Quantitative Models and Construction Methods Model Name: Continuous Hedging Strategy - **Construction Idea**: The strategy is based on the analysis of basis convergence factors and optimization strategies[43] - **Construction Process**: - **Backtesting Parameters and Settings**: - **Backtesting Period**: July 22, 2022, to June 27, 2025[44] - **Spot End**: Hold the total return index of the corresponding underlying index[44] - **Futures End**: Use 70% of the funds for the spot end, short the corresponding nominal principal amount of CSI 500 (CSI 300, SSE 50, CSI 1000) stock index futures contracts, occupying the remaining 30% of the funds. After each rebalancing, recalculate the quantity of the spot and futures ends based on the product's net value[44] - **Rebalancing Rules**: Continuously hold quarterly/monthly contracts until the remaining days to expiration are less than 2 days. On that day, close the position at the closing price and simultaneously short the next quarterly/monthly contract at the closing price[44] - **Remarks**: Allocate equal principal to the spot and futures ends, without considering transaction fees, impact costs, and the non-infinite divisibility of futures contracts[44] - **Evaluation**: The strategy is designed to optimize hedging by continuously adjusting positions based on basis convergence factors[43] Model Name: Minimum Basis Strategy - **Construction Idea**: The strategy selects the contract with the smallest annualized basis discount for hedging[45] - **Construction Process**: - **Backtesting Parameters and Settings**: - **Backtesting Period**: July 22, 2022, to June 27, 2025[45] - **Spot End**: Hold the total return index of the corresponding underlying index[45] - **Futures End**: Use 70% of the funds for the spot end, short the corresponding nominal principal amount of CSI 500 (CSI 300, SSE 50, CSI 1000) stock index futures contracts, occupying the remaining 30% of the funds. After each rebalancing, recalculate the quantity of the spot and futures ends based on the product's net value[45] - **Rebalancing Rules**: When rebalancing, calculate the annualized basis of all tradable futures contracts on the day and select the contract with the smallest annualized basis discount for opening a position. Hold the same contract for 8 trading days or until the remaining days to expiration are less than 2 days, then select a new contract (excluding futures contracts with less than 8 days to expiration). Even if the selection result is to hold the original contract unchanged, continue to hold for 8 trading days[45] - **Remarks**: Allocate equal principal to the spot and futures ends, without considering transaction fees, impact costs, and the non-infinite divisibility of futures contracts[45] - **Evaluation**: The strategy aims to minimize basis discount by selecting the optimal contract for hedging[45] Model Backtesting Results Continuous Hedging Strategy - **CSI 500 Index Futures**: - **Annualized Return**: -2.77% (monthly), -2.08% (quarterly), -0.98% (minimum basis)[47] - **Volatility**: 3.88% (monthly), 4.77% (quarterly), 4.69% (minimum basis)[47] - **Maximum Drawdown**: -8.15% (monthly), -8.34% (quarterly), -7.97% (minimum basis)[47] - **Net Value**: 0.9215 (monthly), 0.9405 (quarterly), 0.9718 (minimum basis)[47] - **Annual Turnover**: 12 (monthly), 4 (quarterly), 17.53 (minimum basis)[47] - **2025 YTD Return**: -3.31% (monthly), -1.35% (quarterly), -0.69% (minimum basis)[47] - **CSI 300 Index Futures**: - **Annualized Return**: 0.58% (monthly), 0.77% (quarterly), 1.42% (minimum basis)[52] - **Volatility**: 3.02% (monthly), 3.37% (quarterly), 3.16% (minimum basis)[52] - **Maximum Drawdown**: -3.95% (monthly), -4.03% (quarterly), -4.06% (minimum basis)[52] - **Net Value**: 1.0171 (monthly), 1.0226 (quarterly), 1.0418 (minimum basis)[52] - **Annual Turnover**: 12 (monthly), 4 (quarterly), 15.46 (minimum basis)[52] - **2025 YTD Return**: -0.63% (monthly), 0.27% (quarterly), 0.82% (minimum basis)[52] - **SSE 50 Index Futures**: - **Annualized Return**: 1.07% (monthly), 2.04% (quarterly), 1.76% (minimum basis)[56] - **Volatility**: 3.14% (monthly), 3.57% (quarterly), 3.16% (minimum basis)[56] - **Maximum Drawdown**: -4.22% (monthly), -3.75% (quarterly), -3.91% (minimum basis)[56] - **Net Value**: 1.0315 (monthly), 1.0605 (quarterly), 1.0521 (minimum basis)[56] - **Annual Turnover**: 12 (monthly), 4 (quarterly), 15.81 (minimum basis)[56] - **2025 YTD Return**: 0.07% (monthly), 1.11% (quarterly), 1.09% (minimum basis)[56] - **CSI 1000 Index Futures**: - **Annualized Return**: -6.00% (monthly), -4.44% (quarterly), -3.79% (minimum basis)[58] - **Volatility**: 4.73% (monthly), 5.78% (quarterly), 5.60% (minimum basis)[58] - **Maximum Drawdown**: -14.00% (monthly), -12.63% (quarterly), -11.11% (minimum basis)[58] - **Net Value**: 0.8523 (monthly), 0.8843 (quarterly), 0.9009 (minimum basis)[58] - **Annual Turnover**: 12 (monthly), 4 (quarterly), 16.02 (minimum basis)[58] - **2025 YTD Return**: -8.76% (monthly), -4.36% (quarterly), -3.55% (minimum basis)[58] Quantitative Factors and Construction Methods Factor Name: Cinda-VIX - **Construction Idea**: Reflects the market's expectation of future volatility of the underlying asset[61] - **Construction Process**: - **Algorithm**: Based on the methodology in the report series "Exploring Market Sentiment Implied in the Options Market"[61] - **Data**: As of June 27, 2025, the 30-day VIX values for SSE 50, CSI 300, CSI 500, and CSI 1000 are 17.47, 16.92, 23.84, and 21.35, respectively[61] - **Evaluation**: The index accurately reflects the volatility expectations of the market for different time horizons[61] Factor Name: Cinda-SKEW - **Construction Idea**: Measures the skewness of implied volatility across different strike prices[69] - **Construction Process**: - **Algorithm**: Based on the methodology in the report series "Exploring Market Sentiment Implied in the Options Market"[69] - **Data**: As of June 27, 2025, the SKEW values for SSE 50, CSI 300, CSI 500, and CSI 1000 are 95.51, 97.95, 93.74, and 101.14, respectively[70] - **Evaluation**: The index provides valuable insights into market expectations of extreme events and tail risks[70] Factor Backtesting Results Cinda-VIX - **SSE 50**: 17.47[61] - **CSI 300**: 16.92[61] - **CSI 500**: 23.84[61] - **CSI 1000**: 21.35[61] Cinda-SKEW - **SSE 50**: 95.51[70] - **CSI 300**: 97.95[70] - **CSI 500**: 93.74[70] - **CSI 1000**: 101.14[70]

Group 1: Income Growth Discrepancy - There is a persistent income growth gap between first-tier cities and the national average, with first-tier cities' income growth lagging by approximately 0.8 percentage points in 2024[2] - In Q1 2024, the income growth rate for first-tier cities was 4.6%, nearly 1 percentage point lower than the national growth rate[7] - The income growth rate for first-tier cities has been consistently lower than the national average since 2020, indicating a widening gap[2] Group 2: Income Structure Differences - The primary source of disposable income for both first-tier cities and the national average is wage income, with growth rates for wage income being similar[10] - However, first-tier cities rely more on property income for growth, while the national average sees growth driven by net transfer income[10] - Property income accounts for 14% of disposable income in first-tier cities, compared to only 8.3% in the national average[18] Group 3: Dual Constraints on First-Tier Cities - First-tier cities face dual constraints on income growth: property income and net transfer income, with the latter being more significantly impacted by fiscal pressures[19] - The recovery of net transfer income in first-tier cities is expected to be slow due to high fiscal dependency, limiting the reduction of income disparity with the national average[26] - Positive changes in property income growth have been observed, particularly in Beijing, where property income growth reached 2.3% in Q1 2023, suggesting potential for narrowing the income gap[26] Group 4: Risks and Challenges - Consumer confidence recovery is slow, and policy implementation may not meet expectations, posing risks to income growth in first-tier cities[32]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company is expected to improve liquidity through the issuance of new H shares and convertible bonds, with a total expected fundraising net amount of approximately HKD 58.33 billion [2][3] - The company has successfully transformed into a comprehensive logistics leader, expanding into various emerging sectors such as express delivery, cold chain, and international logistics, which are expected to enhance profitability and revenue growth [4] - The projected net profit for the company from 2025 to 2027 is expected to grow by 17.1%, 19.7%, and 18.2% respectively, indicating a strong growth trajectory [4] Summary by Sections Fundraising and Liquidity Improvement - The company plans to issue 70 million new H shares at a price of HKD 42.15 per share, which is a discount of approximately 8.8% from the closing price on June 25 [2] - Additionally, the company intends to issue zero-coupon convertible bonds worth HKD 29.5 billion, with an initial conversion price of HKD 48.47 per share, representing a premium of about 5.3% [3] - The funds raised will be used to enhance international and cross-border logistics capabilities, develop advanced technologies, and optimize the company's capital structure [3] Financial Projections - The total revenue for the company is projected to reach HKD 315.54 billion in 2025, with a year-on-year growth rate of 10.9% [5] - The company's gross profit margin is expected to improve from 12.8% in 2023 to 14.8% in 2027 [5] - The earnings per share (EPS) is forecasted to increase from CNY 2.39 in 2025 to CNY 3.37 in 2027 [5] Profitability and Valuation - The company is expected to maintain a strong cash flow, with cash assets amounting to approximately CNY 427.71 billion as of the end of Q1 2025 [3] - The projected price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are 21.1x, 17.6x, and 14.9x respectively, indicating a favorable valuation outlook [4]

Investment Rating - The industry investment rating is "Positive" [2] Core Viewpoints - The report emphasizes the importance of focusing on Hong Kong's dividend assets in the context of a low-interest environment, which benefits financing costs for Hong Kong stocks, particularly in the water and waste incineration sectors [3][16] - The report highlights a significant reduction in capital expenditure in the industry, indicating a shift towards positive free cash flow and stable dividend payouts [3][16] - The report suggests that the "14th Five-Year Plan" will maintain high demand for energy conservation, environmental protection, and resource recycling, which is expected to sustain high industry prosperity [34] Market Performance - As of June 20, the environmental sector declined by 2.51%, underperforming the broader market, with specific declines in various sub-sectors such as water governance and waste incineration [3][9][10] - The report notes that the green electricity trading volume in China reached 220.945 billion kWh from January to May 2025, a year-on-year increase of 49.2% [26] Company Announcements - The report provides detailed financial forecasts and dividend rates for several companies, including: - Yuehai Investment: 2024 dividend payout ratio of 65%, dividend yield of 4.66% [18] - Beikong Water: 2024 dividend payout ratio of 91%, dividend yield of 6.41% [20] - China Water: 2024 dividend payout ratio of 30%, dividend yield of 6.1% [21] - China Everbright Environment: 2024 dividend payout ratio of 41.84%, dividend yield of 5.94% [22] - Green Power Environmental: 2024 dividend payout ratio of 73.39%, dividend yield of 9% [24] - Tianjin Chuangye Environmental: 2024 dividend payout ratio of 34%, dividend yield of 5.58% [25] Investment Recommendations - The report recommends focusing on quality operational assets in the water and waste incineration sectors, which are expected to benefit from stable earnings and cash flow [34] - Key recommendations include companies such as Hanlan Environment, Xingrong Environment, and Hongcheng Environment, with additional attention to companies like Wangneng Environment and Junxin Co. [34]

Investment Rating - The industry investment rating is "Positive" [1] Core Viewpoints - Oil prices have been on the rise due to increased geopolitical tensions in the Middle East and a significant drop in U.S. crude oil inventories, with Brent and WTI prices reaching $75.48 and $73.84 per barrel respectively as of June 20, 2025 [7][29] - The oil and petrochemical sector has shown mixed performance, with the sector down 1.03% while the broader market (CSI 300) fell by 0.45% [8][11] - The report highlights the increase in global offshore drilling platforms, with a total of 378 self-elevating platforms and 134 floating platforms as of June 16, 2025 [35] Summary by Sections Oil Price Review - As of June 20, 2025, Brent crude futures settled at $75.48 per barrel, up $1.25 (+1.68%) from the previous week, while WTI crude futures rose to $73.84 per barrel, an increase of $0.86 (+1.18%) [29] Offshore Drilling Services - The number of global self-elevating drilling platforms increased by 1 to 378, while floating drilling platforms decreased by 2 to 134 as of June 16, 2025 [35] U.S. Crude Oil Supply - U.S. crude oil production was reported at 13.431 million barrels per day, an increase of 0.03 million barrels from the previous week [49] U.S. Crude Oil Demand - U.S. refinery crude oil processing averaged 16.862 million barrels per day, down 364,000 barrels from the previous week, with a refinery utilization rate of 93.20%, a decrease of 1.1 percentage points [59] U.S. Crude Oil Inventory - Total U.S. crude oil inventories stood at 823 million barrels, a decrease of 11.243 million barrels (-1.35%) from the previous week [68] U.S. Product Oil Inventory - As of June 13, 2025, U.S. gasoline, diesel, and jet fuel inventories were reported at 230.013 million, 109.398 million, and 44.428 million barrels respectively, with slight increases in gasoline and diesel inventories [59] Related Companies - Key companies mentioned include China National Offshore Oil Corporation (CNOOC), China Petroleum & Chemical Corporation (Sinopec), and China National Petroleum Corporation (PetroChina) [1]

Report Industry Investment Rating No relevant content provided. Report's Core View - In Q1 2025, the scale of US covered - call strategy ETFs exceeded $100 billion, with JPMorgan's products leading the industry in scale. The growth momentum of JPMorgan's covered - call strategy products is strong, and their income characteristics show strategic homology [3][7][106]. - JPMorgan Equity Premium Income ETF (JEPI) was established in May 2020. Its investment goal is to pursue current income while maintaining the expectation of capital appreciation. As of May 2025, it is the world's largest actively managed ETF [4][34][106]. - The fund's investment strategy is divided into the stock side and the options side. On the stock side, it selects S&P 500 component stocks to build a low - volatility portfolio; on the options side, it sells out - of - the - money call options through ELN [106]. - The fund's advantages such as income enhancement, stable dividends, low volatility, and low fees, as well as the rise of the investment advisory industry, jointly drive product demand [6][9][106]. Summary According to Related Catalogs 1. Overseas Covered - Call Strategy Funds Expand, and JPMorgan's Products Lead in Scale - **US Covered - Call Strategy ETF Scale Exceeds $100 Billion, and JPMorgan's Products Lead**: In 2024, the scale of US covered - call strategy products exceeded $100 billion. As of Q1 2025, the scale of US covered - call ETFs reached $101.807 billion. JPMorgan's covered - call strategy product scale accounted for 60.55% of the US covered - call strategy product scale, and its ETF scale accounted for 61.05% of the US covered - call strategy ETF scale [16][19][21]. - **JPMorgan's Covered - Call Strategy Products Have a Consistent Investment Framework and Strong Growth Momentum**: JPMorgan's covered - call strategy products have the same investment goal and similar investment strategies. From 2022 to 2024, the combined scale growth of 3 covered - call strategy products under JPMorgan exceeded $10 billion each year. Their income characteristics show strategic homology [7][26][27]. 2. JEPI: The Largest Actively Managed ETF - **Fund Basic Information**: JEPI was established in May 2020, with the S&P 500 Total Return Index as its performance benchmark. Its investment goal is to pursue current income while maintaining the expectation of capital appreciation, through creating an actively managed stock portfolio mainly composed of S&P 500 index component stocks and selling S&P 500 index call options through ELN [34][35]. - **Product Scale and Share Continuously Increase**: Starting from about $20 million at the initial listing, the product scale has been rising. As of May 20, 2025, the total asset management scale reached $40.024 billion, and the product share exceeded 700 million [35][36][39]. - **Product Positioning**: The product mainly invests in US stocks and ELN, with the investment area concentrated in the US. It has heavy positions in the information technology, finance, industry, and healthcare industries, and the stock investment is relatively dispersed [7][42][44]. 3. Product Strategy is Divided into Stock Portfolio and Covered - Call Strategy - **Main Strategy Composed of Defensive Stock Portfolio and Options Superposition Strategy**: The fund aims to reduce volatility and seek continuous premium income. Its investment portfolio is divided into a defensive stock portfolio constructed through fundamental research and an operation of selling out - of - the - money S&P 500 index options to generate monthly distributable income [50][53]. - **Stock Investment Strategy: Seeking to Create a Stock Portfolio with Lower Volatility than the S&P 500**: The fund invests at least 80% of its assets in stocks under normal circumstances, mainly in S&P 500 component stocks. It uses a systematic investment process to build a portfolio with lower volatility than the S&P 500 index [58]. - **The Product Invests in the Covered - Call Strategy through ELN and Continuously Obtains Option Premium Income**: ELN is an over - the - counter derivative. The fund's investment in ELN has a position limit, and it uses the covered - call strategy to embed a short position in call options. The option premium provided by ELN is an important source of the fund's income [63][64]. 4. Composite Advantages Jointly Drive Product Demand - **The Fund's Investment in ELN Has an Income Enhancement Advantage**: From 2023 to 2024, the fund's investment ratio in ELN was relatively stable, between 13% and 15%. The covered - call strategy embedded in ELN can enhance income, and the annualized interest rate of ELN is highly positively correlated with the VIX level [70][73]. - **The Fund's Continuous and Stable Dividend Mechanism Helps Enhance Investor Stickiness**: As of April 30, 2025, the fund's dividend rate was 8.93%. It creates income through dividend income and option premium and distributes dividends monthly in full [76][79]. - **The Fund Has the Advantage of Low Volatility**: Since its listing, the product's volatility and maximum drawdown performance have been better. As of Q1 2025, the annualized volatility was 12.71%, far lower than the 20.21% volatility of the S&P 500 index [88][90]. - **The Fund's Fee Creates a Low - Cost Strategic Advantage**: As an actively managed covered - call strategy ETF, JEPI has a fee of only 0.35%, lower than the passive equity ETFs in the US in 2024, meeting the low - fee preference of ETF investors [98]. - **Fund Investment Advisors and Institutional Investors Jointly Promote Product Demand**: The number of institutional investors has been continuously expanding, with the position - holding ratio stably above 30%. The position - holding ratio of investment advisors has increased significantly [99][103]. 5. Summary - The scale of US covered - call strategy ETFs exceeded $100 billion in Q1 2025, and JPMorgan led the industry with a market share of 60.55%. The growth momentum of JPMorgan's covered - call strategy products is strong [106]. - JEPI is the world's largest actively managed ETF. Its investment strategy is divided into the stock side and the options side, and its multiple advantages and the rise of the investment advisory industry jointly drive product demand [106].

Domestic Developments - The Shanghai Stock Exchange has established a special action plan to enhance the ESG ratings of listed companies, implementing six key measures to improve ESG performance[3] - The ChiNext Index has removed companies rated below B in the National ESG rating system, aiming to strengthen the overall quality of listed firms[13] ESG Financial Products Tracking - As of June 23, 2025, a total of 3,573 ESG bonds have been issued in China, with a total outstanding amount of CNY 5.49 trillion, of which green bonds account for 61.40%[30] - In June 2025, 96 ESG bonds were issued, raising CNY 107.7 billion, while the total issuance over the past year reached 1,009 bonds with a total amount of CNY 1.15 trillion[30] - There are currently 893 ESG mutual funds in the market, with a total net asset value of CNY 1,044.95 billion, where ESG strategy products represent 52.70% of the total[36] - In June 2025, 14 new ESG products were launched, totaling 3.319 billion units, with a total of 240 ESG mutual funds issued in the past year, amounting to 179.629 billion units[36] - The market has 931 ESG bank wealth management products, with pure ESG products making up 57.79% of the total, and 61 new ESG products were issued in June 2025[41] Index Performance - As of June 20, 2025, most major ESG indices outperformed the market, with the CSI 300 ESG index showing the smallest decline at 0.09% and the Wind All A Sustainable ESG index showing the largest decline at 0.95%[42] - Over the past year, major ESG indices have generally increased, with the Huazheng ESG index leading with a rise of 12.35%, while the Shenzhen ESG 300 index had the smallest increase at 7.01%[42] Expert Insights - The ISSB Chairman emphasized China's commitment to enhancing the quality and transparency of climate-related financial disclosures, contributing to global comparability in information disclosure[44] - The Shanghai New Financial Research Institute highlighted five major imbalances in the development of green finance, including supply-demand imbalance and infrastructure disparities[44] Risk Factors - Potential risks include slower-than-expected ESG development, challenges in advancing carbon neutrality strategies, and delays in policy implementation[45]

Investment Rating - The industry investment rating is "Neutral" as the industry index is expected to be in line with the benchmark [121] Core Views - The report highlights that the cost price center has significantly increased, leading to a narrowing of product price differentials in the oil refining sector [1] - The Brent crude oil average price for the week ending June 20, 2025, was $75.53 per barrel, reflecting a week-on-week increase of $9.84 [1][2] - Domestic key refining project price differentials decreased to ¥2353.90 per ton, a decline of ¥49.10 per ton (-2.04%), while foreign key refining project price differentials increased to ¥1000.57 per ton, up by ¥48.15 per ton (+5.06%) [1][2] Summary by Sections Refining Sector - The geopolitical tensions in the Middle East, particularly the conflict between Israel and Iran, have raised supply concerns, contributing to a strong increase in international oil prices [1] - Domestic and international refined oil prices have generally risen, with domestic diesel, gasoline, and aviation kerosene averaging ¥7275.43, ¥8224.29, and ¥6273.29 per ton respectively [13] Chemical Sector - Chemical prices have seen a slight increase, primarily supported by cost factors, but the price differentials have narrowed [1] - Polyethylene and polypropylene prices increased, but the rise was insufficient to improve price differentials significantly [51] - Prices for pure benzene and styrene rose significantly due to cost support, while acrylonitrile prices remained stable [51] Polyester Sector - The PX price followed cost logic, with a significant increase due to the conflict in the Middle East, leading to a rise in product prices [76] - The average price of PTA increased to ¥5095.71 per ton, with an industry average net profit of -¥166.46 per ton [82] - The polyester filament market saw a slight increase in prices, but overall profitability remained limited due to insufficient orders [85] Performance of Major Refining Companies - The stock performance of six major private refining companies showed declines, with Rongsheng Petrochemical down by 5.84% and Hengli Petrochemical down by 4.25% over the past week [108] - Over the past month, the stock performance of these companies has also been negative, with significant declines noted for Oriental Rainbow and Hengli Petrochemical [108]

Investment Rating - The investment rating for the coal mining industry is "Positive" [2] Core Viewpoints - The current phase is the early stage of a new upward cycle in the coal economy, with a resonance between fundamentals and policies, making it an opportune time to accumulate coal sector investments [11][12] - The coal supply-demand balance is expected to remain tight over the next 3-5 years, with high barriers to entry and strong cash flow characteristics for quality coal companies [12] - The coal price is anticipated to rebound due to increasing consumption during the summer peak and decreasing inventory levels [11][12] Summary by Sections 1. Coal Price Tracking - As of June 22, the market price for Qinhuangdao port thermal coal (Q5500) is 610 CNY/ton, unchanged from the previous week [30] - The price for Shanxi-produced coking coal at Jingtang port remains at 1250 CNY/ton, also unchanged [32] - International thermal coal prices show slight fluctuations, with Newcastle coal at 66.0 USD/ton, up 0.3 USD/ton week-on-week [30] 2. Coal Supply and Demand Tracking - The utilization rate of sample thermal coal mines is 94.5%, an increase of 0.5 percentage points week-on-week [48] - Daily coal consumption in inland provinces increased by 46.60 thousand tons/day (+15.32%) and in coastal provinces by 20.00 thousand tons/day (+11.66%) [49] - The operating rate of steel blast furnaces is at 83.82%, up 0.41 percentage points week-on-week [11] 3. Inventory Situation - As of June 19, coal inventory in inland provinces increased by 115.30 thousand tons, while coastal provinces saw an increase of 52.20 thousand tons [49] - The available days of coal in inland provinces decreased by 3.30 days, indicating tighter supply [49] 4. Investment Recommendations - Focus on stable and high-performing companies such as China Shenhua, Shaanxi Coal, and China Coal Energy [12] - Consider companies with high elasticity and potential for recovery, such as Yanzhou Coal and Guohua Energy [12] - Pay attention to quality metallurgical coal companies like Huabei Mining and Pingmei Shenma [12]

Investment Rating - The investment rating for the steel industry is "Positive" [2] Core Viewpoints - The steel sector experienced a decline of 2.20% last week, underperforming the broader market, with specific segments like special steel down 2.58% and long products down 2.32% [3][11] - Iron water production increased, with a capacity utilization rate of 90.8% for blast furnaces as of June 20, reflecting a week-on-week increase of 0.21 percentage points [3][26] - The consumption of five major steel products rose, with a total consumption of 884.2 million tons, marking a week-on-week increase of 16.08 million tons [3][37] - Social inventory of five major steel products decreased to 913.1 million tons, down 14.37 million tons week-on-week, and down 28.19% year-on-year [3][45] - The average price of ordinary steel decreased slightly, with the comprehensive index at 3361.1 yuan/ton, down 3.71 yuan/ton week-on-week [3][51] - The profit for rebar from blast furnaces increased to 155 yuan/ton, up 20.0 yuan/ton week-on-week, while electric arc furnace profits remained negative at -357.04 yuan/ton [3][59] Summary by Sections 1. Market Performance - The steel sector underperformed the market, with a 2.20% decline compared to a 0.45% drop in the Shanghai and Shenzhen 300 index [11][13] 2. Supply - As of June 20, the average daily iron water production was 2.4218 million tons, a week-on-week increase of 0.57% [26] - The capacity utilization rate for electric furnaces was 54.5%, down 2.19 percentage points week-on-week [26] 3. Demand - The total consumption of five major steel products reached 884.2 million tons, with a week-on-week increase of 16.08 million tons [37] - The transaction volume of construction steel was 97,000 tons, down 0.22% week-on-week [37] 4. Inventory - Social inventory of five major steel products decreased to 913.1 million tons, down 1.55% week-on-week [45] - Factory inventory was 425.8 million tons, down 0.30% week-on-week [45] 5. Prices & Profits - The comprehensive index for ordinary steel was 3361.1 yuan/ton, down 0.11% week-on-week [51] - The profit for rebar from blast furnaces was 155 yuan/ton, an increase of 14.81% week-on-week [59]