The State Council Information Office of China has announced that a briefing involving finance minister Lan Fo’an will be held on October 12, where the aim will be "to intensify countercyclical adjustment of fiscal policy to promote high-quality economic development," according to the official statement. After disappointing news from the NDRC meeting on October 8, market sources are expecting more stimuli to be announced this time.
In fact, different analysts from the major investing banks are expecting at least RMB 2 trillion ($283 billion) to be issued by special bonds to provide support for the targeted GDP growth of five percent set for 2024. Morgan Stanley and HSBC Holdings forecast RMB 2 trillion, while Citigroup’s estimation is RMB 3 trillion. Nevertheless, some analysts said that, to provide solid support, the government will have to announce up to RMB 10 trillion worth of stimuli.
The steel market in China has been fluctuating in a narrow range today, with rebar and HRC futures at Shanghai Futures Exchange increasing by 0.23 percent and 0.62 percent today after two days of declines. “China returned from its holiday with some higher expectations, but with no new stimuli the price [in the local market] had been adjusted down after the rocket hike before the holiday and now the market is more stable. All are waiting for a package of RMB 2-4 trillion in the new stimulus policy tomorrow and some new bullish story might happen again in China,” a Chinese trader said.