1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report - Domestic commodities mostly rose first and then fell. Industrial products edged up, while agricultural products showed weak performance. Market risk appetite rebounded due to progress in China - US trade negotiations in the first half of the week, but the market was suppressed by the Fed's hawkish rate cut, the rebound of the US dollar index, and the decline of the domestic stock market in the second half of the week. Precious metals led the decline [3]. - The commodity market will maintain a volatile trend with differentiation among varieties. Current macro - factors at home and abroad are mixed. The easing of China - US economic and trade relations boosts market risk appetite, and the increased economic downward pressure in the domestic fourth quarter opens a window for incremental policy. However, the Fed Chair's hawkish stance and uncertainties in future rate - cut paths, as well as unresolved US government shutdown issues and geopolitical uncertainties, may disrupt the market [3]. 3. Summary According to Relevant Catalogs PART ONE: Main Views - **PMI and Its Influencing Factors** - **Review**: Domestic commodities mostly rose first and then fell. Industrial products slightly increased, and agricultural products were weak. The progress of China - US trade negotiations in the first half of the week drove up most commodities, while the Fed's hawkish rate cut, the rebound of the US dollar index, and the decline of the domestic stock market in the second half of the week led to a weakening of most commodities, with precious metals falling sharply [3]. - **Overseas**: China and the US leaders met in Busan, South Korea, and the two sides reached a joint arrangement on economic and trade issues. The achievements mainly included tariff barrier reduction, relaxation of export controls, slowdown of targeted economic and trade games, and consensus on multi - field cooperation. The US cancelled the 10% fentanyl tariff, and suspended the 24% reciprocal tariff for another year. The Fed cut the federal funds rate target range by 25 basis points to 3.75% - 4.00% in October, but the Fed Chair's stance was hawkish. The European Central Bank and the Bank of Japan kept their policies stable [3]. - **Domestic**: The manufacturing PMI in October declined more than seasonally and remained in the contraction range, indicating continued economic pressure in the fourth quarter. The decline may be related to factors such as the pre - release of some demand before the "National Day" holiday, the escalation of China - US tariffs, and slow policy implementation. In the future, the weakening of the PMI index shows a decline in market expectations and confidence, and policy support is needed. The central bank may continue to ease monetary policy, and the fourth quarter will see the advance release of next year's special bond and debt - resolution quotas [3]. - **Commodity Market Outlook**: The commodity market will maintain a volatile trend with differentiation among varieties due to the mixed macro - factors at home and abroad [3]. PART TWO: Overseas Situation Analysis - **Trade Agreements**: The US has reached trade agreements with many major trading partners, including the UK, Vietnam, Indonesia, etc. Tariffs have been reduced to varying degrees, and there are also non - tariff terms such as procurement commitments and cooperation in various fields. For example, the tariff between the US and China has been reduced from 57.6% to 47.6%, and China will adjust counter - measures and suspend export controls for one year [10]. - **Monetary Policies**: The Fed cut the federal funds rate by 25 basis points in October, but the Fed Chair's stance was hawkish, and the possibility of a December rate cut is uncertain. The European Central Bank maintained the benchmark interest rate at 2% for the third consecutive time, and the Bank of Japan kept the benchmark interest rate at 0.5% for the sixth consecutive time [3]. PART THREE: Domestic Situation Analysis - **PMI Analysis**: The manufacturing PMI in October declined, was weaker than the seasonal level, and remained in the contraction range. The decline in real - estate sales growth and marginal weakening of exports may indicate a steeper economic downward slope. Policy support is needed, but considering the annual "GDP growth of 5%", the policy will be "moderately supportive" and more focused on laying the foundation for next year [3]. PART FOUR: High - Frequency Data Tracking - **Industrial Production**: The operating rates of blast furnaces and the polyester industry chain are presented in the high - frequency data. For example, on October 31, the operating rate of PTA was between 75% - 89% [39]. - **Real Estate and Automobile Sales**: The sales growth rate of 30 - city real estate in October turned negative, and data on automobile sales such as factory wholesale and retail are also provided [41]. - **Agricultural Product Prices**: Data on the average wholesale prices of 28 key - monitored vegetables, pork, fruits, and the 200 - index of agricultural product wholesale prices are shown [48].

Investment Rating - The report maintains an "Overweight" rating for the steel and non-ferrous metals sectors [6] Core Insights - Tungsten concentrate prices have reached a record high since 2012, indicating strong demand and potential investment opportunities in this segment [2][11] - The steel sector is expected to recover to historical profit levels due to government policies aimed at phasing out outdated production capacity [4][22] Summary by Relevant Sections Liquidity - The BCI small and medium enterprise financing environment index for October 2025 is at 52.41, up 10.15% month-on-month [12][18] - M1 and M2 growth rate differences show a positive correlation with the Shanghai Composite Index, with the difference at -1.2 percentage points in September 2025, improving by 1.6 percentage points [12][18] Infrastructure and Real Estate Chain - The steel PMI index for October is at 47.6%, an increase of 2.4 percentage points month-on-month [22][43] - Key commodity prices have shown varied movements, with rebar prices up 0.63% and cement price index up 0.23% [1][22] Industrial Products Chain - The national PMI new orders index for October is at 48.80%, down 0.9 percentage points month-on-month [2] - Major commodity prices include cold-rolled steel unchanged, copper up 1.22%, and aluminum up 0.80% [2] Exports Chain - The new export orders PMI for October is at 45.90%, down 1.9 percentage points month-on-month [4] - The CCFI comprehensive index for container shipping rates is at 1021.39 points, up 2.89% [4] Valuation Metrics - The Shanghai Composite Index decreased by 0.43%, with the shipping sector performing best at +3.95% [4] - The PB ratio for the steel sector relative to the broader market is currently at 0.53, with historical highs reaching 0.82 [4] Investment Recommendations - The report suggests that the steel sector's profitability is likely to recover to historical averages, and the PB ratio for steel stocks is expected to improve accordingly [4][22]

Core Insights - The manufacturing Purchasing Managers' Index (PMI) in China for October is at 49.0%, indicating a decline of 0.8 percentage points from the previous month, reflecting a downturn in manufacturing activity [1][2] - The non-manufacturing business activity index rose to 50.1%, up 0.1 percentage points from last month, indicating expansion in the service sector [1][5] - The comprehensive PMI output index decreased to 50.0%, down 0.6 percentage points from the previous month, suggesting overall stability in production and business operations [1] Manufacturing Sector - The manufacturing PMI has been in contraction for seven consecutive months, matching the longest stretch since August 2015 [2] - Key sub-indices such as production index (49.7%), new orders index (48.8%), and raw material inventory index (47.3%) all fell below the critical point, indicating weakened manufacturing activity [2][3] - The new export orders index dropped by 1.9 percentage points to 45.9%, reflecting reduced demand [3] Price Indices - The main raw material purchase price index and factory price index decreased by 0.7 percentage points to 52.5% and 47.5%, respectively, continuing a downward trend for two months [3][4] - The decline in price indices is attributed to weakened downstream consumer demand and reduced upward pressure from upstream raw material prices [4] Service Sector - The service sector's business activity index increased to 50.2%, indicating a recovery in service sector activity, driven by holiday effects [5] - Industries closely related to consumer travel, such as rail and air transport, showed strong performance with indices above 60.0% [5] Construction Sector - The construction business activity index fell to 49.1%, indicating a decline in activity for three consecutive months, primarily influenced by the real estate sector [6] - Despite the decline, the business activity expectation index rose to 56.0%, suggesting improved market outlook among construction firms [6] Policy Outlook - There are expectations for increased policy support to stabilize market conditions, with potential monetary policy easing on the horizon [7][8] - The anticipated impact of new policy measures, including significant financial tools for investment, may help the construction sector recover [7] Economic Trends - The ongoing demand contraction in the market is leading to an imbalance in the macroeconomic landscape, with supply exceeding demand [7] - Analysts emphasize the need for stronger counter-cyclical economic policies to stimulate demand and support business investment [7]

Core Viewpoint - The weak PMI in October is primarily due to weak demand, with deeper issues stemming from high inventory levels negatively impacting production indices [2][68]. Group 1: Manufacturing PMI Analysis - The manufacturing PMI fell to 49% in October, down 0.8 percentage points from the previous month, indicating a contraction in the manufacturing sector [2][68]. - The production index dropped significantly, falling to 49.7%, which is a decrease of 2.2 percentage points, marking a return to the contraction zone for the first time in six months [2][9]. - New orders index saw a smaller decline of 0.9 percentage points, indicating that while demand is weakening, it is not as severe as the production index [2][9]. Group 2: Causes of Weakness - The significant drop in the production index may be attributed to the retreat of the "rush production" effect, high inventory levels, and the nature of the PMI as a month-on-month indicator [2][14]. - In September, there was a temporary "stock-up rush" phenomenon, which led to a spike in production and inventory levels, but this created constraints for October's production capacity [14][68]. - The new export orders index fell sharply by 1.9 percentage points to 45.9%, the second-lowest point of the year, influenced by fluctuating tariff policies [3][69]. Group 3: Domestic Demand and Investment - Domestic demand remains resilient overall, but the acceleration of debt reduction has weakened investment demand, particularly affecting high-energy-consuming industries and construction [3][23]. - The PMI for high-energy industries dropped to 47.3%, reflecting strong pressure on real estate and infrastructure investment due to debt reduction efforts [3][23]. - The construction PMI also remains low, falling to 49.1%, but recent fiscal policies are expected to alleviate some investment pressures, with the business activity expectation index for construction rising by 3.6 percentage points [3][23]. Group 4: Future Outlook - Despite the recent setbacks in manufacturing sentiment, the short-term disturbances from high inventory levels are expected to dissipate, and proactive fiscal policies are being implemented [4][35]. - The manufacturing sector is anticipated to maintain resilience as external uncertainties ease and new policies are rolled out to support production and demand [4][35]. - Continuous monitoring of the marginal changes in manufacturing sentiment will be essential as the situation evolves [4][70]. Group 5: Non-Manufacturing PMI Insights - The non-manufacturing PMI showed a slight increase to 50.1%, indicating some recovery in the service sector, driven by holiday travel and pre-sales activities [5][51]. - The service sector PMI rose by 0.1 percentage points, with the employment index also improving, suggesting a positive trend in service-related employment [5][55]. - In contrast, the construction sector experienced a slight decline in PMI, although the new orders index saw a significant rebound, increasing by 3.7 percentage points [6][60].

Core Viewpoints - The October PMI shows weakness primarily due to weak demand, with deeper issues stemming from high inventory levels impacting production indices [2][68] - The manufacturing PMI decreased by 0.8 percentage points to 49%, while the non-manufacturing PMI slightly rose to 50.1% [8][67] Group 1: Manufacturing PMI Analysis - The manufacturing PMI's decline is characterized by a more significant drop in the production index compared to new orders, with the production index falling to 49.7%, a decrease of 2.2 percentage points [2][9] - The new orders index saw a smaller decline of 0.9 percentage points, indicating a relatively stable demand compared to production [2][9] - The production index's drop is attributed to the retreat from a "production rush" effect and high inventory levels, which constrained the upward movement in October [14][68] Group 2: Demand Structure and External Factors - The demand structure shows a divergence between domestic and international markets, with new export orders significantly declining by 1.9 percentage points to 45.9%, marking one of the lowest points this year [3][18] - Industries heavily impacted by the drop in new export orders include high-tech and consumer goods, with their respective PMI indices also declining [3][18] - The fluctuation in tariff policies has contributed to the significant drop in new export orders, affecting overall manufacturing performance [3][69] Group 3: Domestic Demand and Investment Trends - Domestic demand remains resilient, but the acceleration of debt reduction has weakened investment demand, particularly in high-energy-consuming industries and construction [23][69] - The construction PMI fell to 49.1%, reflecting ongoing challenges, although recent fiscal policies are expected to alleviate some investment pressures [23][70] - The business activity expectation index for the construction sector has improved, indicating potential recovery in the near future [23][70] Group 4: Service Sector Performance - The service sector PMI showed a slight improvement, rising by 0.1 percentage points to 50.2%, driven by holiday travel and pre-"Double Eleven" promotional activities [51][29] - The employment index within the service sector increased, suggesting a positive trend in labor market conditions [55][51] Group 5: Future Outlook - Despite the current challenges in manufacturing, the high inventory levels and external disturbances are expected to ease, supported by proactive fiscal policies [4][35] - The overall manufacturing sector is anticipated to maintain resilience in the long term, with ongoing monitoring of marginal changes in manufacturing conditions [4][70]

Group 1: PMI Analysis - The manufacturing PMI for October 2025 is 49.0%, a decrease of 0.8 percentage points from the previous month, indicating a decline in manufacturing activity[1] - The production index fell to 49.7% from 51.9%, and the new orders index dropped to 48.8% from 49.7%[3] - Manufacturing PMI has contracted for seven consecutive months, matching the longest record since August 2015[2] Group 2: Demand and Inventory Insights - New export orders decreased significantly to 45.9% from 47.8%, impacted by new export regulations[3] - The inventory of finished goods decreased only 0.1 percentage points to 48.1%, indicating a high impact of insufficient demand[5] - The purchasing index fell sharply by 2.6 percentage points to 49%, ending two months of expansion[5] Group 3: Price Trends - The output price index declined by 0.7 percentage points to 47.5%, while the raw material purchase price index decreased to 52.5%[4] - The CRB price index increased by 1.55% year-on-year, showing resilience in raw material prices despite the decline in output prices[4] Group 4: Sector Performance - The service sector PMI rose slightly to 50.2%, supported by holiday activities, while the construction index fell to 49.1%[6] - Large enterprises' index decreased to 49.9%, while small enterprises dropped to 47.1%, reflecting a disparity in performance across company sizes[6]

Core Insights - The PMI index for October indicates that high-tech manufacturing, equipment manufacturing, and consumer goods industries continue to expand, significantly above the overall manufacturing level, reflecting sustained industry support and overall optimistic market expectations [1][4]. Group 1: Key Industry Performance - The PMI for high-tech manufacturing, equipment manufacturing, and consumer goods industries are reported at 50.5%, 50.2%, and 50.1% respectively, indicating continued expansion [4]. - The production and business activity expectation index stands at 52.8%, suggesting a positive outlook for market activities [4]. Group 2: Non-Manufacturing Sector - The non-manufacturing business activity index has slightly rebounded to 50.1%, an increase of 0.1 percentage points from the previous month, entering the expansion zone [9]. - The service industry business activity index is reported at 50.2%, also reflecting a 0.1 percentage point increase from last month, continuing its expansion [9].

Core Viewpoint - The PMI index for October indicates that high-tech manufacturing, equipment manufacturing, and consumer goods industries continue to expand, significantly above the overall manufacturing level, reflecting sustained industry support and overall optimistic market expectations [1][3][5]. Group 1: PMI Data - The PMI for high-tech manufacturing, equipment manufacturing, and consumer goods industries are 50.5%, 50.2%, and 50.1% respectively, indicating continued expansion [5]. - The production and business activity expectation index stands at 52.8%, suggesting a positive outlook for market activities [5]. Group 2: Non-Manufacturing Sector - The non-manufacturing business activity index is at 50.1%, an increase of 0.1 percentage points from the previous month, indicating a return to the expansion zone [10]. - The service industry business activity index is at 50.2%, also up by 0.1 percentage points from last month, continuing its expansion [10].

Group 1 - The core viewpoint of the article indicates that the PMI index for October shows that high-tech manufacturing, equipment manufacturing, and consumer goods industries continue to be in the expansion zone, significantly above the overall manufacturing level, reflecting a sustained supportive role of these industries and an overall optimistic market expectation [1][5]. - The production and business activity expectation index is reported at 52.8%, indicating a positive outlook for future activities [5]. - The non-manufacturing business activity index has slightly rebounded to 50.1%, an increase of 0.1 percentage points from the previous month, indicating a return to the expansion zone [10]. Group 2 - The service industry business activity index stands at 50.2%, also reflecting a 0.1 percentage point increase from the previous month, continuing its expansion [10]. - The comprehensive PMI output index is positioned at the critical point, suggesting a balanced outlook across sectors [11].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report The report comprehensively analyzes the market conditions, important information, logical analysis, and trading strategies of L plastic and PP polypropylene from September 19 to October 29, 2025. It provides investment suggestions based on various factors such as price trends, supply and demand, and macro - economic indicators. Summary by Related Catalogs Market Conditions - **L Plastic**: Prices showed partial fluctuations, with some regions experiencing price increases or decreases. Futures prices also fluctuated, affecting market sentiment and trading volume. For example, on October 29, L2601 closed at 6984 points, down 1 point or - 0.01% [1]. - **PP Polypropylene**: Market prices were mostly in a state of weak adjustment. Futures prices affected the spot market, and downstream demand was generally cautious. For instance, on October 29, PP2601 closed at 6664 points, up 7 points or + 0.11% [1]. Important Information - **Industry Policies**: The seven - department issued the "Petrochemical and Chemical Industry Steady Growth Work Plan (2025 - 2026)", aiming for an average annual increase of over 5% in industry added value and promoting high - end, green, and intelligent transformation [8][53]. - **Macroeconomic Data**: In the first three quarters, China's industrial production grew rapidly, and enterprise efficiency improved. Some industries and products achieved growth, and the export of industrial products accelerated [4]. - **International Events**: The US government shutdown led to a lack of official data, increasing the difficulty of decision - making for central banks in other countries [30]. Logical Analysis - **Supply - related Factors**: Factors such as production capacity utilization, net imports, and registered warehouse receipts affected the market. For example, as of August, the labor employment rate and resignation rate in the plastic products industry in Taiwan Province both increased, with the difference showing a narrowing increase, which was negative for polyolefin single - side trading [5]. - **Demand - related Factors**: Downstream demand, including the demand in the automotive, construction, and other industries, influenced the market. For example, the growth of the global plastic additive consumption was related to the output growth of plastic end - consumption fields [47]. - **Macroeconomic Indicators**: Macroeconomic indicators such as the EuroCoin index, PMI, and real estate data had an impact on the polyolefin market. For example, in September, the EuroCoin index strengthened for six consecutive months, which was positive for polyolefin single - side trading [5]. Trading Strategies - **Single - side Trading**: Strategies included holding long or short positions, or taking a wait - and - see approach. For example, on October 29, it was recommended to reduce long positions in L and PP [1]. - **Arbitrage Trading**: Most of the time, a wait - and - see approach was recommended. For example, on October 29, it was suggested to wait and see for arbitrage trading [2]. - **Options Trading**: Some contracts were recommended for selling or holding, with stop - loss settings. For example, on October 29, it was recommended to sell and hold the L2601 put 6800 contract and set a stop - loss at the recent high of 34.5 points [2].