Liquidity - SPDR Gold ETF holdings decreased week-on-week [4] - BCI small and medium enterprise financing environment index for February 2026 is 48.66, down 3.20% month-on-month [4] - M1 and M2 growth rate difference in February 2026 is -3.1 percentage points, up 1.0 percentage points month-on-month [4] - Current London gold spot price is $5018 per ounce [4] Infrastructure and Real Estate Chain - Blast furnace capacity utilization rate for January-February is at the highest level in five years [5] - Price changes this week: rebar +2.84%, cement price index -0.27%, rubber +3.89%, coke +0.00%, coking coal +0.22%, iron ore +3.67% [5] - National blast furnace capacity utilization rate, cement, and asphalt operating rates changed by +0.03 percentage points, +0.32 percentage points, and -6.5 percentage points respectively [5] Real Estate Completion Chain - Titanium dioxide and glass prices are at low levels [6] - This week, titanium dioxide and glass prices increased by 0.75% and 0.37% respectively, with titanium dioxide gross profit at -1901 yuan/ton and flat glass operating rate at 70.81% [6] Industrial Products Chain - National PMI new orders index for February is 48.60% [7] - Major commodity price performance this week: cold-rolled +0.87%, copper -0.57%, aluminum +2.83%, with corresponding gross profit changes of -70.77%, +19.53%, and +7.51% [7] - National semi-steel tire operating rate is 77.71%, up 3.68 percentage points month-on-month [7] Subcategories - Orientation silicon steel price increased for the first time since October 12, 2024 [8] - Graphite electrode price for ultra-high power is 19000 yuan/ton, unchanged, with a comprehensive gross profit of 1653.64 yuan/ton, down 6.45% [8] - Electrolytic aluminum price is 25100 yuan/ton, up 2.83%, with estimated profit at 7728 yuan/ton (excluding tax), up 7.51% [8] - Electrolytic copper price is 100630 yuan/ton, down 0.57% [8] - Tungsten concentrate price is 1050000 yuan/ton, up 14.25% from last week [8] Price Comparison - Hot-rolled and rebar price difference is at the lowest level in five years [9] - Rebar and iron ore price ratio this week is 4.02 [10] - Price difference between hot-rolled and rebar steel is 50 yuan/ton this week [10] - Price difference between Shanghai cold-rolled steel and hot-rolled steel is 390 yuan/ton, up 120 yuan/ton month-on-month [10] - Price ratio of stainless steel hot-rolled to electrolytic nickel is 0.10 [10] - Price difference between small rebar (mainly used in real estate) and large rebar (mainly used in infrastructure) is 150 yuan/ton this week, down 6.25% from last week [10] - Price difference between medium-thick plate and rebar steel is 100 yuan/ton this week [10] Export Chain - February PMI new export orders for China is 45.00%, down 2.8 percentage points month-on-month [11] - China export container freight index CCFI composite index this week is 1072.16 points, up 1.70% [11] - US crude steel capacity utilization rate is 77.40%, down 0.90 percentage points month-on-month [11] - Announcement No. 79 jointly issued by the Ministry of Commerce and the General Administration of Customs on December 12, 2026, will implement export license management for certain steel products starting January 1, 2026, aiming to further regulate China's steel product exports [11] Valuation Percentiles - This week, the CSI 300 index increased by 0.19%, with the best-performing cyclical sector being coal mining (+5.13%) [12] - The PB ratio of ordinary steel and industrial metals relative to the PB ratio of the Shanghai and Shenzhen markets are 38.60% and 75.51% respectively [12] - The current PB ratio of the ordinary steel sector relative to the Shanghai and Shenzhen markets is 0.53, with the highest value since 2013 being 0.82 (reached in August 2017) [12]

Investment Rating - The report maintains a rating of "Overweight" for the steel and non-ferrous metals sectors [5] Core Insights - The aluminum price increased by 4.5% to 24,410 CNY per ton, while tungsten price rose by 15.1% to 919,000 CNY per ton [2][9] - The liquidity indicators show a decrease in SPDR Gold ETF holdings, with the current value at 1,073.32 tons, down 2.54% week-on-week [10] - The construction and real estate sectors are experiencing high furnace capacity utilization rates, reaching the highest level in five years for January-February [19] Summary by Relevant Sections Liquidity - The BCI small and medium enterprise financing environment index for February 2026 is 48.66, down 3.20% month-on-month [10] - M1 and M2 growth rate difference was -4.1 percentage points in January 2026, with a month-on-month increase of 0.6 percentage points [15] Infrastructure and Real Estate Chain - The national furnace capacity utilization rate increased by 0.96 percentage points week-on-week, with cement and asphalt operating rates also rising [19] - The price changes for major commodities include rebar at -0.94% and cement price index at -0.35% [19] Real Estate Completion Chain - Titanium dioxide and glass prices are at low levels, with titanium dioxide price at 13,400 CNY per ton, up 0.75% week-on-week, and flat glass price at 1,171 CNY per ton, up 1.31% [78] Industrial Products Chain - The national PMI new orders index for February is 48.60% [2] - The price of electrolytic aluminum is 24,410 CNY per ton, with a calculated profit of 7,188 CNY per ton, up 14.72% [9] Valuation Metrics - The Shanghai Composite Index decreased by 1.07%, while the best-performing sector was oil and petrochemicals, up 8.06% [4] - The PB ratio for the steel sector relative to the Shanghai Composite is currently at 0.54, the highest since 2013 [4]

Investment Rating - The steel and non-ferrous metals sector is rated as "Overweight" (Maintain) [5] Core Insights - The steel sector is experiencing a seasonal rally, with high-frequency data indicating a potential recovery in profitability towards historical average levels due to tightening export policies and supply-side adjustments [4][19] - The liquidity indicators show a significant increase in SPDR Gold ETF holdings, reaching a five-year high, which may influence market sentiment [10][15] - The construction and real estate sectors are showing signs of improvement, with high furnace capacity utilization rates expected to be at the highest level for the same period in five years [19][40] Summary by Relevant Sections Liquidity - SPDR Gold ETF holdings reached 1101.33 tons, up 2.09% week-on-week [10] - The total liabilities of the Federal Reserve are at $6.57 trillion, reflecting a 0.01% increase [10] - The M1 and M2 growth rate difference was -4.1 percentage points in January 2026, with a month-on-month increase of 0.6 percentage points [15] Infrastructure and Real Estate Chain - The national high furnace capacity utilization rate is at 87.45%, up 1.04 percentage points week-on-week [40] - The price of rebar is at 3200 CNY/ton, down 0.31% week-on-week, with a production of 1.6723 million tons [40] - The national cement price index decreased by 0.08%, while the cement operating rate increased by 13.5 percentage points [59] Industrial Products Chain - The national PMI new orders index for January was 49.20% [2] - The price of tungsten concentrate has surpassed 800,000 CNY/ton, reflecting a 15.27% increase week-on-week [2] - The price of electrolytic aluminum is at 23,350 CNY/ton, with a profit margin of 6,266 CNY/ton [2] Price Relationships - The price difference between hot-rolled and rebar is at 50 CNY/ton, indicating a stable market condition [3] - The price ratio of rebar to iron ore is 4.13, suggesting a competitive pricing environment [3] - The price of stainless steel hot-rolled and electrolytic nickel is at a ratio of 0.09, indicating market dynamics [3] Export Chain - The new export orders PMI for January was 47.80%, down 1.2 percentage points [3] - The CCFI composite index for container shipping rates is at 1044.57 points, down 4.00% [3] - The U.S. crude steel capacity utilization rate is at 78.50%, up 0.70 percentage points [3] Valuation Metrics - The CSI 300 index increased by 1.08%, with the best-performing sector being the general steel sector, which rose by 12.27% [4] - The PB ratio of the general steel sector relative to the CSI 300 is currently at 0.55, with historical highs reaching 0.82 [4] - The comprehensive gross profit of the steel industry is at 136 CNY/ton, reflecting a 5.9% decrease week-on-week [9]

Core Viewpoint - The article discusses the current trends in various sectors, including liquidity, infrastructure, real estate, industrial products, and export chains, highlighting price changes, production rates, and economic indicators that may impact investment opportunities and risks in these areas [4][5][6][7][11][12]. Liquidity - SPDR Gold ETF holdings saw a slight increase during the Spring Festival period [4] - The BCI small and medium enterprise financing environment index for February 2026 is at 48.66, a month-on-month decrease of 3.20% [4] - The M1 and M2 growth rate difference was -4.1 percentage points in January 2026, with a month-on-month increase of 0.6 percentage points [4] - The current price of London gold is $5042 per ounce [4] Infrastructure and Real Estate Chain - The capacity utilization rate of blast furnaces in January-February is expected to be at the highest level for the same period in five years [5] - Weekly price changes include rebar at +0.00%, cement price index at -0.73%, rubber at +3.14%, coke at +0.00%, coking coal at -0.43%, and iron ore at -1.04% [5] - National blast furnace capacity utilization rate, cement, and asphalt operating rates saw month-on-month changes of -0.16 percentage points, +0.00 percentage points, and -1.3 percentage points, respectively [5] Real Estate Completion Chain - Prices of titanium dioxide and glass are at low levels, with titanium dioxide prices unchanged and glass prices up by 1.14% [6] - The gross profit for titanium dioxide is -1880 yuan per ton, while the flat glass operating rate is at 73.89% [6] Industrial Products Chain - The national PMI new orders index for January is at 49.20% [7] - Major commodity price changes include cold-rolled steel at -0.26%, copper at +0.34%, and aluminum at -0.04%, with corresponding gross profit changes of +23.95%, -9.93%, and -0.15% [7] - The operating rate for semi-steel tires is at 59.44%, a month-on-month decrease of 13.32 percentage points [7] Subcategories - The price of oriented silicon steel has reached the lowest level since 2018 [8] - The price of graphite electrodes is 19000 yuan per ton, unchanged, with a gross profit of 1946.84 yuan per ton, up by 0.14% [8] - The price of electrolytic aluminum is 23100 yuan per ton, down by 0.04%, with a calculated profit of 6063 yuan per ton (excluding tax), down by 0.15% [8] - The price of electrolytic copper is 100440 yuan per ton, up by 0.34% [8] - The price of tungsten concentrate is 697500 yuan per ton, up by 1.90% [8] Price Comparison Relationships - The price ratio of hot-rolled to rebar is at the lowest level for the same period in five years [9] - The price ratio of rebar to iron ore is 4.10 this week [10] - The price difference between hot-rolled and rebar steel is 50 yuan per ton [10] - The price difference between Shanghai cold-rolled and hot-rolled steel is 300 yuan per ton, down by 70 yuan per ton [10] - The price ratio of stainless steel hot-rolled to electrolytic nickel is 0.09 [10] - The price difference between small rebar (mainly used in real estate) and large rebar (mainly used in infrastructure) is 180 yuan per ton, unchanged from last week [10] - The price difference between medium-thick plates and rebar is 30 yuan per ton [10] Export Chain - The new export orders PMI for China in January is at 47.80%, a month-on-month decrease of 1.2 percentage points [11] - The China Containerized Freight Index (CCFI) composite index is at 1088.14 points, down by 3.03% [11] - The capacity utilization rate for crude steel in the U.S. is at 77.80%, up by 0.70 percentage points [11] - The Ministry of Commerce and the General Administration of Customs announced the implementation of export licensing management for certain steel products starting January 1, 2026, which is expected to further regulate China's steel product exports [11] Valuation Percentiles - The Shanghai and Shenzhen 300 index increased by 0.36%, with the best-performing cyclical sector being commercial vehicles at +3.59% [12] - The PB ratio of ordinary steel and industrial metals relative to the PB ratio of the Shanghai and Shenzhen markets is currently at 57.60% and 82.79%, respectively [12] - The PB ratio of the ordinary steel sector relative to the Shanghai and Shenzhen markets is currently at 0.50, with the highest value since 2013 being 0.82, reached in August 2017 [12]

Summary of Key Points Core Viewpoint - The article discusses the current economic indicators and trends in various sectors, highlighting the liquidity situation, construction and real estate chains, industrial products, pricing dynamics, and export conditions, with a focus on potential investment opportunities and market movements. Group 1: Liquidity - The BCI small and medium enterprise financing environment index for January 2026 is at 50.27, an increase of 6.62% month-on-month [3] - The M1 and M2 growth rate difference was -4.7 percentage points in December 2025, a decrease of 1.60 percentage points month-on-month [3] - The current price of London gold is $4,981 per ounce [3] Group 2: Infrastructure and Real Estate Chain - The capacity utilization rate of blast furnaces is expected to be at the highest level for January in five years [4] - Weekly price changes include rebar down 1.81%, cement price index down 0.87%, rubber down 0.32%, coke unchanged, coking coal up 1.07%, and iron ore down 2.92% [4] - National blast furnace capacity utilization rate increased by 0.36 percentage points, while cement and asphalt operating rates decreased by 4.30 percentage points and increased by 3.7 percentage points, respectively [4] Group 3: Real Estate Completion Chain - The prices of titanium dioxide and glass are at low levels, with titanium dioxide price increasing by 0.76% and glass price decreasing by 0.73% [5] - The gross profit for titanium dioxide is -1,740 yuan per ton, while the flat glass operating rate is 73.89% [5] Group 4: Industrial Products Chain - Major commodity price changes include cold-rolled steel down 1.55%, copper down 0.71%, and aluminum up 0.54%, with corresponding gross profit changes showing a turnaround to profit for cold-rolled steel and an increase in losses for copper and aluminum [6] - The national semi-steel tire operating rate is at 74.56%, an increase of 1.12 percentage points [6] Group 5: Specific Products - The price of oriented silicon steel has reached a new low since 2018 [7] - The price of graphite electrodes is 19,000 yuan per ton, unchanged, with a gross profit of 2,001.58 yuan per ton [7] - The price of electrolytic aluminum is 24,130 yuan per ton, with a profit of 6,911 yuan per ton (excluding tax), an increase of 1.83% [7] Group 6: Price Comparison Relationships - The price ratio of London spot gold to silver has reached the lowest level since 2013 [8] - The price ratio of rebar to iron ore is 4.01, and the price difference between hot-rolled and rebar steel is 70 yuan per ton [8] - The price difference between small rebar (mainly used in real estate) and large rebar (mainly used in infrastructure) is 150 yuan per ton, a decrease of 25% from the previous week [8] Group 7: Export Chain - The new export orders PMI for China in December is 49.00%, an increase of 1.4 percentage points month-on-month [9] - The CCFI comprehensive index for container shipping rates is 1,208.75 points, a decrease of 0.09% [9] - The U.S. crude steel capacity utilization rate is 75.90%, an increase of 0.20 percentage points [9] Group 8: Valuation Percentiles - The CSI 300 index decreased by 0.62%, with the best-performing cyclical sector being oil and petrochemicals, which increased by 7.71% [10] - The PB ratio of ordinary steel and industrial metals relative to the PB of the Shanghai and Shenzhen markets is 34.11% and 100.00%, respectively [10] - The current PB ratio of the ordinary steel sector relative to the Shanghai and Shenzhen markets is 0.51, with the highest value since 2013 being 0.82 [10]

Investment Rating - The report maintains a rating of "Overweight" for the steel and non-ferrous metals sectors [5] Core Insights - The report highlights that the price of oriented silicon steel has reached its lowest level since 2018, indicating potential market challenges [2] - The liquidity indicators show that gold prices have reached a historical high, with the London gold spot price at $4,981 per ounce, reflecting strong demand [11] - The report suggests that the steel sector's supply may be reasonably constrained in the medium to long term, which could lead to a recovery in profitability to historical average levels [4] Summary by Relevant Sections Liquidity - The BCI small and medium enterprise financing environment index for January 2026 is at 50.27, up 6.62% month-on-month [11] - The M1 and M2 growth rate difference was -4.7 percentage points in December 2025, down 1.60 percentage points month-on-month [11] - The current London gold price is $4,981 per ounce, reflecting an 8.31% increase from the previous week [11] Infrastructure and Real Estate Chain - The blast furnace capacity utilization rate in January is expected to be at its highest level for the same period in five years [20] - The national blast furnace capacity utilization rate is 85.51%, up 0.03 percentage points week-on-week [39] - The report notes that the prices of titanium dioxide and glass are at low levels, with titanium dioxide priced at 13,300 yuan per ton, up 0.76% week-on-week [76] Industrial Products Chain - The operating rate of semi-steel tires is at 74.56%, up 1.12 percentage points [2] - The report indicates that the price of electrolytic aluminum is 24,130 yuan per ton, reflecting a 0.54% increase [2] - The price of tungsten concentrate is 543,000 yuan per ton, up 6.37% from the previous week [2] Valuation Metrics - The Shanghai Composite Index decreased by 0.62%, while the best-performing sector was oil and petrochemicals, which increased by 7.71% [4] - The PB ratio of the steel sector relative to the Shanghai and Shenzhen markets is currently at 0.51, with a historical high of 0.82 [4] Export Chain - The new export orders PMI for China in December was 49.00%, up 1.4 percentage points month-on-month [3] - The CCFI composite index for container shipping rates is at 1,208.75 points, down 0.09% [3] - The U.S. crude steel capacity utilization rate is 75.90%, up 0.20 percentage points [3]

Liquidity - The negative difference in the growth rates of M1 and M2 has expanded for three consecutive months, reaching -4.7 percentage points in December 2025 [3] - The BCI small and medium enterprise financing environment index for December 2025 is 47.15, a month-on-month decrease of 10.19% [3] - The correlation between the M1 and M2 growth rate difference and the Shanghai Composite Index is strong, with the difference in December 2025 being -4.7 percentage points, a month-on-month decrease of 1.60% [3] Infrastructure and Real Estate Chain - In early January, the average daily crude steel output of key steel enterprises rebounded to levels seen in mid-October 2025 [3] - Price changes this week include rebar up by 1.22%, cement price index down by 0.94%, rubber down by 1.26%, coke unchanged, coking coal up by 1.23%, and iron ore down by 0.12% [3] - National blast furnace capacity utilization rate, cement, and asphalt operating rates changed by +0.04 percentage points, -1.92 percentage points, and +3.7 percentage points respectively [3] Real Estate Completion Chain - Prices of titanium dioxide and glass are at low levels, with titanium dioxide price unchanged and glass price down by 0.73% [4] - The gross profit for titanium dioxide is -1707 yuan/ton, while the flat glass operating rate is 73.89% this week [4] Industrial Products Chain - The operating rate of semi-steel tires is at the median level for the past five years, with a current rate of 73.44%, an increase of 7.55 percentage points [5] - Major commodity price changes this week include cold-rolled steel unchanged, copper up by 1.19%, and aluminum down by 0.25% [5] - Copper spot prices have reached a historical high, while tungsten concentrate prices have continued to reach new highs since 2012 [5] Price Comparison Relationships - The gold-silver price ratio in London has reached its lowest level since 2013 [6] - The price ratio of rebar to iron ore is 3.99 this week, with the price difference between hot-rolled and rebar steel at 30 yuan/ton [6] - The price difference between small rebar (mainly used in real estate) and large rebar (mainly used in infrastructure) reached 200 yuan/ton, an increase of 31.03% from last week [6] Export Chain - In December, China's PMI new export orders stood at 49.00%, an increase of 1.4 percentage points month-on-month [7] - The China Containerized Freight Index (CCFI) composite index this week is 1209.85 points, up by 1.25% [7] - The Ministry of Commerce and the General Administration of Customs announced that starting January 1, 2026, export licensing management will be implemented for certain steel products, which is expected to further regulate China's steel product exports [7] Valuation Percentiles - The CSI 300 Index decreased by 0.57% this week, with the best-performing cyclical sector being industrial metals, which increased by 2.81% [8] - The PB ratio of ordinary steel and industrial metals relative to the PB ratio of the Shanghai and Shenzhen markets is 28.96% and 100.00% respectively [8] - The current PB ratio of the ordinary steel sector relative to the Shanghai and Shenzhen markets is 0.50, with the highest value since 2013 being 0.82, reached in August 2017 [8]

Summary of Key Points Core Viewpoint - The report highlights the current economic indicators and trends affecting various sectors, particularly focusing on financing conditions, construction, real estate, and industrial products, indicating a mixed outlook for the economy in December 2025. Group 1: Liquidity - The BCI small and medium enterprise financing environment index for December 2025 is at 47.15, a decrease of 10.19% month-on-month [4] - The M1 and M2 growth rate difference in November 2025 is -3.1 percentage points, down by 1.1 percentage points from the previous month [4] - The current price of London gold is $4,333 per ounce [4] Group 2: Infrastructure and Real Estate Chain - The national steel PMI new orders index for December decreased by 3.5 percentage points to 45.4% [5] - Weekly price changes include rebar up by 1.22%, cement price index down by 0.06%, rubber up by 0.33%, and iron ore up by 1.77% [5] - National blast furnace capacity utilization rate, cement, and asphalt operating rates changed by -0.39 percentage points, +12.41 percentage points, and -2.4 percentage points respectively [5] Group 3: Real Estate Completion Chain - Prices for titanium dioxide and glass are at low levels, with titanium dioxide price unchanged and flat glass down by 1.09% [6] - The gross profit for titanium dioxide is -1,744 yuan per ton, while the flat glass operating rate is at 73.89% [6] Group 4: Industrial Products Chain - The national PMI new orders index for December stands at 50.80% [7] - Major commodity price changes include cold-rolled steel down by 0.26%, copper down by 0.32%, and aluminum up by 0.50% [7] - The operating rate for semi-steel tires is at 69.35%, down by 2.70 percentage points [7] Group 5: Subcategories - The price of graphite electrodes is at 19,000 yuan per ton, unchanged, with a gross profit of 2,094.1 yuan per ton, up by 1.63% [8] - The price of electrolytic aluminum is 22,170 yuan per ton, up by 0.50%, with a calculated profit of 5,015 yuan per ton (excluding tax), up by 1.98% [8] - The price of tungsten concentrate is 454,500 yuan per ton, down by 1.30% from the previous week [8] Group 6: Price Comparison Relationships - The price ratio of rebar to iron ore is 4.04 this week [10] - The price difference between hot-rolled and rebar steel is -30 yuan per ton [10] - The price difference between small rebar (mainly used in real estate) and large rebar (mainly used in infrastructure) is 300 yuan per ton, up by 50% from last week [10] Group 7: Export Chain - The new export orders PMI for China in December is 49.00%, an increase of 1.4 percentage points [11] - The CCFI comprehensive index for container shipping rates is 1,146.67 points, up by 1.95% [11] - The Ministry of Commerce and the General Administration of Customs announced that from January 1, 2026, certain steel products will be subject to export license management, which is expected to further regulate steel exports [11] Group 8: Valuation Percentiles - The CSI 300 index decreased by 0.59%, with the best-performing cyclical sector being oil and gas, up by 3.92% [12] - The PB ratio of ordinary steel and industrial metals relative to the PB of the two markets is 31.57% and 100.00% respectively [12] - The current PB ratio of the ordinary steel sector relative to the two markets is 0.51, with the highest value since 2013 being 0.82 [12]

Investment Rating - The report maintains an "Overweight" rating for the steel and non-ferrous metals sectors [6] Core Viewpoints - The report highlights a significant decline in the price of oriented silicon steel, with a year-to-date drop of 23% [3] - The financing environment for small and medium enterprises improved in October 2025, with the BCI index rising by 10.15% to 52.41 [11] - The construction and real estate sectors are facing challenges, with new construction area down 19.80% year-on-year from January to October 2025 [22] - The steel sector's profitability is expected to recover to historical average levels, supported by government policies aimed at phasing out outdated production capacity [4] Summary by Sections Liquidity - The BCI index for small and medium enterprises in October 2025 is 52.41, up 10.15% month-on-month [11] - The M1 and M2 growth rate difference was -2.0 percentage points in October 2025, down 0.80 percentage points from the previous month [19] - The current price of London gold is $4082 per ounce, reflecting a 2.05% increase from the previous week [11] Infrastructure and Real Estate Chain - The cumulative year-on-year new construction area in the real estate sector from January to October 2025 is down 19.80% [22] - The price changes for key materials include rebar down 0.94% and cement price index down 0.76% [2] - The cumulative year-on-year completion area for commercial housing from January to October 2025 is down 16.90% [78] Industrial Products Chain - The operating rate for semi-steel tires is at a five-year high, with a current rate of 73.68%, up 0.01 percentage points [2] - Major commodity price changes include cold-rolled steel down 1.00%, copper up 1.11%, and aluminum up 1.44% [2] Export Chain - The PMI new export orders for China in October 2025 is 45.90%, down 1.9 percentage points [4] - The CCFI composite index for container shipping rates is 1094.03 points, up 3.39% [4] Valuation Metrics - The report notes that the PB ratio for the steel sector relative to the broader market is currently at 0.56, with the highest historical value being 0.82 [4] - The report suggests that the profitability of the steel sector is likely to recover, which could lead to an improvement in the PB ratio [4]

Investment Rating - The report maintains an "Overweight" rating for the steel and non-ferrous metals sectors [6] Core Insights - In May 2025, the electrolytic aluminum capacity utilization rate reached a record high since 2012 [3] - The report highlights a positive correlation between the M1 and M2 growth rate differential and the Shanghai Composite Index [21] - The steel sector's profitability is expected to recover to historical average levels due to recent policy adjustments [5] Summary by Sections Liquidity - The M1 and M2 growth rate differential in May 2025 was -5.6 percentage points, with a month-on-month increase of 1.1 percentage points [12][21] - The BCI small and medium enterprise financing environment index for June 2025 was 49.12, up 0.07% from the previous month [21] Infrastructure and Real Estate Chain - In late June, the average daily crude steel production of key enterprises decreased by 0.88% [24] - The national average capacity utilization rate for blast furnaces was 90.29%, down 0.54 percentage points [42] - The average price of rebar was 3180 CNY/ton, with a week-on-week increase of 2.91% [42] Industrial Products Chain - The PMI new orders index for June was 50.20%, an increase of 0.4 percentage points month-on-month [2] - The average price of electrolytic aluminum was 20750 CNY/ton, down 0.91% from the previous week [11] Export Chain - The PMI new export orders for China in June 2025 was 47.70%, up 0.2 percentage points [4] - The CCFI comprehensive index for container shipping rates was 1342.99 points, down 1.92% [4] Valuation Metrics - The CSI 300 index increased by 1.54%, with the best-performing sector being ordinary steel, which rose by 6.52% [4] - The PB ratio of ordinary steel and industrial metals relative to the CSI 300 PB ratio was 37.44% and 69.40%, respectively [4] Investment Recommendations - The report suggests that the steel sector's profitability is likely to recover to historical average levels following the recent revisions to the "Steel Industry Normative Conditions" [5]