Investment Rating - The investment rating for the copper industry is Neutral, which has been downgraded [7] Core Insights - The significant drop in copper prices is attributed to the U.S. government's unexpected policy shift regarding tariffs on copper imports, which did not meet market expectations [4][5] - The U.S. is highly dependent on imported refined copper, with 2024 consumption projected at 1.545 million tons and domestic production at 826,000 tons, leading to a compromise in tariff policy to protect domestic manufacturing [5] - Short-term impacts include increased price volatility, a return to average price differentials between COMEX and LME copper, and rising U.S. copper inventories due to trade shifts [5] - Mid-term expectations suggest a return to fundamental pricing logic as the tariff policy stabilizes, with potential for price recovery during the fourth quarter production peak [5] - Long-term supply constraints remain, with challenges in copper mining exploration and development, supporting a bullish outlook for copper prices [9] Summary by Sections - **Tariff Policy Impact**: The U.S. imposed a 50% tariff on copper semi-finished products and high-copper derivatives, leading to a significant market reaction with a 17.88% drop in COMEX copper futures [3][4] - **Market Dynamics**: The initial expectation of comprehensive tariffs led to speculative trading, which was disrupted by the actual policy announcement, resulting in a historical price drop [4] - **Supply and Demand Outlook**: The long-term supply bottleneck in copper mining and the increasing importance of copper in electrical and AI industries suggest a sustained upward price trend despite short-term volatility [9]

Historical Context - From 1949 to 1977, China's monetary policy served as an administrative tool under a unified banking system, lacking market foundations and credit creation mechanisms[3][4]. - Post-1978, the separation of central and commercial banking functions led to an independent monetary policy framework, establishing a dual-layer currency creation mechanism[4][5]. Transition Phases - From 1998 to 2012, a quantity-based control system emerged, with M2 and total credit volume as core targets, driven by non-market interest rates and external pressures[5][6]. - After 2012, the effectiveness of quantity tools diminished, prompting a shift towards price-based monetary policy, with interest rates becoming central to regulation[6][7]. Structural Changes - By 2020, the proportion of new RMB loans in total social financing dropped from 91.9% in 2002 to 57.5%, indicating a shift towards off-balance-sheet financing[7][30]. - The balance of current accounts as a percentage of GDP decreased from around 10% in 2007 to below 3% post-2011, reflecting changes in foreign exchange reserves and monetary policy dynamics[7][34]. Policy Mechanisms - The establishment of a rate corridor in 2015 clarified policy signals, with the SLF as the upper limit and excess reserve rates as the lower limit, enhancing market expectations[9][10]. - As of 2023, the monetary policy framework has been optimized to strengthen the price-oriented function of policy rates, narrowing the rate corridor from 245 basis points to 70 basis points[10][11]. Future Outlook - The price-based framework is expected to deepen, with structural monetary policy tools gaining priority to address financing gaps in emerging sectors like technology and green industries[12][11]. - The focus will shift from total quantity control to structural optimization, emphasizing targeted resource allocation in key areas such as housing and infrastructure[12][11].

GDP Performance - In Q2, China's GDP grew by 5.2% year-on-year, while nominal GDP growth was only 3.9%, indicating a mismatch between supply and demand[3] - The deflator index further expanded to -1.3%, highlighting weak price levels[3] Production Insights - Industrial value-added growth was 6.8% in June, with a Q2 average of 6.4%, driven by strong exports[14] - The service sector maintained stable growth, with a cumulative production index increase of 5.9%[14] Investment Trends - Fixed asset investment growth slowed to 2.8% in Q2, down 1.4 percentage points from Q1[22] - Infrastructure investment growth was 8.9%, while real estate investment saw a significant decline of -12.9% in June, with a cumulative decline of -11.2%[24] Consumption Patterns - Retail sales grew by 4.6% year-on-year in Q2, a decrease from Q1, with durable goods consumption supported by "old-for-new" policies[39] - Restaurant consumption weakened significantly, with June's growth plummeting to 0.9%[39] Outlook and Policy Recommendations - To meet the annual GDP target of 5%, a growth rate of at least 4.7% is required in the second half of the year[42] - Continued policy support is essential to boost domestic demand, particularly in real estate and manufacturing sectors[42] Risk Factors - Potential risks include domestic policy implementation falling short of expectations and unexpected changes in overseas policies[43]

Group 1: Export Performance - June export growth rate was 5.9%, up 1.2 percentage points from the previous month, exceeding the Wind consensus forecast by 2.7 percentage points[3] - Cumulative export growth for the first half of the year was 5.9%, slightly higher than last year's full-year growth of 5.8%[3] - Trade surplus for the first half of the year reached $585.95 billion, a year-on-year increase of 34.52%, surpassing last year's growth of 20.7%[3] Group 2: Regional Export Trends - Exports to the U.S. decreased by 16.1%, but the decline narrowed by 18.4 percentage points from the previous month, with U.S. exports accounting for 12% of total exports[4] - Exports to ASEAN countries maintained high growth at 16.9%, with Vietnam, Thailand, and the Philippines showing growth rates of 23.8%, 27.9%, and 10.2% respectively[4] - Exports to the EU grew by 7.6%, down 4.4 percentage points from the previous month, with Germany's export growth slowing to 3.5%[4] Group 3: Product-Specific Insights - Labor-intensive product exports showed improvement, with declines narrowing to -7.1% for bags, -1.6% for textiles, and -4.0% for footwear[5] - Mechanical and high-tech product exports grew by 8.2% and 6.9% respectively, with integrated circuits, automobiles, and ships showing high growth rates of 24.2%, 23.1%, and 23.6%[5] - The contribution of mechanical products to export growth was 4.8 percentage points, while high-tech products contributed 1.6 percentage points[5] Group 4: Import Trends - Import growth returned to positive territory at 1.1%, a significant rebound of 4.5 percentage points from the previous month[6] - Mechanical and high-tech products were the main drivers of import growth, with rates of 6.4% and 10.0% respectively[6] - Energy product imports faced declines, with coal, crude oil, and natural gas showing decreases of -44.7%, -15.0%, and -5.9% respectively due to falling prices[6] Group 5: Future Outlook - Short-term export resilience is expected to continue, supported by tariff exemptions and ongoing "export grabbing" strategies[7] - However, medium to long-term pressures may build due to the expiration of tariff exemptions and potential demand exhaustion[7] - Risks include unexpected changes in overseas policies and slower-than-expected economic recovery abroad[8]

Group 1: Report's Investment Rating - No information provided on the industry investment rating Group 2: Core Views - The bond market yield has been oscillating at a high level and has declined. In 2025, the yields of treasury bonds and policy bank bonds at all tenors have shown a trend of high - level oscillation. The short - end interest rate has risen significantly, while the long - end interest rate has risen slightly, and the spread between the long - end and short - end has narrowed. The prices of treasury bond futures have corrected from high levels [3]. - Affected by multiple factors, the bond market yield has oscillated. In Q1 2025, the central bank tightened the money market in the short term, causing the yields of bonds at all tenors to rise and the prices of treasury bond futures to correct from high levels. Since Q2, due to Trump's tariff policies, the demand for bond - type assets as a hedge has increased, leading to a decline in bond yields and an increase in treasury bond futures prices. The monetary policy remains loose, the capital price has declined, and the bond yield is at a relatively low level [3]. - Looking forward, the bond yield may mainly show an oscillating pattern in the short term and remain in a downward trend in the long term. The macro - economic fundamentals are being repaired, but the repair progress of investment, prices, and profits is still slow. The monetary policy remains loose, the money supply growth rate is expected to increase, and there is still a possibility of reserve requirement ratio cuts and interest rate cuts in the second half of the year. The capital price is at a relatively low level. Overall, the bond yield is expected to remain in a downward trend [7]. Group 3: Summary by Directory 1. Bond Market Review: After Tariff Disturbances, Yields Oscillate at Low Levels - **1.1 Bond Yields: Overall in a Downward Trend with Short - Term Oscillations** - After the tariff disturbances, the bond market has mainly oscillated. The 10 - year treasury bond yield has mostly been between 1.6% and 1.7%, and was mostly below 1.65% in June. From the perspective of the term structure, the short - end interest rate has shown a downward trend, the long - end interest rate has oscillated, and the term spread is generally at a low level and has recently increased slightly [12]. - The closing prices of treasury bond futures at different tenors have oscillated at high levels. The prices of 2 - year, 5 - year, and 10 - year treasury bond futures have all shown a downward trend, with the 10 - year showing a steeper slope [3]. - **1.2 Attribution of Bond Market Fluctuations: Liquidity Tightening Pushes Up Yields, Tariff Disturbances Pull Down Yields** - In Q1, the bond yield showed a low - level oscillation and an upward trend, mainly related to the central bank's monetary policy operations. In January, the bond yield was at a relatively low level due to the moderately loose monetary policy. From February to March, the bond yield rose because of the central bank's short - term tight monetary policy [16]. - In Q2, the bond yield decreased rapidly and remained at a low level, related to Trump's tariff shock and the central bank's moderately loose monetary policy. In April, Trump's tariff policy increased the demand for hedging assets such as bonds, pulling down the bond yield. Since mid - April, the bond market has continued to oscillate at a low level, mainly due to the continued loose monetary policy, slow repair of the economic fundamentals, and low capital prices [17]. - **1.3 Bond Market Participants: Institutions Overall Increase Holdings of Interest - Rate Bonds, and Holdings of Credit Bonds Decline** - Financial institutions have overall increased their holdings of interest - rate bonds. Commercial banks, credit unions, insurance companies, securities companies, and overseas institutions have all increased their holdings of interest - rate bonds. For example, in May 2025, commercial banks' holdings of interest - rate bonds reached 73.2 trillion yuan, an increase of 3.5 trillion yuan compared to the end of 2024 [18]. - Financial institutions' holdings of inter - bank credit bonds have declined. Commercial banks, credit unions, insurance companies, securities companies, and overseas institutions have all reduced their holdings of credit bonds. For example, in May 2025, commercial banks' holdings of credit bonds were 2.586 trillion yuan, a decrease of about 180 billion yuan compared to the end of 2024 [21]. 2. Policy Front: Monetary Policy Remains Moderately Loose, and Structural Policies Continue to Exert Force - **2.1 Monetary Policy Tone: Moderately Loose and Precise and Effective** - The monetary policy tone has been adjusted from prudent to moderately loose. In December 2024, the Central Political Bureau Meeting and the Central Economic Work Conference proposed to implement a moderately loose monetary policy. In 2025, relevant policies have continued to emphasize this tone [33]. - In May 2025, the central bank introduced a structural monetary policy, including reducing the reserve requirement ratio by 0.5 percentage points, providing about 1 trillion yuan of long - term liquidity to the market; adjusting policy interest rates; and implementing a series of measures in terms of quantity, price, and structure to support the real economy [34]. - **2.2 Money Supply: The Growth Rates of M1 and M2 Continue to Increase, and the Financing Demand of the Real Economy Improves** - The M1 growth rate has continued to improve, and the gap between M2 and M1 has decreased. The M2 year - on - year growth rate has been on the rise. The M1 year - on - year growth rate has increased significantly, indicating the continuous repair of the real economy. The decrease in the gap between M2 and M1 indicates the continuous improvement of currency activation [37]. - The social financing increment has improved, and the decline in the difference between M2 and the year - on - year growth rate of social financing stock has narrowed. The year - on - year growth rate of social financing stock has been on the rise, indicating the continuous improvement of the financing demand of the real economy. From the perspective of important sub - items of social financing, RMB loans have increased year - on - year, and government bond financing has continuously supported the performance of social financing [40][45]. - **2.3 Money Price: The Central Bank Cuts Reserve Requirement Ratios and Interest Rates, and Market Liquidity is Abundant** - Policy interest rates are in a downward trend, and the reserve requirement ratio has been cut. The 7 - day reverse repurchase rate, MLF rate, and LPR rate have all been lowered, and the reserve requirement ratios of large, medium, and small financial institutions have been cut [68]. - **2.4 RMB Exchange Rate: Slightly Appreciated, and Expected to Remain Stable in the Future** - The RMB exchange rate against the US dollar has slightly appreciated but remained stable overall. The Sino - US treasury bond yield spread is at a low level. After the tariff disturbances, the RMB may appreciate slightly, but the exchange rate is expected to remain stable overall [72]. 3. Fundamental Aspects: The Growth Rates of Total Consumption and Exports are Fast, while Investment, Prices, and Profits are Under Pressure - **3.1 Aggregate: GDP Growth Rate is Higher than the Target, Highlighting Growth Resilience** - In 2024, China's GDP achieved a growth rate of 5%. In 2025, the annual growth target is still about 5%. In Q1, the GDP growth rate reached 5.4%, and in Q2, it reached 5.2%. The cumulative growth rate in the first half of the year was 5.3%, and it is expected that the annual growth target will be easily achieved [78]. - **3.2 Production: The Repair Progress is Moderately Fast, but Manufacturing Expectations are Weak** - The growth rate of industrial added value above a designated size has been relatively stable. The PMI has increased marginally but remained below the boom - bust line, indicating that the manufacturing production repair sentiment needs to be improved [81]. - From the perspective of high - frequency data, the year - on - year growth rate of the daily coal consumption of key power plants has been moderately fast. The blast furnace operating rate has been at a low level, indicating that the repair progress of the steel industry and related industries is slow. The operating rates of automobile semi - steel tires and full - steel tires have shown different repair progress, and the operating rates of PTA, PX, UPR, polyester staple fibers, and Jiangsu and Zhejiang looms have shown different trends, indicating that the chemical and textile industries' repair progress is moderate [83][85][89][95]. - **3.3 Investment: The Growth Rate Declines Marginally, and Real Estate Investment Growth Rate Continues to be Negative** - The overall repair progress of investment is slow. The cumulative growth rate of fixed - asset investment from January to June 2025 was 2.8%, a decrease of 0.9 percentage points compared to the previous value. Manufacturing investment has a relatively fast growth rate but is declining marginally. Infrastructure investment growth has decreased. Real estate development investment has continued to be negative, dragging down the investment growth rate [98]. - High - frequency indicators related to real estate investment, such as land transaction area, land premium rate, commercial housing transaction area, second - hand housing listing volume, and second - hand housing listing price index, are all at low levels, indicating that the real estate market may still be in the stage of stopping the decline [103]. - **3.4 Consumption: The Repair Progress is Moderate, and the Growth Rates of Different Industries Show Differentiation** - The overall repair progress of consumption has accelerated. The cumulative growth rate of social retail sales from January to June 2025 was 5%. From the perspective of sub - items of social retail sales, the growth rates of different types of commodity consumption vary greatly. For example, the cumulative year - on - year growth rate of automobile consumption has improved, while the growth rate of petroleum and its products has been in a downward trend [123]. - **3.5 Trade: Exports are Less Affected by Tariffs, and Import Growth Rate is Slow** - From January to June, the cumulative year - on - year export growth rate was 5.9%, indicating that China's exports have been less affected by Trump's previous tariff policies. The import growth rate has improved marginally but remained in the negative growth range [136]. - The tariff disturbances are coming to an end, and the capital market is becoming more insensitive to tariffs. After rounds of Sino - US trade consultations, the tariffs on bilateral trade have been significantly reduced [141]. - **3.6 Prices: Consumer Prices Improve but Remain at a Low Level, and Producer Prices are Continuously in Negative Growth** - The CPI growth rate has improved marginally but remained at a low level. In June, the CPI year - on - year growth rate was 0.1%, turning positive from negative. Many food price indices are at low levels, indicating that the rebound of consumer prices is under pressure [143]. - The producer price index has continued to be negative. In June, the PPI year - on - year growth rate was - 3.6%, remaining in the negative growth range for 33 consecutive months. Many production - related price indices are in a downward trend, indicating that the repair of the production - end price index is under pressure [153]. - **3.7 Profits: Fall into Negative Growth, and the Growth Rate of Finished Goods Inventory Declines** - The growth rate of industrial enterprise profits has declined marginally and fallen into negative growth. The PPI year - on - year growth rate, which is highly related to price factors, has been continuously in negative growth, dragging down the performance of industrial enterprise profits [167]. - The cost and expenses per 100 yuan of operating income of industrial enterprises are at a high level, the asset - liability ratio has declined from a high level, and the year - on - year growth rate of finished goods inventory is at a low level [170]. 4. Capital Aspects: Prices have Fallen from High Levels, and Liquidity is Abundant - **4.1 Capital Price: At a Relatively Low Level, and Liquidity Continues to be Loose** - Capital prices are at a low level and in a downward trend. The 7 - day reverse repurchase rate, DR007, and R007 are all at relatively low levels, indicating that the capital market is abundant [176]. - **4.2 Deposit - Loan Difference: Reaching New Highs Continuously, and Deposit Growth Rate is Rebounding** - The deposit - loan difference of financial institutions has reached new highs continuously. The year - on - year deposit growth rate has rebounded, while the year - on - year loan growth rate has declined. The excess reserve ratio of financial institutions has declined marginally, indicating that the liquidity among financial institutions is abundant [178]. - **4.3 Inter - Bank Certificates of Deposit: Capital Prices are Low, and Certificate Yields are in a Downward Trend** - The yields of inter - bank certificates of deposit have rebounded recently but are in a long - term downward trend. The yields of AAA - rated 1 - year and 1 - month inter - bank certificates of deposit are in a downward trend. The spread between the 1 - month and 1 - year yields has been compressed and even inverted [181]. 5. Supply Aspects: Fiscal Policy is Exerting Force at a Moderate Pace, and Bond Net Financing is at a High Level - **5.1 Fiscal Policy Tone: More Active and Continuously Exerting Force** - The fiscal policy tone is more active. In December 2024, relevant meetings proposed to implement a more active fiscal policy. In 2025, the "Government Work Report" made clear arrangements for the deficit ratio, special treasury bonds, and local government special bonds. The cumulative new government debt scale in 2025 is 11.86 trillion yuan [185]. - **5.2 Fiscal Exertion: Large Space and Moderate Pace** - The general public budget expenditure progress is moderate, the issuance progress of treasury bonds is relatively fast, special treasury bonds have been issued, and there is still a large space for ultra - long - term special treasury bonds. The issuance progress of local government bonds is moderate. It is expected that the fiscal exertion progress will accelerate in the second half of the year, and the issuance progress of local government special bonds will speed up [6]. - **5.3 Bond Market Supply: Net Increase is Generally at a High Level, and the Rhythm is Stable** - In the first half of the year, the monthly net increase in bond issuance was at a high level in the same period, and interest - rate bonds were the main driving factor for the net increase in bonds. The weekly issuance rhythm of bonds is stable [6].

Credit Growth - The total social financing (社融) stock growth rate rebounded to 8.9%, with new social financing of 4.2 trillion yuan in June, an increase of 900.8 billion yuan year-on-year[1] - New short-term loans for enterprises reached 1.16 trillion yuan, a year-on-year increase of 490 billion yuan, marking the highest level this year[2] - New medium- and long-term loans for enterprises amounted to 1.01 trillion yuan, up 40 billion yuan year-on-year, also a relative high for the year[2] Household Credit - New short-term loans for households were 262.1 billion yuan, an increase of 15 billion yuan year-on-year, driven by online consumption growth during the "618" shopping festival[3] - New medium- and long-term loans for households reached 335.3 billion yuan, up 15.1 billion yuan year-on-year, indicating a continued moderate recovery[3] Monetary Indicators - M1 growth rate increased by 2.3 percentage points to 4.6% month-on-month, supported by a low base from the previous year[4] - M2 growth rate rose by 0.4 percentage points to 8.3%, ending a previous downward trend, driven by credit recovery and seasonal effects[4] Structural Changes - The structure of social financing is shifting from "government bond support" to "real economy expansion," indicating a phase of credit improvement[1] - However, the current credit recovery is primarily driven by policy and technical factors rather than endogenous demand expansion, with ongoing weak industrial profits and manufacturing orders limiting sustainable credit growth[6]

Group 1: Tariff Negotiations - On July 7, Trump extended the suspension of reciprocal tariffs originally set to expire on July 9, notifying 21 countries of tariffs ranging from 20% to 40% effective August 1[3] - The tariffs primarily target Asian and African countries, with Japan and South Korea facing a 25% tariff, while Laos and Myanmar face a 40% tariff[3] - Compared to the April 2 tariff list, the new tariffs show minimal changes, with Cambodia and Sri Lanka receiving lower tariffs by 13% and 14% respectively[4] Group 2: Trade Negotiation Objectives - The main goal of U.S. trade negotiations is to reduce tariffs imposed by other countries on U.S. goods, particularly in agriculture, energy, and automotive sectors[5] - The U.S. has made progress with countries like the UK, which agreed to increase beef imports from 1,000 tons to 13,000 tons, while the U.S. will reduce auto tariffs to 10-25%[5] - Ongoing negotiations with Japan have stalled due to strict agricultural protection policies, particularly regarding rice imports[5] Group 3: Market Reactions and Future Outlook - Following the issuance of tariff letters, the U.S. stock market reacted mildly, with a less than 1% drop on July 7 and a subsequent recovery on July 9[9] - The market's sensitivity to tariff negotiations has decreased since the easing of U.S. tariff policies from April to June, indicating a shift towards fundamental trading[9] - Future developments in tariff policies and their impact on the U.S. economy and corporate sectors will be closely monitored, especially with upcoming CPI data releases[9]

Employment Data - In June, the U.S. non-farm payrolls increased by 147,000, significantly exceeding the expected 106,000[3] - The unemployment rate fell to 4.1%, better than the anticipated 4.3%[3] - The labor force participation rate decreased to 62.3%, contributing to the decline in the unemployment rate[3] Employment Sector Performance - Government employment was the primary driver of the high job growth in June, adding 73,000 jobs compared to the previous month's 7,000[4] - Private sector job growth remained weak, with manufacturing jobs decreasing by 7,000 and wholesale trade jobs declining by 6,600[4] - The service sector added 68,000 jobs, but this was a slowdown from previous months[4] Structural Risks - The decrease in the labor force participation rate indicates underlying structural weaknesses in the labor market, despite the positive employment figures[5] - The rising number of unemployed individuals, despite a falling unemployment rate, suggests potential future challenges for the job market[5] - Immigration policies may lead to a continued decline in labor supply, potentially increasing unemployment rates without a corresponding rise in the unemployment rate[5] Market Implications - The strong employment data has raised expectations for interest rate cuts later in the year, with markets now betting on no rate cut in July and one cut each in September and December[5] - However, the long-term outlook for rate cuts has decreased significantly, reflecting increased risks to the U.S. economy[5] - The ongoing inflationary pressures from tariffs may complicate the fulfillment of market expectations for rate cuts[5]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The convertible bond price is steadily recovering, and the convertible bond index outperforms the equity index. The convertible bond market and equity market declined due to Trump's tariff hikes but gradually recovered. Multiple industries and individual bonds saw price increases, and the convertible bond valuation is differentiated with the overall conversion premium rate decreasing [3][103]. - The issuance pace of convertible bonds has slowed down, and the net financing amount is at a relatively low level. The pre - issuance scale varies among different industries, with the high - end manufacturing industry having a relatively large pre - issuance scale. The un - converted balance of convertible bonds also shows significant differences among industries [3][103]. - The tariff disturbance is coming to an end, and the negative impact of tariffs on the convertible bond market will fade. The US is facing inflation pressure, and it has started economic and trade consultations with many countries, so high tariffs are expected to be unsustainable [3][76][103]. - Policies to expand domestic demand and promote consumption are frequently introduced. As the policy effects continue to emerge, the upward trend of relevant convertible bonds is expected to continue. The growth rate of necessary consumption is constantly recovering, and the "trade - in" policy promotes the consumption growth of household appliances and communication equipment [4][104]. - The profitability of multiple underlying stock industries has improved, and the net profit of individual bonds has increased, further enhancing the intrinsic value of convertible bonds. Most underlying stock industries have positive median net profit growth rates both quarter - on - quarter and year - on - year [6][105]. 3. Summary According to the Directory 3.1 Convertible Bonds: Price Steadily Recovering, Individual Bond Valuation Volatility and Differentiation - **The convertible bond and equity indexes first declined and then rose, and the bond yield fluctuated downward**: Affected by Trump's "reciprocal tariff", the domestic equity market declined in the second quarter and then gradually recovered. The bond market yield showed a fluctuating downward trend, mainly due to the central bank's moderately loose monetary policy [10][11]. - **The convertible bond and equity indexes are highly correlated, and the convertible bond index outperforms the equity index**: The convertible bond market index and the equity market index have a similar trend, and the convertible bond index has a higher return rate. The convertible bond index also shows a certain correlation with the bond yield [15][16]. - **Multiple convertible bond industries rose, and the rise - fall direction is consistent with that of the underlying stocks**: Most convertible bond industries showed an upward trend, and the rise - fall amplitude of convertible bond industries was relatively less differentiated compared to that of underlying stock industries [22]. - **Most individual bond prices rose, and the proportion of rising bonds in many industries exceeded half**: Most convertible bonds rose compared to the previous quarter. In different industries, the number of rising convertible bonds was large, and the price fluctuations of individual convertible bonds were relatively large [25]. - **The convertible bond valuation is differentiated, and the overall conversion premium rate is decreasing**: The conversion premium rate of most individual bonds is decreasing, and there is no significant correlation between the conversion premium rate and the bond balance. The different quantiles of the conversion premium rate of individual bonds have all decreased [29]. 3.2 Convertible Bond Net Financing is at a Low Level, and the Supply Pace is Slowing Down - **The issuance of convertible bonds has slowed down, and the net financing is at a low level in the same period**: The issuance scale of convertible bonds has decreased, and the net financing amount is at a low level. The maturity scale of convertible bonds is relatively stable and at a low level [35]. - **The pre - issuance of different industries is differentiated, and the high - end manufacturing industry has a large scale**: The pre - issuance scale of convertible bonds is relatively sufficient, and there are significant differences among different industries. The high - end manufacturing industry has a relatively high pre - issuance scale [37]. - **The proportion of un - converted balance of convertible bonds is relatively high, and there are significant industry differences**: Most convertible bonds still have a relatively high balance. The proportion of the convertible bond balance to the initial issuance scale varies greatly among different industries [38]. 3.3 Tariff Disturbance is Approaching the End, and the External Negative Impact on the Convertible Bond Market is Fading - **Trump imposed tariffs randomly, covering goods from multiple countries and multiple fields**: Trump's government imposed several rounds of tariffs on goods exported to the US in 2025, involving goods from multiple countries and a wide range of products [43]. - **Tariffs impacted the equity and convertible bond indexes to decline and then gradually recovered steadily**: Trump's tariff hikes caused a sharp decline in the US equity market index, an increase in the demand for bond hedging, and a decrease in the US Treasury bond yield. As the tariffs eased, the US stock index gradually recovered, and the US Treasury bond yield gradually rebounded. In China, the A - share market, Treasury bond yield, and convertible bond market index also declined due to tariff impacts but gradually recovered [48][49][52]. - **Exports increased against the trend, and the impact of tariffs on investment and consumption has not yet appeared**: In terms of trade, the export growth rate continued to increase, and the import growth rate continued to improve. In terms of production, the growth rate of industrial added value was not significantly affected by tariffs, but the manufacturing PMI was significantly affected. In terms of investment, the impact of tariffs on fixed - asset investment and its main components has not yet appeared. The consumption growth rate increased marginally, and the consumer and producer price indexes decreased marginally [56][60][62]. - **Tariffs are unsustainable, and the external impact on the convertible bond market is expected to fade**: Trump's tariff hikes are likely a means to expand revenue, and the impact of tariffs in the first half of the year is expected to gradually subside. The US is facing inflation pressure, and high tariffs may prevent prices from falling. The US has conducted consultations on economic and trade issues with many countries, so high tariffs are not expected to last [76][77]. 3.4 Policies to Promote Consumption are Continuously Advancing, and the Upward Trend of Relevant Convertible Bonds is Expected to Continue - **Favorable policies to promote consumption are frequently introduced, and the recovery progress of necessary consumption is accelerating**: A series of favorable policies and specific measures to promote consumption have been introduced, and the support for consumption is extensive. The recovery progress of necessary consumption has accelerated, and the "trade - in" policy has promoted the consumption growth of household appliances and communication equipment [78][81][86]. - **The convertible bond consumption sector as a whole rose, and the rise - fall of individual bonds is differentiated**: Benefiting from the multiple favorable policies to promote consumption, the prices of convertible bonds in consumption - related fields generally increased, but the rise - fall of individual bonds was differentiated [90]. - **The "trade - in" policy continues to advance, and attention should be paid to the over - heating risk of new consumption**: The favorable policies to promote consumption are still advancing, and it is expected that consumption will remain an important engine for economic growth in the second half of the year. The continuous advancement of the "trade - in" policy is expected to continue to benefit the convertible bonds in related consumption fields. Attention should be paid to new consumption formats such as self - pleasing consumption and the "gacha economy", but the short - term over - heating risk should be noted [93][94][95]. 3.5 The Performance of Underlying Stocks has Improved, and the Intrinsic Value of Convertible Bonds may be Further Enhanced - **The net profit of underlying stock industries has achieved positive growth, and the net profit of individual bond underlying stocks has improved overall**: Most underlying stock industries have positive median net profit growth rates both quarter - on - quarter and year - on - year. The net profit of individual bond underlying stocks has improved comprehensively compared to the previous quarter [96][99]. - **Most underlying stocks have positive net profit growth, and their performance is moderate compared to listed companies in the same industry**: Compared with listed companies in the same industry that have not issued convertible bonds, the net profit growth rate of convertible bond underlying stocks is moderate. The net profit growth rate of convertible bond underlying stocks is differentiated, and in some industries, most underlying stocks have positive net profit growth rates [101]. 3.6 Convertible Bond Strategy: It is Recommended to Focus on Convertible Bonds for Expanding Domestic Demand, High Dividends, and High Growth - It is recommended to focus on the following main lines in the convertible bond market: expanding domestic demand, especially in the fields related to boosting consumption; high - dividend sectors such as banks; and individual bonds with high - growth underlying stocks [6][106].

Production Insights - As of the fourth week of June, the national blast furnace operating rate was 83.84%, stable compared to the previous period and above last year's average[11] - The rebar operating rate increased to 43.62%, up by 3.10 percentage points from the previous period, also above last year's average[11] - Cement mill operating rate decreased to 38.14%, down by 4.91 percentage points, slightly below last year's average[11] Inventory Trends - As of the fourth week of June, rebar inventory was 185.65 million tons, up by 1.85 percentage points from the previous period, but below last year's average[28] - Port iron ore inventory decreased to 139.27 million tons, down by 0.05 percentage points, also below last year's average[28] - Cement capacity utilization ratio was 62.76%, down by 0.68 percentage points, remaining stable compared to last year's average[28] Demand Dynamics - In June, the sales area of commercial housing in 30 cities increased by 45.73 percentage points, exceeding last year's average[55] - The average daily sales of passenger cars reached 95,374 units, reflecting an increase of 18.44% month-on-month and 3.00% year-on-year[82] - The total box office revenue for movies was 53.9 million yuan, up by 22.78% month-on-month, but still lower than last year's level[82] Trade and Pricing - The Shanghai Container Freight Index (SCFI) fell to 1861.51, down by 0.43% from the previous period, while the China Container Freight Index (CCFI) rose to 1369.34, up by 2.00%[89] - The average price of cement was 355.26 yuan per ton, down by 2.05% from the previous period, below last year's average[66] - The price of rebar was 3,070.50 yuan per ton, showing a slight increase of 0.10% from the previous period, but still below last year's average[67]