Core Viewpoint - The Hong Kong government welcomes the approval of three warehouses in Yuen Long by the London Metal Exchange (LME) as recognized warehouses, enhancing Hong Kong's position as a key hub for international metal trading [1] Group 1: Government and Regulatory Actions - The Financial Secretary of the Hong Kong Special Administrative Region, Xu Zhengyu, expressed support for the LME's expansion of storage facilities in Hong Kong, aligning with the Chief Executive's 2025 policy direction [1] - The total number of recognized warehouses by the LME in Hong Kong has increased to 11, including the three newly approved warehouses [1] Group 2: Industry Impact - The addition of the three warehouses will provide efficient delivery options for participants in international metal trading, contributing to the development of Hong Kong's shipping and other related services [1] - The LME included Hong Kong in its global warehouse network as a licensed delivery point in January of this year, allowing warehouse operators to apply for licenses to store metals registered with the LME [1]

Group 1 - The Hong Kong government welcomes the approval of three warehouses in Yuen Long by the London Metal Exchange (LME) as recognized warehouses [1][2][3] - The expansion of LME's storage facilities in Hong Kong aligns with the policy direction outlined in the Chief Executive's 2025 Policy Address, enhancing Hong Kong's position as an international financial, shipping, and trading hub [2] - With the addition of these three warehouses, the total number of recognized warehouses operated by LME in Hong Kong has increased to eleven, facilitating efficient delivery options for international metal trading [2]

Core Viewpoint - The establishment of the "Commodity Strategy Committee" by the Hong Kong government marks a significant shift towards a government-led approach in developing the commodity trading ecosystem, enhancing Hong Kong's role as an international financial center and supporting China's broader economic strategies [2][3]. Group 1: Establishment of the Commodity Strategy Committee - The committee will be led by the Financial Secretary and aims to strengthen the top-level design and long-term strategy formulation for commodity policies [1]. - This initiative signifies a transition from a market-driven approach to one that is coordinated by government leadership, indicating a commitment to elevate the importance of commodity trading alongside stock and bond markets [2][3]. Group 2: Development of the Commodity Trading Ecosystem - The Hong Kong government plans to continue developing the commodity trading ecosystem, including supporting the establishment of more recognized warehouses and providing tax incentives for commodity traders [1]. - The committee's focus on long-term strategy development suggests a shift towards creating a sustainable 10 to 20-year development blueprint, aiming to compete with established markets like Singapore and Chicago [3]. Group 3: Strategic Importance and Future Outlook - The initiative is expected to enhance China's pricing power in the global commodity market and align with the national "Belt and Road" initiative [2]. - As the committee operates and the network of recognized warehouses expands, Hong Kong is poised to become a key hub connecting domestic and international markets, facilitating the implementation of the national dual circulation strategy [4].

Group 1 - The Hong Kong government will establish a "Commodity Strategy Committee" led by the Financial Secretary to enhance the top-level design and long-term strategy formulation for commodity policies [1] - The government aims to develop a commodity trading ecosystem in Hong Kong, including supporting the establishment of more recognized warehouses and providing tax incentives for commodity traders [1] - The initiative is expected to strengthen Hong Kong's position as an international financial, shipping, and trading center, integrating existing advantages and creating new economic growth points [1] Group 2 - Guangdong Province and Guangzhou have expressed support for cross-border cooperation between the Guangzhou Futures Exchange and the Hong Kong Stock Exchange [2] - The collaboration is seen as a practical measure to enhance the influence of Hong Kong's capital market and promote the integration of financial resources in the Guangdong-Hong Kong-Macao Greater Bay Area [2] - Strengthening cooperation between the two exchanges is crucial for the development of the Greater Bay Area and will facilitate efficient allocation of production factors [2]

Capital Market Initiatives - Hong Kong will assist mainland tech companies in financing and explore shortening the stock settlement cycle to T+1 [1][2] - The government aims to optimize the main board listing and structured product issuance mechanisms, and promote more overseas companies to list in Hong Kong [2] - The Hong Kong Monetary Authority and the Securities and Futures Commission will encourage more companies to issue bonds in Hong Kong, enhancing the bond market's global participation [2] Wealth Management and Investment - Hong Kong is expected to become the largest cross-border wealth management center globally, with the number of accounts for wealth products increasing from 25,000 to 110,000 [3] - The government will optimize tax incentives for funds and family offices to attract more investment [3] - The introduction of a new capital investor entry plan will allow for increased investment thresholds in non-residential properties [7] AI and Technology Development - The government will promote AI development across various sectors while ensuring safety and efficiency [4] - A funding program of HKD 3 billion will support local institutions in attracting international research talent in AI [4] - A leading European aviation service company is set to establish operations in Hong Kong, creating new jobs and enhancing trade and financing sectors [4] Healthcare and Clinical Trials - Hong Kong will attract pharmaceutical companies for clinical trials of rare disease drugs and advanced therapies [5] - The establishment of an "International Clinical Trial Academy" is planned to cultivate talent in the Greater Bay Area [5] - A new regulatory center for drugs and medical devices will be set up to enhance Hong Kong's status as a recognized authority [5] Cross-Border Trade and Logistics - The government is expanding logistics capabilities to facilitate goods transport from mainland provinces to international markets [6] - Multi-modal transport options are being developed to enhance efficiency in cargo movement [6] Commodity Trading and Financial Innovation - A "Commodity Strategy Committee" will be established to enhance policy design for commodity trading [9] - The government will support the establishment of more recognized warehouses for commodity trading and provide tax incentives [9] - Financial innovations will be tested to optimize international commodity trading processes [9] Gold Market Development - The government aims to establish a regional gold reserve hub with a target of exceeding 2,000 tons in three years [10] - Initiatives will be taken to enhance gold refining capabilities and establish a central clearing system for gold transactions [10] - The Shanghai Gold Exchange will collaborate with Hong Kong to promote market cooperation [11]

Core Viewpoint - The Hong Kong government is establishing a "Commodity Strategy Committee" to enhance the top-level design and long-term strategy formulation for commodity policies [1] Group 1: Government Initiatives - The committee will be led by the Financial Secretary and will gather industry representatives to strengthen commodity policy [1] - Hong Kong will continue to promote the development of a commodity trading ecosystem, following the direction set in last year's policy report [1] Group 2: Infrastructure and Support - The London Metal Exchange, a wholly-owned subsidiary of the Hong Kong Stock Exchange, has approved eight delivery warehouses in Hong Kong, with plans to support the establishment of more recognized warehouses [1] - The government will provide half-tax incentives for commodity traders to set up in Hong Kong, which is expected to boost demand for shipping and professional maritime services [1] Group 3: Financial Innovation - Financial innovations will be utilized to optimize international commodity trading processes, including a collaboration between the Hong Kong Monetary Authority and the Central Bank of Brazil to test electronic bills of lading and deposit tokenization [1] - There will be a deepening of connections with the Guangzhou Futures Exchange and other domestic commodity markets to support the internationalization of the national commodity market [1]

Group 1: Market Overview - The Hang Seng Index has faced pressure, dropping 284 points or 1.12% to close at 25058, marking a three-day decline totaling 558 points or 2.2% [3] - The index opened high at 25489, briefly rising to a mid-day high of 25494 before reversing direction and falling below the 20-day moving average [3] - The total market turnover for the day was 3022.33 million [3] Group 2: Company News - BYD has reportedly lowered its annual sales target by 16% to 4.6 million vehicles, indicating the slowest sales growth in nearly five years [11][12] - The revised sales target is below recent forecasts from several institutions, with Deutsche Bank estimating 4.7 million and Morningstar predicting 4.8 million [12] - Yum China plans to repurchase approximately 270 million USD of its common stock by the end of 2025, building on previous repurchase agreements [13]

Core Insights - Hong Kong is actively seeking new breakthroughs in the international financial system amidst changing global geopolitical dynamics, focusing on strengthening market ecology, promoting financial innovation, and integrating with the real economy [1][2][3] Group 1: Gold as a Strategic Asset - Gold is recognized globally as a safe-haven asset with dual attributes of a physical commodity and a financial investment, aligning well with Hong Kong's positioning as an international financial center [1][2] - The Chief Executive's 2024 Policy Address highlights the establishment of a commodity trading ecosystem centered around gold, aiming to expand the storage and delivery of physical gold in Hong Kong [1][2] Group 2: Market Demand and Growth Potential - Global demand for gold is expected to rise, with a projected 45% year-on-year increase in total gold demand by value, reaching $132 billion by Q2 2025 [3] - The demand for gold ETFs has remained strong for two consecutive quarters, with investment in gold bars and coins reaching the highest level since 2013 [3] Group 3: Infrastructure and Development Initiatives - The Hong Kong International Airport has increased its precious metal storage capacity by one-third to 200 metric tons, with plans to expand to 1,000 metric tons to support gold trading and logistics [4] - The Shanghai Gold Exchange will launch its international board designated warehouse in Hong Kong by June 2025, marking a significant step in internationalizing the gold market [4] Group 4: Strategic Positioning and Future Outlook - The growth potential of the gold market is becoming increasingly evident, with central banks adding 166 tons to their official gold reserves in Q2 2025, indicating a continued preference for gold as a stable asset [5] - Hong Kong aims to build a diversified and internationally connected ecosystem for gold trading, enhancing its role in the global economic landscape [6]

1. Report Industry Investment Rating - Copper: Neutral [7] - Arbitrage: Suspended [7] - Options: short put@77000 yuan/ton, short call@80000 yuan/ton [7] 2. Core View of the Report - The processing fee has rebounded, but the relative shortage of mine resources is difficult to change temporarily. Consumption is also hard to show excellent performance, but with relatively stable power grid orders, it won't collapse significantly. So, the overall price is expected to be in a volatile pattern. The future development of the Putin-Biden meeting needs attention. If the situation continues to improve, the LME may accept Russian copper again, which may put pressure on the LME copper price. Also, the relatively strong performance of the domestic equity market may siphon off commodity funds [7]. 3. Summary by Relevant Catalogs Market News and Important Data Futures Quotes - On August 21, 2025, the main contract of Shanghai copper opened at 78,560 yuan/ton and closed at 78,540 yuan/ton, a -0.13% decrease from the previous trading day's closing. The night session opened at 78,580 yuan/ton and closed at 78,710 yuan/ton, a 0.25% increase from the afternoon closing [1]. Spot Situation - SMM 1 electrolytic copper spot quoted a premium of 100 - 220 yuan/ton to the current 2509 contract, with an average of 160 yuan/ton, a 30 yuan/ton decrease from the previous day. The spot price range was 78,710 - 78,890 yuan/ton. The market's procurement and sales sentiment slightly recovered. Due to the concentrated arrival of imported and domestic copper sources, holders actively sold, leading to a general decline in premiums. It is expected that domestic copper will continue to arrive at the warehouse, and low - priced imported sources will suppress premiums, but downstream procurement may provide support near the weekend, so the downward space for spot premiums is limited [2]. Important Information Summary - **Macroeconomic Data**: The preliminary value of the US S&P Global Manufacturing PMI in August reached 53.3, the highest since May 2022, far exceeding the expected 49.5; the Services PMI slightly declined to 55.4, but the significant increase in manufacturing pushed the Composite PMI to a 9 - month high of 55.4 [3]. - **Employment Market**: The number of initial jobless claims in the US last week increased by 11,000 to 235,000, the highest since June, higher than the market expectation of 225,000; the number of continued jobless claims in the previous week rose to 1.97 million, the highest since November 2021 [3]. - **Monetary Policy**: Cleveland Fed President Harmaque said she would not support a rate cut at the September meeting if Fed officials were to make a policy decision tomorrow. The CME Fedwatch tool shows that the market bets a 75% probability of a 25BP rate cut in September and a 25% probability of keeping it unchanged [3]. Mine End - Blue Moon Metals obtained at least $140 million in financing to support the early construction of its Nussir copper project in Norway. The project is expected to cost $330 million to build, with a mine life of 25 years, an average annual output of 25,000 tons of copper concentrate, and associated silver and gold. The cash cost is only $1.38 per pound of copper, ranking in the low - cost quartile of the industry, and it aims to start production in September 2027 [4]. - Codelco will lower its 2025 production guidance after an accident at its flagship mine El Teniente reduced production by 33,000 tons. The expected output of El Teniente this year is 316,000 tons, and the production decline will cause a loss of $340 million [4]. Smelting and Import - The LME Hong Kong delivery warehouse was inaugurated on the 19th. Hong Kong's participation in the LME's delivery network is an important step in building a commodity trading ecosystem. China's refined copper (electrolytic copper) output in July 2025 was 1.27 million tons, a 14% year - on - year increase. In August, the number of smelters reducing production due to copper concentrate and cold material supply shortages increased compared to July [5]. Consumption - In July, China's copper industry monthly prosperity index was 41.8, up 0.9 points from June, continuing to operate in the "normal" range; the leading index was 79.7, up 0.1 points from June; the coincident index was 73.8, down 0.9 points from June. In July 2025, China's copper foil export volume was 4,483.51 tons, a 13.32% year - on - year increase and a 3.23% month - on - month increase [6]. Inventory and Warehouse Receipts - LME warehouse receipts changed by 1,200.00 tons to 156,350 tons. SHFE warehouse receipts changed by - 66 tons to 25,157 tons. On August 18, the domestic spot inventory of electrolytic copper was 131,700 tons, a - 2,000 - ton change from the previous week [6].

Core Viewpoint - The establishment of the London Metal Exchange (LME) delivery warehouses in Hong Kong marks a significant step in enhancing Hong Kong's role in the global commodities trading ecosystem, particularly in response to the growing demand for metals driven by the development of new energy and high-tech industries [1][2]. Group 1: Market Opportunities - The global demand for metals is expected to continue rising due to the booming new energy and high-tech industries, presenting substantial market opportunities [1]. - The integration of Hong Kong into the LME delivery network is seen as a crucial move to strengthen its position as an international financial and shipping center [1][2]. Group 2: Logistics and Infrastructure - The collaboration between China Resources Logistics and GKE Metal Logistics aims to provide comprehensive services for bulk metal trading, including warehousing, storage, and cross-border transportation [3]. - The successful completion of the first batch of LME deliveries, including copper, nickel, and tin, is expected to reduce delivery times and optimize logistics costs for market participants [3]. Group 3: Economic Integration - The Hong Kong government emphasizes the importance of integrating commodity economics with financial services, such as insurance and financing, to enrich the overall commodities trading ecosystem [2]. - The establishment of the LME warehouses is anticipated to attract more enterprises to participate in Hong Kong's commodities industry chain, thereby enhancing its market construction [2].