Report Summary 1. Investment Rating The report holds a cautiously bearish view on the steel market in August [4]. 2. Core View - In July, the black - series market was dominated by the "anti - involution" theme, but towards the end of the month, market sentiment cooled, and the trading logic may shift to supply - demand fundamentals. The supply is stable due to profit support, while the demand is weak, and it is difficult for exports to maintain strength. Therefore, the market is likely to decline rather than rise [3][4]. - For August, it is advisable to short at high prices, and industrial customers can hedge. Also, one can consider building a long - rebar and short - hot - rolled coil position [4]. 3. Summary by Directory 3.1. Market Review - In July, the market was led by the "anti - involution" theme. After relevant policies were announced, coking coal drove the black - series up. However, at the end of the month, the market回调 due to the lack of incremental stimulus policies and poor PMI performance. In July, the main contract of rebar rose 6.9%, hot - rolled coil rose 8.6%, iron ore rose 8.9%, coke rose 14%, and coking coal rose 26.7% [8]. 3.2. Money and Social Financing - The growth rates of M1 and M2 generally continued to rise, and the M1 - M2 gap kept expanding. In June, RMB loans increased significantly to 2.24 trillion, and the year - on - year difference between social financing and M2 slightly decreased [11]. 3.3. Price Index - In June, CPI was 0.1 with little change, and PPI was - 3.6, down 0.3 from May, indicating a deflationary environment. In July, the manufacturing PMI was 49.3, down 0.4 month - on - month, lower than market expectations [14]. 3.4. Monthly Steel Data - In the first half of 2025, crude steel production decreased by 3% year - on - year. Pig iron production decreased by 0.8%, with a smaller decline than crude steel, suggesting a lower proportion of scrap steel in the converter process. Steel exports increased significantly, with an increase of 4750000 tons in steel exports and 4420000 tons in billet exports [15]. 3.5. Weekly Data of Five Major Steel Products - As of August 1, 2025, the cumulative year - on - year data of production and apparent consumption of the five major steel products were basically in line, indicating a relatively balanced supply - demand situation. Inventories were lower than the same period last year [16][17]. 3.6. Steel Production - Since this year, steel mills have had good profits and high production enthusiasm. Production is expected to remain stable, unlike the significant decline in the same period last year [20]. 3.7. Steel Production Profit - Currently, blast furnace profits are generally good, with a production profit of 200 - 300 yuan/ton for rebar and hot - rolled coil. Electric - arc furnace profits have improved, with valley - electricity operations basically profitable and flat - electricity operations near the break - even point [21]. 3.8. Steel Demand - The demand side is relatively weak. Construction steel transactions have remained at around 100000 tons without improvement. Real estate data shows that future housing construction demand is difficult to improve significantly. Fixed - asset investment growth has slowed down, and infrastructure investment growth has also declined. Although the issuance of special local bonds is expected to accelerate in the third quarter, the impact on physical volume is limited [42][46][55]. 3.9. Steel Export - With the rise of domestic steel prices, the price difference between domestic and foreign markets has narrowed, export profits have decreased significantly, and future exports may be negatively affected [67]. 3.10. Steel Inventory - During the July price increase, the rebar basis changed little and even increased slightly for the October contract. The hot - rolled coil basis continued to decline. The rebar 10 - 1 spread gradually decreased in July, and the hot - rolled coil 10 - 1 spread remained in a contango structure at a low level [82][85][91]. 3.11. Steel Price Spread - The spot spread between rebar and hot - rolled coil has weakened, while the futures spread has reached a relatively high level this year, showing a certain divergence. Considering the unfavorable export situation, one can consider building a long - rebar and short - hot - rolled coil position [4].

Group 1 - The core viewpoint indicates that the cattle inventory has dropped to a ten-year low, leading to a three-year upward cycle in beef prices, while raw milk prices have fallen below cost, triggering capacity reduction. Leading companies like Modern Farming are expected to see a profit turning point by 2025 [1] - The livestock industry is entering a deep adjustment period, where high-quality companies with low costs and strong capital chains will stand out, indicating long-term high-quality development potential [1][2] - The investment opportunities in the pig industry are primarily driven by policy measures aimed at controlling new production capacity, which will accelerate the exit of inefficient and high-cost producers, thereby supporting prices [2] Group 2 - The pig industry has entered a stable development phase characterized by "capacity reduction + strong players," with market share redistribution occurring among existing players as low-efficiency and high-cost production gradually gets eliminated [2] - The criteria for high-quality companies are becoming clearer, focusing on low-cost breeding capabilities and sufficient capital reserves to withstand policy changes or price fluctuations [2] - The China Livestock Breeding Index (930707) includes major companies in the livestock sector, reflecting the overall performance of listed companies involved in livestock feed, pharmaceuticals, and breeding [2][3] Group 3 - As of July 31, 2025, the top ten weighted stocks in the China Livestock Breeding Index account for 64.83% of the index, including companies like Muyuan Foods, Wens Foodstuff, and Haida Group [3]

Group 1 - Approximately 19 steel mills adjusted their construction material ex-factory prices on July 30, with notable increases in rebar prices in East China, including a rise of 50 yuan/ton for Nanjing Steel and 30 yuan/ton for Shandong Steel [1] - The spot price for rebar on July 30 was reported at 3410 yuan/ton for Yonggang in Shanghai, with other brands like HRB400 and Pinggang also showing competitive pricing around 3370-3430 yuan/ton [2] - The futures market closed with the main rebar contract at 3315.00 yuan/ton, reflecting a daily increase of 0.42%, with trading volume reaching 3,510,866 contracts [2] Group 2 - As of July 29, the Shanghai Futures Exchange reported an increase in rebar warehouse receipts to 85,034 tons, up by 594 tons from the previous trading day [3] - In June, China's steel exports totaled 9.678 million tons, marking an 8.5% decrease from the previous month, with an average export price of 687.1 USD/ton, down 1.6% [3] - According to Sanli Futures research, both policy and fundamentals support rebar prices, with expectations of increased demand from infrastructure projects and a shift in supply-demand dynamics due to industry self-discipline [4]

Macro Strategy - The chemical sector has seen continuous catalysts on both supply and demand sides since 2024, with the current "anti-involution" trend enhancing the market outlook, driven by a favorable fundamental environment and potential valuation uplift from emerging industries [1][23] - More than half of the existing convertible bonds in the chemical sector are issued at the peak of the cycle, currently entering or about to enter the redemption period, coinciding with an upward cycle, leading to more proactive debt conversion measures [1][23] - The majority of chemical convertible bonds are small-cap, which, combined with their near-term characteristics, amplifies the asymmetry of returns [1][23] Currency Exchange Rate - The RMB central parity has shown a gradual appreciation trend, with the exchange rate expected to challenge the 7.15 range again, and the spot exchange rate may drop to the 7.10-7.15 range in August [1][25] - The recent strengthening of the RMB is supported by optimistic expectations from US-China trade negotiations and a robust domestic stock market [1][25] Anti-Involution Policy - The "anti-involution" price governance aims to address three main objectives: short-term regulation of price wars, medium-term capacity reduction to promote supply-demand balance, and long-term price recovery, particularly in PPI [2][26] - The previous supply-side reforms led to a 10-month recovery in PPI, and under neutral assumptions, a similar recovery may take 11-12 months, potentially reaching around 1.9% by September next year [2][26] Industry Rotation - The market is expected to remain optimistic in the third quarter, with a focus on sectors that align with upcoming policies and key events, particularly those benefiting from the "anti-involution" strategy [3][5] - Suggested sectors for investment include those with potential short-term demand improvements, such as photovoltaic, coal, and chemical industries, as well as technology sectors with recent catalysts [5][3] Company-Specific Insights - Xidi Microelectronics is positioned as a leading player in the analog chip sector, with a projected revenue growth of 32.10% year-on-year for the first three quarters of 2024, driven by significant contributions from its audio coil motor driver chip product line [11][12] - Minshida reported a 27.91% year-on-year revenue increase in its 2025 mid-year report, with expectations for continued growth in the transformer market driven by demand from sectors like new energy vehicles and wind power [13] - Gaomei's second-quarter performance is expected to turn profitable due to supply-side optimization driven by the "anti-involution" policy, with N-type silicon wafer prices rising to 1.1 yuan per piece [14][15]

1. Report Industry Investment Ratings | Industry | Rating | | --- | --- | | Oils and Fats | Volatile [5] | | Protein Meal | Volatile [5] | | Corn and Starch | Volatile [5] | | Live Pigs | Volatile [6] | | Natural Rubber | Volatile [7] | | Synthetic Rubber | Volatile [11] | | Cotton | Volatile [11] | | Sugar | Volatile [12] | | Pulp | Volatile, Slightly Bullish [14] | | Logs | Volatile, Slightly Bearish [16] | 2. Report's Core View The report analyzes multiple agricultural products, finding that most are in a volatile state. Factors such as policy regulation, supply - demand relationships, and macro - environment impact the market. For instance, the anti - involution policy in the live pig industry affects its supply and demand expectations; the complex supply - demand situation in the oils and fats market leads to market fluctuations [1][5]. 3. Summary by Catalog 3.1 Oils and Fats - **View**: Market sentiment has weakened, and attention should be paid to the effectiveness of lower technical support [5]. - **Logic**: Uncertainty in export demand, good weather in production areas, and various supply - demand factors at home and abroad are in play. For example, the expected increase in US biodiesel demand for soybean oil, the increase in domestic soybean imports and inventory, and the increase in palm oil production season [5]. - **Outlook**: The market is facing a game of multiple factors, and it is expected to be volatile [5]. 3.2 Protein Meal - **View**: As sentiment fades, both types of meal see reduced positions and price drops [5]. - **Logic**: Abundant precipitation and suitable temperature in US soybean production areas are conducive to high yields. Domestically, short - term soybean arrivals increase, while long - term supply may face shortages [5]. - **Outlook**: The market is expected to maintain a pattern of near - term weakness and long - term strength [5]. 3.3 Corn and Starch - **View**: Spot prices are generally stable, waiting for new guidance [5]. - **Logic**: Supply is tightening, but downstream demand is weak. New - season corn production is normal, and imported corn supply is abundant [5][6]. - **Outlook**: Short - term price rebounds may occur, but there is a downward trend after new - crop listing [6]. 3.4 Live Pigs - **View**: Emotional trading has cooled, and the futures price has fallen from its high [1][6]. - **Logic**: In the short - term, the supply is affected by industry guidance and farmer sentiment; in the medium - term, the supply is expected to increase; in the long - term, policies may lead to a supply inflection point. Demand is limited due to hot weather, and inventory pressure exists [1][6]. - **Outlook**: The market is volatile, with a situation of "weak present, strong future." Anti - spread strategies can be considered [6]. 3.5 Natural Rubber - **View**: The commodity market has adjusted sharply, and rubber prices have dropped significantly [7]. - **Logic**: The market decline is mainly due to regulatory impacts on leading varieties. Fundamentally, supply is affected by the rainy season, and demand is relatively stable [7]. - **Outlook**: The market will continue to trade based on the macro - environment, and it is expected to be volatile [7]. 3.6 Synthetic Rubber - **View**: The futures price continues to fluctuate accordingly [11]. - **Logic**: Affected by the overall market macro - environment, the raw material price is volatile, and the supply is relatively tight in the short - term [11]. - **Outlook**: It is expected to maintain a range - bound operation [11]. 3.7 Cotton - **View**: The monthly spread is converging [11]. - **Logic**: Supply is expected to be abundant, demand is in the off - season, and inventory is at a low level. Low inventory supports prices, but the upside is limited in the short - term [11]. - **Outlook**: It is volatile. Low inventory supports prices, but upward resistance increases, and the monthly spread may follow an anti - spread logic [11]. 3.8 Sugar - **View**: Attention should be paid to import conditions [12]. - **Logic**: The global sugar market supply is expected to be abundant. In Brazil, the sugar - making ratio is expected to remain high. In China, imports are increasing, which will put pressure on prices [13]. - **Outlook**: In the long - term, prices are expected to decline; in the short - term, there are short - selling opportunities [13]. 3.9 Pulp - **View**: Anti - involution trading may resume, and attention should be paid to arbitrage hedging during the decline [14]. - **Logic**: The supply of hardwood pulp is excessive, and demand is weak in the short - term but may improve marginally in the future. There is a ceiling on price increases [14]. - **Outlook**: Fluctuations follow the macro - environment, and futures prices are expected to rise with volatility [14]. 3.10 Logs - **View**: Fundamental changes are limited, and it is short - term dominated by macro - expectations [16]. - **Logic**: It follows the "anti - involution" macro - policy. Supply is affected by shipping rhythms, and demand is stable with no obvious peak or off - season [16]. - **Outlook**: It is volatile and slightly bearish in the short - term. Pay attention to changes in effective deliverable quantities of the 09 contract [16][17].

Summary of Glass Industry Conference Call Industry Overview - The glass industry, particularly the float glass segment, is significantly impacted by the downturn in the real estate market, leading to decreased construction demand, high inventory levels, and low profitability [1][2][4] - Average price of white glass in May 2025 was 1,271 RMB, a 25% year-on-year decline, with a slight rebound to 1,240 RMB in July [1][3] Key Points and Arguments Market Conditions - The float glass market is experiencing weak adjustments due to seasonal and cyclical characteristics, with high inventory levels and ongoing pressure on profits [2][4] - The government is enhancing industry self-discipline to combat vicious competition and promote product quality improvement while phasing out outdated production capacity [1][6] Demand and Supply Dynamics - The float glass production capacity is currently at 1.246 billion weight boxes, with approximately 210 lines in operation, reflecting an 8% year-on-year decrease in daily melting capacity [3][21] - High inventory levels are a major market pressure, with float and photovoltaic glass inventory cycles exceeding reasonable levels of 15 to 20 days, leading to intensified market competition and rapid price declines [3][19] Future Expectations - The second half of 2025 is expected to see improvements in both month-on-month and year-on-year performance, particularly from October to December, driven by urban renovation and major engineering projects [7][8] - The government may introduce measures to stabilize growth in the construction sector, which could help reduce inefficient production capacity [8] Photovoltaic Glass Challenges - Photovoltaic glass is facing significant production cut pressures, with a reduction of approximately 9,000 tons in June 2025, and prices currently between 9.5 and 10.5 RMB, well below the average production cost of 13 RMB [1][9] - The industry is experiencing a shift in capacity reduction policies, focusing on dynamic adjustments and structural optimization rather than aggressive shutdowns [11] Regulatory Environment - The government is actively addressing issues of overcapacity and competition through regulatory measures, emphasizing the need for compliance and quality improvement [6][12] - There are challenges in managing illegal production capacities, with various categories of non-compliant operations identified [15] Price Trends and Profitability - Recent price increases in float glass are attributed to severe industry losses and low downstream inventory levels, with different production lines experiencing varying profitability based on fuel costs [20][21] - The overall market is expected to stabilize as inventory levels decrease and demand gradually improves, although the rebound may be limited [21][32] Additional Important Insights - The glass industry has shown cyclical fluctuations, closely tied to real estate market demands, with significant variations in performance year-on-year [24][25] - Technological upgrades in furnace operations have extended lifespans, leading companies to prefer prolonging furnace use rather than immediate shutdowns [26] - Long-term, if demand continues to decline, the industry may require mechanisms similar to those in the cement sector to achieve supply-demand balance [27] This summary encapsulates the key insights from the conference call regarding the current state and future outlook of the glass industry, highlighting the challenges and regulatory measures impacting both float and photovoltaic glass segments.

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Views - **For螺纹**: The demand shows no improvement, inventory is slightly decreasing at a low level, and traders' purchasing willingness remains weak. The downstream real - estate industry is in a downward cycle. With a positive basis, inventory situation and price on the 20 - day line, but a net - short position of the main contract (with short positions decreasing), it is expected to be in a high - level oscillation considering the weak real - estate market, cooling demand and domestic capacity - reduction plans [2]. - **For热卷**: Both supply and demand are weakening, inventory is decreasing, exports are blocked, and domestic policies may play a role. With a positive basis, inventory situation and price on the 20 - day line, but a net - short position of the main contract (with short positions decreasing), it is also expected to be in a high - level oscillation due to the weakening market supply - demand, blocked exports and domestic capacity - reduction plans [6]. 3. Summary by Related Catalogs **螺纹** - **Fundamentals**: Demand is poor, inventory is low and slightly decreasing, and the downstream real - estate industry is in a downward cycle [2]. - **Basis**: The spot price of螺纹 is 3400, and the basis is 152, which is positive [2]. - **Inventory**: The inventory in 35 major cities across the country is 372.97 million tons, increasing month - on - month and decreasing year - on - year, which is positive [2]. - **Disk**: The price is above the 20 - day line, and the 20 - day line is upward, which is positive [2]. - **Main Position**: The main position of螺纹 is net - short, and short positions are decreasing, which is negative [2]. - **Likely Factors**: Low production and inventory, spot premium, and domestic capacity - reduction expectations are positive; the continued downward cycle of the downstream real - estate industry and weak terminal demand are negative [2][3]. **热卷** - **Fundamentals**: Both supply and demand are weakening, inventory is decreasing, and exports are blocked, with domestic policies potentially playing a role, being neutral [6]. - **Basis**: The spot price of热卷 is 3460, and the basis is 63, which is positive [6]. - **Inventory**: The inventory in 33 major cities across the country is 267.16 million tons, increasing month - on - month and decreasing year - on - year, which is positive [6]. - **Disk**: The price is above the 20 - day line, and the 20 - day line is upward, which is positive [6]. - **Main Position**: The main position of热卷 is net - short, and short positions are decreasing, which is negative [6]. - **Likely Factors**: Fair demand, spot premium, and domestic capacity - reduction expectations are positive; the entry of downstream demand into the seasonal off - season and pessimistic expectations are negative [6][7][8].

Core Viewpoint - The article discusses the need to address "involution" in competition within industries, emphasizing that the root cause lies in the extreme unfairness of resource distribution, where 98% of people compete for only 20% of resources, leading to a cycle of inefficiency and pressure to overwork [2]. Group 1: Involution and Its Causes - Involution is driven by an extremely unfair distribution of resources, compelling individuals to work harder to secure a share of wealth [2]. - The total wealth produced is a function of production efficiency and time, with individuals having limited means to increase their wealth other than working longer hours [2]. - Companies face similar pressures, often resorting to lowering prices to capture a larger share of the distribution [2]. Group 2: Government and Policy Responses - The National Development and Reform Commission (NDRC) emphasizes the need for market-driven price mechanisms, suggesting that prices should be determined by market forces wherever possible [9]. - The NDRC's approach includes a systematic view and comprehensive measures to address issues, promoting the efficient flow of high-quality production factors [9]. Group 3: Industry Implications - The article suggests that addressing involution may lead to the elimination of low-quality enterprises while retaining those that meet higher standards, as seen in the charging treasure industry where stricter regulations can lead to the exit of weaker players [4]. - There are concerns that reducing production capacity to combat involution could result in layoffs and salary reductions, as fewer workers may be needed if capacity is decreased [8]. Group 4: Historical Context - The article contrasts the current situation with the supply-side reforms of 2015, which primarily targeted internal issues, while the current context involves both internal and external factors influencing the economy [11]. - The article notes that the execution strength of state-owned enterprises (SOEs) was a significant factor in the 2015 reforms, raising questions about which capacities will be reduced in the current environment dominated by private enterprises [10].

Group 1 - The market is currently experiencing a lack of significant momentum, awaiting direction from the upcoming economic and financial policy meeting at the end of July [2] - Major indices have shown positive performance, with the ChiNext Index rising nearly 1%, but the market is characterized by limited breadth in sector performance, particularly in technology [3] - The "de-capacity" sector, which was previously strong, is facing a pullback, with futures prices for polysilicon and lithium carbonate dropping over 7%, and related stocks in steel and coal also experiencing declines [3]

Report Industry Investment Rating No relevant content provided. Core Views - Overseas: The US and the EU reached an agreement, with the US imposing a 15% import tariff on most EU goods, half of the previously threatened rate, avoiding an escalation of the trade war. The EU promised to invest about $600 billion in the US and significantly increase purchases of US energy and military products. Sino-US high-level meetings will be held in Stockholm on Monday to extend the August 12 tariff "ceasefire" agreement by 90 days. With the tariff paths of many countries becoming clearer, market risk appetite has slightly increased [2]. - Domestic: The current market is in a stage of "strong expectation, weak reality". The positive sentiment brought by supply - side optimization policies is still evolving. A - shares once broke through the 3600 - point mark, and trading volume and margin trading balances increased. In June, the year - on - year decline in industrial enterprise profits narrowed to - 4.3%, mainly driven by the automotive industry. Short - term attention should be paid to market sentiment, policy outcomes, and tariff negotiations [3]. Summary by Directory Overseas Macro - US 7 - month Manufacturing and Services PMI Differentiation: The US 7 - month Markit manufacturing PMI was 49.5, weaker than expected and below the boom - bust line. The services PMI reached a new high this year at 55.2. Tariffs and high prices were reported to suppress demand [5]. - ECB's July Decision: On July 24, the ECB announced a pause in interest rate cuts after eight consecutive cuts, maintaining the main interest rate at 2.00%. The market's expectation of a September rate cut dropped below 30% [7]. Asset Performance - Equity: Most equity indices showed positive performance. For example, the Shanghai Composite Index rose 4.33% last week, and the Hang Seng Index rose 5.47% [9]. - Bond: Yields of domestic and overseas bonds showed different trends. For example, the 1 - year domestic treasury bond yield rose 3.38 BP last week, while the 5 - year US treasury bond yield fell 1.00 BP [12]. - Commodity: The performance of commodities was mixed. The Nanhua Commodity Index rose 2.73% last week, while WTI crude oil fell 1.48% [14]. - Foreign Exchange: The US dollar index fell 0.80% last week, and the euro - to - RMB exchange rate rose 0.73% [16]. High - Frequency Data Tracking - Domestic: High - frequency data such as the congestion index, subway passenger volume, and real - estate transaction volume are presented through charts [18]. - Overseas: Data on red - book retail sales, unemployment claims, and US treasury bond spreads are shown [22]. This Week's Important Economic Data and Events - A series of economic data and events are scheduled this week, including US GDP, employment data, and euro - zone economic sentiment indices [31].