Nanhua Futures(SH:603093) Nan Hua Qi Huo·2025-07-22 05:19Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - In the first half of 2025, China's economy showed strong performance with a GDP growth of 5.3%, but structural contradictions were prominent. Some industries had over - capacity and profit pressure, while others had supply shortages but low gross margins. The "anti - involution" policy aimed to address these issues by eliminating backward production capacity, optimizing the supply structure, and promoting the development of new productive forces, with a focus on the coordinated optimization of the entire industrial chain [2][3]. - In the short - term, the "anti - involution" policy expectations dominated the commodity market, leading to emotional price increases in black (steel), glass, soda ash and other varieties. In the medium - term, it was necessary to observe the matching degree between policy implementation and downstream demand, and be vigilant against price corrections due to "more significant reduction in demand than supply". In the long - term, only through the coordinated optimization of the entire industrial chain could prices achieve sustainable and healthy growth [3]. Summary by Relevant Chapters 1. "Anti - involution" Policy Proposal 1.1 Macro Background - In the first half of 2025, China's GDP growth was strong, with a second - quarter year - on - year growth of 5.2% and a cumulative growth of 5.3% in the first half, easing the growth pressure in the second half. However, from the perspective of the "troika", economic support was somewhat special. Consumption growth relied on the "trade - in" policy, investment was mainly supported by infrastructure investment, and exports were strong due to the "rush to export" and "rush to re - export" effects in the first half. - In the second half, economic operation still faced pressures. Residents' demand was weak, and the gap between macro - data and micro - perception widened. Enterprise profit growth was still in the negative range, and over - capacity in some industries restricted their healthy development [7]. 1.2 "Anti - involution" Policy Introduction - On the 18th, the Ministry of Industry and Information Technology announced a new round of stable growth work plans for ten key industries, including steel, non - ferrous metals, petrochemicals, and building materials, aiming to adjust the structure, optimize supply, and eliminate backward production capacity. Since July, the Nanhua Commodity Index has rebounded, with significant increases in sub - sector indices. This "anti - involution" industrial policy adjustment was different from the 2016 "supply - side reform" and had a more profound impact on the domestic economy and the commodity market [10][11]. 2. Analysis of Industrial "Involution" Characteristics 2.1 Supply Perspective - In terms of industrial added - value, except for the non - metallic mineral products industry in raw material manufacturing, the growth rates of industries such as food manufacturing, electrical machinery, automobile manufacturing, and electronic communication were not low compared to the overall industrial level. However, their capacity utilization rates were at historical lows, indicating a need for policy - driven elimination of over - capacity [16]. - Regarding capacity utilization, the capacity utilization rates of some mid - stream manufacturing and downstream consumption industries were at historical lows. Industries such as food manufacturing, electrical machinery, automobile manufacturing, and non - metallic minerals had capacity utilization rates below the 10th percentile of historical levels, and the electronic communication industry was at the 20th percentile. These industries showed no significant improvement in 2025 [17]. - Some industries with low capacity utilization but relatively high production growth were not all backward production capacity. Industries such as electrical machinery, automobile manufacturing, and electronic communication were closely related to new productive forces. The decline in capacity utilization was due to excessive investment in the short - term, resulting in temporary over - capacity [21]. 2.2 Demand Perspective - China's manufacturing investment growth rate has gone through stages of "high - speed growth - stable operation - continuous decline - intensified fluctuations". The industry has experienced both the expansion stage driven by factors such as the "WTO dividend" and the challenges of reduced profits, capital outflow, and capacity transfer due to intensified trade frictions [22]. - In 2020, the growth rates of manufacturing fixed - asset investment and private manufacturing fixed - asset investment rebounded, mainly due to the accelerated investment in high - tech industries. The profitability of industrial enterprises improved, with 61% of industries seeing profit growth or narrowing declines. However, from 2020 - 2022, most industries declined, and the real estate industry's contribution to GDP turned negative [23][26]. 2.3 Price Perspective - Excessive supply in the short - term could solve the supply - demand contradiction, but when demand declined, profit reduction would be transmitted from downstream to upstream industries, affecting the entire industry. - In 2025, the profit pressure index of industrial enterprises improved. The profit pressure indices of the food and chemical industries improved, while those of the black metallurgy, textile, and paper industries declined. Industries such as general equipment, special equipment, and automobile manufacturing also faced increased cost pressure and thinner profits [31]. 3. Analysis of the Impact of "Anti - involution" on Commodities 3.1 Impact on the Steel Market - The steel industry has over - capacity, but the feasibility of eliminating backward production capacity is low as much of the current capacity has been optimized. - The impact of "anti - involution" on the steel market has different logics. If it is implemented only in downstream industries, it may reduce steel demand; if it is implemented only in the steel industry, it may boost steel prices in the short - term but needs to consider downstream acceptance; if it is implemented simultaneously in the steel and downstream industries, the impact depends on the matching of supply and demand reduction [38][40][41]. - In the short - term, market sentiment is high, and steel demand shows a "not - so - off - season" feature. In the long - term, the implementation and effect of the policy are unclear, and demand support is crucial for price sustainability [42][43]. 3.2 Impact on the "One Glass and Two Alkalis" Market - Glass Market: After a round of supply clearance in the second half of last year, the daily melting capacity of glass in the first half of 2025 was around 158,000 tons. The market was in a weak balance or weak surplus, with relatively high upstream inventories. If the "capacity reduction" policy is implemented and combined with mid - and downstream replenishment, glass prices may have high elasticity. In the short - term, market sentiment is driving price increases [45][51]. - Soda Ash Market: The soda ash market is in a long - term surplus situation, with high upstream and mid - stream inventories. Although the "anti - involution" and capacity - elimination expectations are rising, the impact is limited in the long - term due to new capacity investments and weakening demand. In the short - term, the market is driven by sentiment [52][53]. - Caustic Soda Market: Caustic soda is in a state of strong current reality but weak long - term expectations. The current spot is strong, but new capacity and maintenance restarts may increase supply pressure in the future. The market is waiting for clearer policy guidance [55][56]. 3.3 Impact on the Non - ferrous Metals Market - Mining End: The zinc ore market is expected to be loose in the second half of the year, while the lead market has cost support from tight supply of recycled lead. - Smelting End: Zinc and aluminum have optimized their production capacities. The overall开工率 of refined zinc has been around 90%, and the production capacity of refined zinc in China is estimated to be about 7.3 million tons. The production capacity of lead is increasing, with a significant difference in capacity utilization between primary lead and recycled lead. The electrolytic aluminum industry is in a tight balance, and the alumina industry has over - capacity [58][61][62]. - Overall, the "anti - involution" policy may attract funds and have a greater impact on non - ferrous metal prices. The prices of copper and aluminum may be slightly stronger, and alumina may have its own market due to factors such as tight spot supply and potential soft - squeeze risks [65]. 3.4 Impact on the Olefin Industry Chain - The average operating rate of ethylene and its downstream products has declined significantly in the past decade, and the olefin industry chain needs to eliminate old production capacity. However, the proportion of old devices in the olefin industry chain is not large, and most of them are in large enterprises or profitable coal - chemical enterprises. The actual impact of the "anti - involution" policy on the olefin industry chain is limited, and the current impact on the chemical product market is mainly sentiment - driven [66][67].