Report Industry Investment Ratings - Gold: Short - term, the trend is expected to be oscillating and bullish [13] - US Dollar Index: Short - term, expected to be oscillating [17] - US Stock Index Futures: Attention should be paid to the risk of correction at the current level [19] - Stock Index Futures: It is recommended to allocate each stock index evenly [21] - Treasury Bond Futures: In early August, it is a favorable period for the bond market, but the upward rhythm is relatively tortuous. It is not recommended to chase the long position [25] - Soybean Meal: The futures price is expected to maintain a pattern of being strong domestically and weak overseas. If Sino - US relations do not make substantial progress, the price center is expected to rise [29][30] - Edible Oils (Soybean, Rapeseed, Palm): For palm oil, pay attention to Indonesia's production recovery in August; for soybean oil, pay attention to the sustainability of domestic exports [32] - Sugar: Zhengzhou sugar is expected to be weakly oscillating in the short - term, with an operating range of 5500/5600 - 5900 yuan/ton [37] - Steam Coal: The price is expected to oscillate around the long - term agreement price of 670 yuan. Pay attention to the price performance after the decline in rigid demand in mid - to late August [39] - Rebar/HRC: Adopt a cautious and oscillating approach in the near future [43] - Iron Ore: In the short - term, it is expected to continue the oscillating market. Pay attention to the impact of the switch of production restriction expectations [45] - Corn Starch: The price difference between rice and powder is expected to remain low and oscillating [49] - Corn: In the medium - to long - term, it is expected to maintain an oscillating downward trend. It is recommended to hold new - crop short positions [51] - Coking Coal/Coke: In the short - term, it is expected to be oscillating. The 09 contract will focus on the delivery situation [54] - Polysilicon: In the short - term, the price is expected to operate between 45000 - 57000 yuan/ton. Consider a callback - bullish strategy and sell out - of - the - money put options [57] - Industrial Silicon: The short - term decline sentiment has not been fully released. Consider gradually closing short positions and look for potential long - entry opportunities later [59] - Lead: Pay attention to short - term buying opportunities at low prices and manage positions well. For arbitrage, temporarily observe. Consider long - short arbitrage opportunities between domestic and foreign markets [61] - Zinc: Unilaterally, it is recommended to observe. Low - position speculative long positions can be held in the short - term. For arbitrage, pay attention to medium - term long - short arbitrage opportunities. Observe the domestic and foreign markets [66] - Copper: Unilaterally, it is expected to oscillate at a high level. Pay attention to overseas mine disturbance risks. Consider long positions at low prices. For arbitrage, pay attention to the copper long - short arbitrage strategy between domestic and foreign markets [71] - Lithium Carbonate: Consider lightly going long at low prices. For the 9 - 11 spread, take profit [73] - Nickel: In the short - term, it is difficult for the price to fall deeply. Pay attention to band trading opportunities [76] - Liquefied Petroleum Gas: The price is expected to be weakly oscillating [79] - Crude Oil: Short - term price volatility is expected to increase [82] - Caustic Soda: The subsequent market is expected to be oscillating [83] - Pulp: The futures price is expected to decline following the commodities [85] - PVC: The futures price is expected to decline following the commodities [86] - Styrene: The near - month contract is expected to be weakly oscillating. For pure benzene, consider allocation opportunities if the expected decline occurs [89][90] - Bottle Chip: Consider the opportunity to expand the processing margin by rolling long at low prices [93] - Urea: The Indian tender result is better than expected, which may support the futures price [96] Core Views - The employment market data is weakening, and the Fed's expectation of interest rate cuts is increasing. Gold is oscillating and bullish in the short - term. The US dollar is affected by Trump's tariff policy and is expected to be oscillating in the short - term [12][16][17] - A - share market shows strong resilience, with high risk appetite. The service trade deficit in China has decreased significantly in the first half of the year [21] - In the agricultural product market, the increase in sugar imports in some countries indicates low global consumer inventories. The supply and demand of various agricultural products are affected by factors such as production, weather, and inventory [26][36] - In the black metal market, steel prices are oscillating, and the impact of environmental protection production restrictions on actual output needs to be rationally evaluated. The supply and demand of coal and iron ore are affected by factors such as weather and policy [38][42] - In the non - ferrous metal market, the price trends of different metals are affected by factors such as production, demand, and policy. For example, copper is affected by the Fed's interest rate cut expectation and overseas mine disturbances [71] - In the energy and chemical market, the prices of various products are affected by factors such as supply, demand, and international market conditions. For example, the price of crude oil is affected by OPEC+ production decisions and Trump's tariff policy [81] Summary by Directory 1. Financial News and Reviews 1.1 Macro Strategy (Gold) - Trump plans to significantly increase tariffs on India, and the Fed's interest rate cut expectation is increasing. Gold is oscillating and bullish in the short - term [11][12][13] 1.2 Macro Strategy (Foreign Exchange Futures - US Dollar Index) - Trump's tariff policy against India and the Fed official's statement on interest rate cuts. The US dollar is expected to be oscillating in the short - term [15][16][17] 1.3 Macro Strategy (US Stock Index Futures) - The EU suspends trade counter - measures against the US, and the June factory orders in the US decreased. Attention should be paid to the risk of correction at the current level [18][19] 1.4 Macro Strategy (Stock Index Futures) - China's service trade deficit decreased in the first half of the year. A - shares show strong resilience. It is recommended to allocate each stock index evenly [21] 1.5 Macro Strategy (Treasury Bond Futures) - The central bank conducts reverse repurchase operations. In early August, it is a favorable period for the bond market, but the upward rhythm is tortuous. It is not recommended to chase the long position [22][24][25] 2. Commodity News and Reviews 2.1 Agricultural Products (Soybean Meal) - Brazil's soybean production is expected to increase, and the US soybean's good - to - excellent rate is 69%. The domestic soybean meal futures price is expected to be strong domestically and weak overseas [26][27][29] 2.2 Agricultural Products (Soybean, Rapeseed, Palm Oils) - The inventory of soybean oil increased, and that of palm oil decreased. Pay attention to Indonesia's palm oil production and the sustainability of domestic soybean oil exports [31][32] 2.3 Agricultural Products (Sugar) - Pakistan and the Philippines plan to import sugar. The international sugar price is expected to be weakly oscillating, and Zhengzhou sugar is expected to be weakly oscillating in the short - term [34][35][37] 2.4 Black Metals (Steam Coal) - Rainfall in Inner Mongolia affects coal production. The coal price is expected to oscillate around 670 yuan, and pay attention to the price after the decline in rigid demand [38][39] 2.5 Black Metals (Rebar/HRC) - Trump's tariff policy on multiple countries. Steel prices are oscillating, and the impact of environmental protection production restrictions needs to be rationally evaluated [40][42][43] 2.6 Black Metals (Iron Ore) - The transportation of Mariposa iron ore is approved. The iron ore price is expected to oscillate in the short - term [44][45] 2.7 Agricultural Products (Corn Starch) - The prices of starch by - products are weak and stable. The price difference between rice and powder is expected to remain low and oscillating [46][49] 2.8 Agricultural Products (Corn) - Typhoons affect the weather in some areas. Corn is expected to decline oscillatingly in the medium - to long - term [50][51] 2.9 Black Metals (Coking Coal/Coke) - Rainfall in Inner Mongolia affects coal production. The coking coal and coke prices are expected to be oscillating in the short - term [52][53][54] 2.10 Non - Ferrous Metals (Polysilicon) - India releases a solar cell list. The polysilicon price is expected to operate between 45000 - 57000 yuan/ton in the short - term [55][57] 2.11 Non - Ferrous Metals (Industrial Silicon) - The production of industrial silicon in July increased. The short - term decline sentiment has not been fully released [58][59] 2.12 Non - Ferrous Metals (Lead) - The lead ingot inventory decreased slightly. Consider short - term buying opportunities at low prices [60][61] 2.13 Non - Ferrous Metals (Zinc) - The zinc inventory increased. The zinc price is expected to be oscillating, and pay attention to the integer - level support [62][65][66] 2.14 Non - Ferrous Metals (Copper) - Vale emphasizes copper growth. The copper price is expected to oscillate at a high level, and pay attention to overseas mine disturbances [67][71] 2.15 Non - Ferrous Metals (Lithium Carbonate) - MinRes and Dynamic modify the lithium joint - venture terms. Consider lightly going long at low prices [72][73] 2.16 Non - Ferrous Metals (Nickel) - The price of nickel iron is difficult to repair. Nickel is expected to have band trading opportunities [75][76] 2.17 Energy and Chemicals (Liquefied Petroleum Gas) - The price of LPG is expected to be weakly oscillating [78][79] 2.18 Energy and Chemicals (Crude Oil) - Trump threatens to increase tariffs on India. Short - term price volatility is expected to increase [80][81][82] 2.19 Energy and Chemicals (Caustic Soda) - The caustic soda market is expected to be oscillating [82][83] 2.20 Energy and Chemicals (Pulp) - The pulp market is expected to decline following the commodities [84][85] 2.21 Energy and Chemicals (PVC) - The PVC market is expected to decline following the commodities [86] 2.22 Energy and Chemicals (Styrene) - The near - month contract of styrene is expected to be weakly oscillating. For pure benzene, consider allocation opportunities if the expected decline occurs [87][89][90] 2.23 Energy and Chemicals (Bottle Chip) - Consider the opportunity to expand the processing margin by rolling long at low prices [92][93] 2.24 Energy and Chemicals (Urea) - The Indian tender result is better than expected, which may support the futures price [95][96]

Group 1: Report's Investment Rating - There is no information about the industry investment rating in the report. Group 2: Core Views of the Report - In Q2 2025, the production and transportation volume of the four major iron ore mines increased significantly, with a year - on - year growth of 3.5% and a quarter - on - quarter increase of nearly 20%, basically catching up to last year's level in the first half of the year [1][5]. - The trend of "increase in mainstream mines and decrease in non - mainstream mines" was further reflected in Q2, and the dominant position of mainstream mines in Australia and Brazil in the global seaborne iron ore market may be further strengthened [2][44]. Group 3: Summary of Each Section 1. Overview of the Four Major Mines' Q2 2025 Operations - The total production/transportation volume of the four major mines in Q2 2025 was 293 million tons, with a year - on - year increase of 3.5% and a quarter - on - quarter increase of nearly 20%. The significant volume boost by BHP and Fortescue in June was the main driver of the excellent performance in Q2 [1][5]. - In the first half of 2025, only Rio Tinto's production was still significantly behind last year's level. BHP and Fortescue both raised their production and transportation targets for FY26, indicating confidence in their supply chain efficiency and new production capacity [6]. 2. Key Points of the Four Major Mines' Quarterly Reports 2.1 Vale - **Overall Situation**: In Q2, Vale's iron ore production was 83.599 million tons, a year - on - year increase of 3.7%. Sales volume was 77.346 million tons, a year - on - year decrease of 3.1%. The C1 cash cost was 22.2 US dollars/wet ton, a year - on - year decrease of 10.8%. The AIC was 55.3 US dollars/wet ton, a year - on - year decrease of 9.6% [8][12][13]. - **Operation Details**: The northern system's Q2 production reached 41.222 million tons, a record high since 2021. The southeast system performed well, with the fourth processing line of Brucutu driving production to a new high. The southern system's production declined due to construction issues. The company plans to conduct maintenance on the São Luis pellet plant in Q3. Pellet sales in Q2 were about 7.5 million tons, a year - on - year decrease of 16% [15][16][19]. 2.2 Rio Tinto - **Overall Situation**: In Q2, Rio Tinto's Pilbara mine production was 83.743 million tons, a year - on - year increase of 5.4%, reaching a new high since 2018. The shipping volume was 79.887 million tons, a year - on - year decrease of 0.5%. The company maintained its Pilbara shipping volume guidance range of 323 - 338 million tons but expected the actual volume to be closer to the lower limit [22][23]. - **Operation Details**: The Western Range project was put into production in March and is expected to reach full production by the end of 2025. The Brockman Syncline 1 project is planned to be put into production in 2027, and the Hope Downs - 2 project started construction in June. The first shipment of the Guinea Simandou iron ore project is still expected in November, with an estimated shipment of 50 - 100 million tons in 2025 [25][27]. 2.3 BHP - **Overall Situation**: In Q2, BHP's equity production was 70.339 million tons, a year - on - year increase of 1.6%. Sales volume was 69.843 million tons, a year - on - year increase of 2.2%. In FY2025, the full - year equity production was about 263 million tons, higher than the previous guidance range. The company announced an upward - adjusted equity production guidance range of 258 - 269 million tons for FY2026 [31][32]. - **Operation Details**: In the Western Australia WAIO mine, the improvement of logistics efficiency and the full - production of the South Slope project contributed to the production increase. In the Brazilian Samarco, the production continued to rise with the help of the capacity ramp - up of the No. 2 concentrator [34][35]. 2.4 Fortescue - **Overall Situation**: In Q2, the company's iron ore shipping volume was 55.2 million tons, a year - on - year increase of 2.8%. In FY2025, the full - year shipping volume was 198.4 million tons, a year - on - year increase of 3.5%. The C1 cost of Pilbara hematite in Q2 was 16.29 US dollars/wet ton, a quarter - on - quarter decrease of 7.1%. The company announced a shipping volume guidance range of 195 - 205 million tons and a C1 cost guidance range of 17.50 - 18.50 US dollars/wet ton for FY2026 [37][38]. - **Operation Details**: The shipping volume of the Iron Bridge project in Q2 was 2.4 million tons, and the full - year volume in FY2025 was 7.1 million tons. The company aims to reach full production of 22 million tons/year in FY2028 [41]. 3. Summary and Future Outlook - In Q2, the four major mines made efforts to increase production. Rio Tinto and Vale contributed over 7 million tons of year - on - year incremental production. - The trend of "increase in mainstream mines and decrease in non - mainstream mines" was further strengthened. From January to June 2025, the global seaborne iron ore shipment volume decreased slightly year - on - year, while the shipments from Australia and Brazil increased, and their share in the global market reached 83.3% [44].

Group 1 - The article emphasizes the importance of in-depth research and insights for informed investment decisions in the Latin American equity market [1] Group 2 - The analyst has over 5 years of experience in equity analysis specifically focused on Latin America [1]

Core Insights - Vale, one of the world's largest iron ore producers, reported a 24% year-on-year decline in net profit to $2.12 billion for Q2, which was still better than analyst expectations [1] - Revenue for the period from April to June fell 11% year-on-year to $8.8 billion, aligning with market forecasts [1] - The average price of iron ore fines for the quarter was $85.1 per ton, reflecting a more than 13% decline compared to the previous year [1] Financial Performance - The adjusted EBITDA decreased by 15% to $3.39 billion due to weak iron ore prices [1] - The company managed to reduce costs across all categories: iron ore costs down by 10%, copper by 60%, and nickel by 30% [1] - Capital expenditures were reduced by $200 million year-on-year, with a budget target of $5.9 billion for 2025 likely to be achieved [1] Operational Developments - Vale has received preliminary approval for the Bacaba copper mine, which will extend the service life of the Sossego mining area [1] - The second furnace at the Osapama mine began trial operations this month, with nickel product production expected to commence in Q4 [1]

Company Strategy - Vale 正在考虑投资 Eurasian Resources Group 在巴西的矿山项目 [1] - Vale 表示尚未找到开发该项目具有成本效益的方式 [1] Industry Dynamics - 铁矿石生产商 Vale 持续评估对 Eurasian Resources Group 巴西矿山项目的投资 [1]

Core Insights - Vale S.A. is one of the largest iron ore miners globally, with high-grade operations in Brazil, Canada, Indonesia, and Australia [1] - The company is also focusing on energy transition metals, indicating a strategic shift towards sustainable resources [1] Company Overview - Vale S.A. operates in the mining sector, primarily dealing with iron ore, and has diversified interests in energy transition metals [1] - The company has a significant presence in multiple countries, enhancing its operational footprint and resource availability [1] Analyst Background - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology [1] - The analyst has transitioned from writing a blog to creating a value investing-focused YouTube channel, showcasing a commitment to in-depth company research [1]

Core Viewpoint - The company expects a low impact from Trump's tariffs on its business operations [1] Group 1 - The company assesses that the tariffs will not significantly affect its overall performance [1] - The management believes that the current market conditions and demand will mitigate potential negative effects from the tariffs [1]

Financial Data and Key Metrics Changes - Pro forma EBITDA reached $3.4 billion in Q2 2025, improving 7% quarter on quarter but down 14% year on year due to a 13% decline in iron ore reference prices [11] - C1 cash cost for iron ore reached $22.2 per ton, down 11% year on year, marking the fourth consecutive quarter of year on year decline [12] - Recurring free cash flow reached $1 billion in Q2, $500 million higher than in Q1, driven by higher pro forma EBITDA and lower working capital variation [14] Business Line Data and Key Metrics Changes - Iron ore production reached 84 million tons, a 4% increase year on year, marking the highest second quarter output since 2018 [4] - Nickel production rose 44% year on year, driven by productivity initiatives and the ramp-up of Voisey's Bay underground mine [5] - Copper production increased 18% compared to the same period last year, representing the best second quarter since 2019 [6] Market Data and Key Metrics Changes - The global steel market remains volatile but is stabilizing after intense tariff negotiations, with expectations of higher margins for remaining mills [88] - Crude steel production in China declined by 3% year on year, while pig iron production only declined by 0.8%, indicating a shift towards more efficient production methods [90] - India’s crude steel production increased by over 9% this year, with expectations of selling more than 10 million tons of iron ore to India [93] Company Strategy and Development Direction - The company is focused on building a leading mining platform with a strong portfolio in copper and iron ore, aiming for accretive growth opportunities [2] - The new Carajas program aims to accelerate the development of essential projects in one of the most attractive mineral deposits globally [7] - The company emphasizes operational excellence and cost efficiency as core elements of its strategy, aiming to reduce costs while increasing production [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance for both C1 and all-in costs despite inflationary pressures [12] - The company is committed to becoming a trusted partner for society, recently publishing its first sustainability-related financial information report [9] - Management highlighted the importance of flexibility in product offerings to adapt to market conditions and capture greater value [24] Other Important Information - The company has started commissioning Sapuma's second furnace, which is expected to contribute 12 to 15 kilotons of nickel production [6] - The Board of Directors approved a distribution of $1.4 billion in interest on capital to be paid in September, reinforcing the commitment to return value to shareholders [15] - The company is exploring the use of derivatives for potential buybacks, depending on cash flow performance in the second half of the year [44] Q&A Session All Questions and Answers Question: Production strategy and product mix adjustments - The company is focusing on value optimization and adjusting product offerings dynamically based on market conditions and premiums [23][24] Question: Nickel and copper profitability improvements - Management indicated that ongoing efficiency programs are expected to yield further cost savings and profitability improvements in nickel and copper [30][32] Question: Future cost opportunities and guidance - Management expressed confidence in delivering cost guidance for iron ore and base metals, citing stable operational performance [42] Question: Shareholder returns and buyback programs - The company is preparing to potentially pursue buybacks or additional dividends in the second half of the year, depending on cash flow performance [44][56] Question: Impact of briquette projects on customer acceptance - The briquette line is stabilizing with significant interest from clients, and the company is conducting trials to validate product performance [75][76] Question: Sequential performance expectations for the second half - Management cautioned that the second half may see more planned maintenance impacting volumes, but overall performance is expected to remain strong [79][80]

Financial Data and Key Metrics Changes - Pro forma EBITDA reached $3.4 billion in Q2 2025, improving 7% quarter on quarter but down 14% year on year due to a 13% decline in iron ore reference prices [9] - C1 cash cost for iron ore reached $22.2 per ton, down 11% year on year, marking the fourth consecutive quarter of year on year decline [10] - Recurring free cash flow reached $1 billion in Q2, $500 million higher than in Q1, driven by higher pro forma EBITDA and lower working capital variation [12] Business Segment Data and Key Metrics Changes - Iron ore production reached 84 million tons, a 4% increase year on year, marking the highest second quarter output since 2018 [3] - Nickel production rose 44% year on year, driven by productivity initiatives and the ramp-up of Voisey's Bay underground mine [4] - Copper production increased 18% compared to the same period last year, representing the best second quarter since 2019 [5] Market Data and Key Metrics Changes - The global steel market remains volatile but is stabilizing after intense tariff negotiations, with expectations of higher margins for remaining mills [86] - Crude steel production in China has declined by 3% year on year, while pig iron production has only declined by 0.8%, indicating a shift towards higher quality ores [87] - India’s crude steel production has increased by over 9% this year, leading to increased demand for iron ore from Vale [89] Company Strategy and Development Direction - The company is focused on building a leading mining platform with a strong portfolio in copper and iron ore, aiming for operational excellence and flexibility in product offerings [1][4] - The new Carajas program aims to accelerate copper growth by developing essential projects in one of the most attractive mineral deposits globally [6] - The company emphasizes a disciplined capital allocation approach to ensure healthy shareholder remuneration and value creation [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance for both C1 and all-in costs despite inflationary pressures [11] - The company is committed to becoming more competitive and efficient, with a focus on reducing costs and increasing production [7] - Management highlighted the importance of safety and sustainability as core values, with ongoing efforts to improve performance and transparency [14] Other Important Information - The company published its first sustainability-related financial information report, outlining climate-related risks and opportunities [7] - The Board of Directors approved a distribution of $1.4 billion in interest on capital to be paid in September, reinforcing the commitment to return value to shareholders [13] Q&A Session All Questions and Answers Question: How is Vale adapting its commercial and product strategy in light of market conditions? - Management emphasized a focus on value optimization and flexibility in the supply chain to adjust product offerings dynamically based on market changes [21][22] Question: Can we expect more cost savings and profitability improvements in nickel and copper? - Management confirmed ongoing efficiency programs are yielding significant cost reductions and improvements in profitability across both nickel and copper segments [27][30] Question: What is the outlook for shareholder returns and potential buyback programs? - Management indicated that additional dividends or buybacks will depend on cash flow performance in the second half of the year, with preparations in place for potential actions [41][42] Question: How is the company addressing the decline in pellet premiums? - Management noted that the decline is linked to reduced demand due to increased steel exports from China, but expects a recovery in pellet prices as new electric arc furnaces come online globally [60][61] Question: What is the status of the Briquette projects and their market acceptance? - Management reported strong interest from clients and successful trials, indicating a positive outlook for the briquette products [74][75] Question: How does the company view the iron ore market for the second half of the year? - Management expressed a balanced outlook for the global iron ore market, with stable demand expected despite some volatility [90]

Operational Performance - Vale's iron ore production increased by 18% from 79 Mt in 2Q24 to 93 Mt in 2Q25[13] - Nickel production saw a significant increase of 44%, rising from 28 kt in 2Q24 to 40 kt in 2Q25[13] - Copper production experienced a modest increase of 4%, growing from 81 kt in 2Q24 to 84 kt in 2Q25[13] - The company's high-potential recordable injuries decreased by 55% from 1H24 to 1H25, showcasing improved safety[10] Cost Competitiveness - Iron ore C1 cash costs decreased by 11% from US$24.9/t in 2Q24 to US$22.2/t in 2Q25[28] - Demurrage costs decreased by 39% in 2Q25 due to enhanced shipping planning[20] - Copper all-in costs decreased significantly by 60% from US$3,700/t in 2Q24 to US$1,500/t in 2Q25[33] - Nickel all-in costs decreased by 30% from US$17,700/t in 2Q24 to US$12,400/t in 2Q25[35] Financial Performance - Proforma EBITDA decreased from US$3,997 million in 2Q24 to US$3,424 million in 2Q25, impacted by lower iron ore prices[26] Strategic Initiatives - The Bacaba project is expected to start up in the first half of 2028, with a capacity of approximately 50 ktpa and a CAPEX of around US$290 million[15] - Vale invested US$1.4 billion in decarbonization since 2020[22]