slightly weaker than the seasonal pattern, and only slightly stronger than the same period last year;However, the operating rates of PTA, polyester chips, and independent coking plants improved slightly, thanks to the marginal recovery of the profit side. Speculate from the production, demand and inventory of industrial products such as steel, cement, and petroleum asphaltIn December, the intensity of construction of infrastructure, real estate and other buildings tended to declineIn winter, the increase in rain and snow weather, and the environmental protection and production restriction in heavily polluted weather have been disturbed.
2. New home sales stabilized. In the first three weeks of December, the average daily transaction area of new homes in the 61 sample cities we counted rebounded from the previous month in November, down -22% year-on-year, and was basically the same as the same period in November. Looking at the sales of new homes by city energy level, the first line since December (64%)> second line (-13.).8%)> four or five lines (-22.).5%)> third line (-68%). On the margin, since December, the year-on-year growth rate of first- and second-tier cities has increased compared with November, while the year-on-year growth rate of new home sales in third-, fourth- and fifth-tier cities has declined. The year-on-year decline in the sales area of second-hand houses narrowed. The average daily area of second-hand housing in the 15 sample cities in December was slightly higher than that in November, 26% higher than the same period last year (16% in November), and about -39% lower than the average for the same period from 2019 to 2021 (-32% in November). On a comparable basis, the transaction area of second-hand houses accounted for 40%, and the margin declined.
3. Offline activity is declining. 1) Freight traffic has fallen. Since December, the average volume of vehicle freight flow, the throughput of public logistics parks, and the throughput index of distribution centers of major express delivery companies has fallen by 4-5 percentage points compared with November, and the year-on-year performance has also weakened. 2) Passenger traffic weakened slightly. Since December, the average daily passenger volume of the 24-city subway has decreased by 2 compared with November8%, the number of domestic flights decreased by 2 compared with the average in November2%, while the number of flights operated by international and Hong Kong, Macao and Taiwan increased by 88%。3) Weak recovery of household consumption. According to the data of the Passenger Car Association, the retail sales of passenger cars in the first 17 days of December increased by 7% year-on-year, and the retail sales of narrow passenger cars are expected to increase by 9% month-on-month3%, a year-on-year increase of 48%, narrowing from the 25% increase in November. Since December, the average daily box office of films across the country has rebounded to 91.6 million yuan month-on-month, but it is lower than the same period in 2019 and 2020.
4. External demand was under pressure month-on-month. Since December, merchant ships in the Red Sea have been attacked many times, pushing the freight rates of relevant routes and the postponement of delivery dates, bringing additional pressure to foreign trade. 1) In terms of freight rates,In the first three weeks of December, China's export container freight rate accumulated **26%, the cumulative freight rate of European routes is **77%。2) Port cargo and container throughput declined. According to the data of the Ministry of Transport, from December 4 to 17, the cumulative container and cargo throughput of the monitored ports decreased month-on-monthThe year-on-year growth rate was 12% and 18%, down 1. from the November average2 and 21 percentage point.
Risk warning: the policy of stabilizing growth is less than expected, the degree of overseas economic recession is greater than expected, and the escalation of geopolitical conflicts.
Figure 1 List of domestic high-frequency data this week
Source**: Wind, iFind, Ping An ** Institute;Note: The chart data is the month-on-month change rate compared to the previous week.
1. Industry: Production is mostly weaker
Judging from high-frequency data, since December, the production of important industrial products such as steel, cement, asphalt, automobile tires, and all-steel tires has fallen month-on-month, flat or slightly weaker than the seasonal pattern, and only slightly stronger than the same period last year;However, the operating rates of PTA, polyester chips, and independent coking plants improved slightly, thanks to the marginal recovery of the profit side. From the production, demand and inventory of industrial products such as steel, cement, petroleum asphalt, etc., it is speculated that the intensity of construction tends to fall in December, and the increase in winter rain and snow weather, and the environmental protection and production restriction in heavy pollution weather are disturbed.
First, the steel boom has fallen. In terms of production,In the past three weeks (December 2 to December 22), the average daily molten iron output and blast furnace operating rate of major steel mills have decreased, while the operating rate of electric furnaces has recovered slightly. The performance of steel products was slightly stronger than that of molten iron, of which the output of building materials (rebar and wire rod) was weakly repaired, and the year-on-year decline narrowed by 2 percentage points from November to -102%, with a slight accumulation of inventories;The output of plates (hot-rolled coils, cold-rolled coils and medium and heavy plates) fell from their highs, and the year-on-year increase narrowed by 1 compared with November4 percentage points to 27%, inventory continues to deplete. On the demand side,In the past 3 weeks, the apparent demand for large steel varieties has tended to fall, of which the apparent demand for building materials has expanded year-on-year, while the apparent demand for plates has increased year-on-year.
Second, cement destocking in the off-season. 1) Production fell month-on-month. From December 2nd to December 15th, the operating rate of cement mills fell seasonally, slightly lower than the same period last year. 2) Cement shipments are reduced. According to the statistics of the Centennial Construction Network, from November 29th to December 19th, the overall amount of cement out of the country fell overall, down 5 percent from the average value in November3%, a decrease of 1 from the same period last year4 percentage points to -263%。Among them, the direct supply of infrastructure cement decreased by 4 month-on-month9%, up 2% from the same period last year (-6. in November.)6%), the drag on the use of cement for housing construction and civil use has increased. 3) Inventories continue to fall. Since December, the cement storage capacity ratio has further declined, 4 lower than the same period last year6% (0. in November.)6%）。
Third, the operating rate of asphalt is lower, and the production of chemical products is differentiated. The downstream demand for asphalt is dominated by road construction, and the growth rate of investment in the road transport industry in the first 11 months of this year was -02%, the performance is weaker than the overall infrastructure, and the demand for asphalt in winter falls seasonally, which inhibits production. At the same time, since December, the first volatility has been large, there are differences in the inventory and demand of different chemicals, the expected profit trend is differentiated, and the operating rate of methanol, soda ash, styrene and other chemicals has fallen;The operating rate of Shandong refining, pure benzene, PTA, polyester chips and other chips was slightly restored.
Fourth, the operating rate of automobile tires is differentiated, and the production of all-steel tires is weak. Automobile tires and semi-steel tires are mostly used in passenger cars and light trucks, and the operating rate in December was relatively stableAll-steel tires for automobiles, which are mainly used for heavy-duty commercial vehicles, performed better than the same period last year due to a seasonal decline in operating rates in December.
1.Steel
2.cement
3.Chemicals
4.Cars
2. Real estate: New home sales stabilized
New home sales stabilized. Since December (December 2 to 22), the average daily transaction area of new homes in the 61 sample cities we have counted has rebounded month-on-month compared with November, down -22% year-on-year, and is basically the same as the same period in November. Looking at the sales of new homes by city energy level, the first line since December (64%)> second line (-13.).8%)> four or five lines (-22.).5%)> third line (-68%). On the margin, since December, the year-on-year growth rate of first- and second-tier cities has increased compared with November, while the year-on-year growth rate of new home sales in third-, fourth- and fifth-tier cities has declined.
The year-on-year decline in the sales area of second-hand houses narrowed. The average daily area of second-hand housing in the 15 sample cities in December was slightly higher than that in November, 26% higher than the same period last year (16% in November), and about -39% lower than the average for the same period from 2019 to 2021 (-32% in November). On a comparable basis, the transaction area of second-hand houses accounted for 40%, and the margin declined.
3. Domestic demand: offline activity is declining
Since December, freight has fallen seasonally, domestic passenger travel has fallen slightly, and household consumption has shown a weak recovery.
First, freight flows have fallen. 1）According to G7 data, since December, the average volume of vehicle freight flow, the throughput of public logistics parks, and the throughput index of distribution centers of major express delivery companies has fallen by 4-5 percentage points compared with November, and the year-on-year performance has also weakened. According to the data of the Ministry of Transport, from December 4 to 17, the growth rate of highway truck traffic, postal express pickup, and postal express delivery volume was -8 compared with the average in November1%、-5.4%, -8%, only rail freight volume increased by 17%, and the year-on-year growth rate of relevant indicators fell from November.
Second, passenger traffic weakened slightly. Since December, the average daily passenger volume of the 24-city subway has decreased by 2 compared with November8%, the number of domestic flights decreased by 2 compared with the average in November2%, while the number of flights operated by international and Hong Kong, Macao and Taiwan increased by 88%。
Third, the weak recovery of household consumption. 1) According to the data of the Passenger Car Association, the retail sales of passenger cars in the first 17 days of December increased by 7% year-on-year, and the retail sales of passenger cars in the narrow sense are expected to increase by 9% month-on-month3%, a year-on-year increase of 48%, narrowing from the 25% increase in November. 2) The box office popularity of the movie is not high. Since December, the average daily box office of films across the country has rebounded to 91.6 million yuan month-on-month, but it is lower than the same period in 2019 and 2020.
4. External demand: Month-on-month performance was weak
Since December, merchant ships in the Red Sea have been attacked many times, pushing the freight rates of relevant routes and the postponement of delivery dates, bringing additional pressure to foreign trade. In the first three weeks of December, China's export container freight rate accumulated **26%, Ningbo and Shanghai port freight rates are **30% and 24% respectively, and the cumulative freight rates of European routes are **77%。
Port cargo and container throughput declined. According to the data of the Ministry of Transport, from December 4 to 17, the cumulative container and cargo throughput of the monitored ports decreased month-on-monthThe year-on-year growth rate was 12% and 18%, down 1. from the November average2 and 21 percentage point.