Report Industry Investment Rating - Not provided in the content Core Viewpoints - The lead market shows a situation of increasing supply and demand. The uncertainty of the start - up of secondary lead due to raw material issues provides some support for lead prices, and short - term lead prices are expected to remain range - bound. For zinc, the fundamental situation of SHFE zinc continues to be weak with strong supply and weak demand, and the price is under pressure. Additionally, attention should be paid to the increasing LME 0 - 3 back structure as LME zinc inventories are continuously depleted [1] Summary by Relevant Catalogs Lead Market - **Price and Market Indicators**: The average price of SMM1 lead ingots remained unchanged from the previous day at 17,000 yuan/ton, and the closing price of the SHFE lead main contract also remained unchanged at 17,160 yuan/ton. The trading volume of the active futures contract decreased by 33.36% to 29,011 lots, and the open interest decreased by 20.89% to 26,547 lots. The LME inventory remained unchanged at 244,125 tons, and the SHFE lead warrant inventory decreased by 11.22% to 24,977 tons [1] - **Fundamentals**: There is no expected increase in lead concentrate imports, and processing fees are likely to rise but difficult to fall, which has not had a substantial impact on smelter operations. Some primary lead smelters have maintenance plans, with a slight fluctuation in the start - up rate. For secondary lead, previously shut - down smelters are gradually resuming production, increasing supply. On the demand side, the terminal market has improved, and lead - acid battery enterprises are operating well, with an increase in demand [1] - **Company News**: Boliden reduced its annual planned grinding volume from 1.8 million tons to 1.6 million tons. SMM expects the annual zinc concentrate production to be reduced by about 0.5 - 10,000 metric tons and lead concentrate production to be reduced by about 2,000 metric tons. MMG's zinc mine production in Q3 2025 was 58,700 tons, a year - on - year increase of 26% [1] - **Investment Strategy**: Temporarily hold off on trading and continue to monitor the start - up of upstream and downstream enterprises and changes in macro - sentiment [1] Zinc Market - **Price and Market Indicators**: The average price of SMM1 zinc ingots decreased by 0.18% to 21,830 yuan/ton, while the closing price of the SHFE zinc main contract increased by 0.14% to 22,000 yuan/ton. The trading volume of the active futures contract decreased by 5.76% to 102,274 lots, and the open interest increased by 1.72% to 132,692 lots. The LME inventory remained unchanged at 35,300 tons, and the SHFE zinc warrant inventory decreased by 1.60% to 65,209 tons [1] - **Fundamentals**: Smelters have sufficient raw material inventories, and zinc concentrate processing fees are continuously rising. The domestic zinc concentrate processing fee decreased to 3,400 yuan/metal ton last week, and the import zinc concentrate processing fee index increased to 118.75 dollars/dry ton. The profit and production enthusiasm of smelters have improved, and the monthly production is expected to remain at around 600,000 tons. There is no significant improvement in demand, and the zinc ingot export window is expected to open as the SHFE - LME ratio continues to deteriorate [1] - **Company News**: MMG's zinc mine production in Q3 2025 was 58,700 tons, a year - on - year increase of 26%. Boliden's Odda smelter's refined zinc production decreased compared to the previous quarter, affected by a shortage of intermediate materials, and SMM expects its 2025 actual output to be about 170,000 - 180,000 tons [1] - **Investment Strategy**: Temporarily hold off on trading and be vigilant about overseas structural risks [1]

Core Viewpoint - The current market sentiment is that "liquidity outweighs fundamentals," driven by rising expectations of interest rate cuts by the Federal Reserve, which is expected to inject upward momentum into risk assets [1] Group 1: Market Environment - The current market environment is compared to two historical periods: the mid-1990s when the Federal Reserve's preemptive rate cuts extended the economic expansion and fueled a stock market surge, and the 1970s before the collapse of the Bretton Woods system, characterized by dollar depreciation and weakened trust in U.S. government debt [1] - There is a significant amount of idle capital ready to buy on dips, which is likely to prolong the current market cycle [1] Group 2: Trust in U.S. Debt - A warning is issued regarding foreign central banks' gold reserves surpassing U.S. Treasury holdings for the first time in thirty years, indicating a potential erosion of trust in U.S. government debt [1] - The current cycle may end due to a breakdown in trust, despite the ongoing liquidity-driven market rally [1] Group 3: Structural Risks - While liquidity may continue to drive market enthusiasm, structural risks should not be overlooked [1]

Core Viewpoint - The current market sentiment is characterized by "liquidity over fundamentals," with expectations of interest rate cuts by the Federal Reserve driving idle capital to buy on market dips, thereby extending the economic cycle and boosting risk assets [1] Group 1: Market Environment - The current market environment bears striking similarities to two historical periods: the mid-1990s when the Fed's preemptive rate cuts successfully extended economic expansion and ignited a new stock market rally [1] - A concerning historical warning is emerging, as the continuous depreciation of the dollar against physical assets and the weakening trust in government debt by central banks evoke memories of the collapse of the Bretton Woods system in the 1970s [1] Group 2: Structural Signals - A key structural signal is that for the first time in thirty years, foreign central banks' gold reserves have surpassed their holdings of U.S. Treasury securities, reflecting a growing erosion of trust in U.S. government debt [1] - The potential end of the current cycle may not stem from economic weakness but rather from a complete breakdown of trust, indicating that while liquidity-driven market exuberance may continue, the underlying structural risks cannot be ignored [1]

Group 1 - The A-share index has been on the rise since April 2025, with the Shanghai Composite Index reaching 3605.73 points on July 24, 2023 [1] - Major broad-based indices have shown significant increases, with the North China 50 Index rising by 39.86% and other indices like the CSI 1000 and CSI 500 also experiencing notable gains [1] Group 2 - Huaxia Fund indicates that structural risks are accumulating but no clear turning point has been observed; the market is currently in a main upward trend with strong risk appetite and capital support [2] - Recent meetings have released positive signals for expanding domestic demand and "anti-involution" policies, boosting market sentiment; upcoming policy changes may act as new catalysts for market performance [2] - Long-term views suggest that the trend of asset revaluation in China remains unchanged, supported by global capital rebalancing and accelerated industrial upgrades [2] - Great Wall Fund maintains a cautiously optimistic short-term outlook, suggesting that while the market may still be in an upward trend, defensive positioning is necessary to avoid excessive chasing of highs [2]

Core Viewpoint - The report by Goldman Sachs indicates a significant decline in housing demand in China due to population decrease and urbanization slowdown, predicting a shift towards a "housing for living, not for speculation" model in the real estate market [1][4]. Demand and Supply Dynamics - The annual demand for urban housing in China is expected to drop from an average of 9.4 million units in the 2010s to 4.1 million units between 2025 and 2030, significantly lower than the peak demand of 20 million units in 2017 [1][4]. - The housing unit-to-household ratio has reached 1.16, exceeding the international warning line of 1.1, with a vacancy rate of 12.1%, indicating a severe supply-demand imbalance [5][6]. - The total inventory of commercial housing amounts to 93 trillion yuan, which is 70% of GDP, with a de-stocking cycle exceeding 30 months, suggesting that the demand side is nearing saturation [5][6]. Market Sentiment and Future Outlook - The ongoing decline in housing prices is expected to deter investment interest, with predictions that housing prices may drop by 20%-25% by 2025, further exacerbating market hesitance [9]. - The real estate sector, which contributes approximately 25% to GDP, is likely to face negative effects on investment and consumption due to shrinking demand [9]. - The report suggests that the real estate market will enter an "L-shaped" adjustment period over the next decade, characterized by structural differentiation and a policy-driven weak recovery rather than a complete downturn [12]. Demographic Trends - The population of individuals born in the 1990s is 40 million less than that of the 1980s, and the number of newborns has plummeted by 40% compared to eight years ago, leading to a shrinking pool of first-time homebuyers [5][12]. - The marriage registration numbers have declined for nine consecutive years, contributing to a decrease in "marriage housing" demand and reinforcing the trend towards rental housing [13]. Policy Implications - The report highlights the need for policy adjustments, such as promoting affordable housing and urban renewal, to address the challenges faced by the real estate sector [9][12]. - The shift from a focus on quantity to quality in housing demand is anticipated as urbanization approaches its limits, with a growing preference for smaller and more suitable housing options [12][13].