1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Viewpoints of the Report - The global trade situation is stabilizing as the US reaches trade agreements with major economies, leading to a high - risk appetite in the market, a stronger US dollar index, record - high US stocks, and price adjustments in various commodities [2][4]. - In China, the introduction of a parenting subsidy system is expected to boost rural birth rates and consumption. Market sentiment has shifted after the exchange introduced risk - control measures, and prices are back to being driven by fundamentals. There is a need to be vigilant about short - term market adjustments and to focus on economic data and trade negotiation progress [3]. - Different commodities are affected by various factors such as trade policies, supply - demand relationships, and market sentiment, resulting in different price trends and outlooks [4][6][8]. 3. Summary by Related Catalogs 3.1 Macro - Overseas: Trump plans to impose tariffs on drugs and keep global tariffs at 15 - 20%. The US and China are negotiating to extend the tariff and export - control truce for 90 days. Many countries are seeking tariff concessions from the US. The US is increasing pressure on Russia, causing oil prices to rise by over 2% [2]. - Domestic: The central government has introduced a parenting subsidy system, with each child receiving 3600 yuan per year until the age of 3. Market sentiment has changed after the exchange's risk - control measures, and the stock market is experiencing a volume - shrinking shock. There is a need to be cautious about short - term market adjustments and focus on economic data and trade negotiation progress [3]. 3.2 Precious Metals - International precious - metal futures prices continued to decline on Monday. The US has reached trade agreements with Japan, the EU, and China, and the US - EU new trade agreement has alleviated trade - war concerns. The market expects the Fed to keep interest rates unchanged this week but anticipates a possible rate cut in September. Short - term precious - metal prices are expected to be weak, but the downside is limited [4][5]. 3.3 Copper - On Monday, the main contract of Shanghai copper slightly declined, and the London copper faced resistance at the 10,000 - dollar mark. The market expects that Chile may get a copper - tariff exemption from the US, causing a significant drop in US copper prices. First Quantum's copper production in the second quarter decreased year - on - year. The copper price is expected to adjust in the short term, and attention should be paid to the China - US trade talks [6][7]. 3.4 Aluminum - On Monday, the main contract of Shanghai aluminum declined, and the London aluminum was flat. The US - EU trade agreement boosted the US dollar index, and the aluminum social inventory increased. The aluminum price is expected to fluctuate and adjust, and inventory trends should be monitored [8]. 3.5 Alumina - On Monday, the main contract of alumina futures decreased significantly. The market sentiment continued to decline, and the futures contract saw a large - scale reduction in positions. The supply is stable recently, and the consumption side is cautious. Alumina is expected to be in a stalemate and fluctuate at a high level [9]. 3.6 Zinc - On Monday, the main contract of Shanghai zinc was weak. The market's optimistic sentiment cooled down, and the fundamentals remained weak. High prices inhibited downstream purchases, and inventories increased. The zinc price is expected to adjust in the short term, and attention should be paid to trade talks and domestic policies [10]. 3.7 Lead - On Monday, the main contract of Shanghai lead fluctuated weakly. The supply of lead is increasing marginally, but the consumption improvement in the peak season is insufficient, and inventories have slightly increased. The lead price is under pressure but supported by costs, and it is expected to fluctuate weakly [11]. 3.8 Tin - On Monday, the main contract of Shanghai tin was weak. The market's optimistic sentiment cooled down, and the consumption in the off - season was poor. The supply increased while the demand was weak, and inventories increased for two consecutive weeks. The tin price is expected to adjust at a high level, but the adjustment space is relatively limited [13]. 3.9 Industrial Silicon - On Monday, the main contract of industrial silicon declined significantly. The supply is in a contraction trend, and the demand is weak overall. The futures price is expected to adjust in the short term to seek lower support [14][15]. 3.10 Carbonate Lithium - On Monday, the carbonate - lithium futures price was weak, while the spot price rose significantly. The market is affected by anti - involution policies, and the short - term price is mainly driven by sentiment, showing a wide - range oscillation [16][17]. 3.11 Nickel - On Monday, the nickel price fluctuated. The tariff risk is cooling down, but the domestic anti - involution policy is still uncertain. The terminal market is weak, and the nickel price is expected to fluctuate in the short term, and domestic policies need to be monitored [18]. 3.12 Crude Oil - On Monday, crude oil fluctuated weakly during the day and opened higher at night. The acceleration of sanctions against Russia and the improvement of the macro - sentiment are pushing up oil prices. The oil price is expected to fluctuate strongly in the short term [19]. 3.13 Steel (Screw and Coil) - On Monday, steel futures fluctuated. Spot trading declined, and the fundamentals are in a weak balance. The futures price is expected to maintain a fluctuating trend [20][21]. 3.14 Iron Ore - On Monday, iron - ore futures fluctuated at a high level. Overseas shipments increased, and arrivals decreased. The demand remains resilient, and the market is in a weak balance. The iron - ore price is expected to fluctuate [22]. 3.15 Bean and Rapeseed Meal - On Monday, bean and rapeseed meal futures declined. The good growth conditions of US soybeans, Argentina's reduction of soybean export tax rates, and the increase in domestic bean - meal inventories are factors affecting the market. The domestic bean - meal price is expected to fluctuate widely in the short term [23][24]. 3.16 Palm Oil - On Monday, palm - oil futures rose, while soybean and rapeseed oil futures declined. The production of Malaysian palm oil increased in July, and the export demand decreased. The palm - oil price is expected to fluctuate in the short term [25][26][27]

Core Viewpoint - Nissan Motor Company is planning to close seven factories globally as part of its restructuring efforts, with two factories in Mexico being considered for shutdown due to declining sales and the need to address overcapacity [1] Group 1: Company Actions - The two factories in Mexico under consideration for closure include Nissan's first overseas factory established in 1966 and a joint venture factory with Mercedes-Benz [1] - The decision to close these factories is driven by Nissan's poor sales performance, making it urgent to resolve overcapacity issues [1] Group 2: Industry Context - The closures reflect broader challenges within the automotive industry, where companies are increasingly focusing on efficiency and cost-cutting measures in response to market pressures [1]

Group 1 - The credit bond market is expected to experience strong fluctuations in August due to multiple factors, including the upcoming Politburo meeting and the end of the temporary period for "reciprocal tariffs" between China and the US on August 14, which may affect market sentiment [1][11] - The overall trend of credit bonds is likely to remain stable in the short term, with limited downward potential, as the central bank's supportive stance continues to provide backing for the bond market [1][11] - After recent adjustments, credit bond spreads are still compressing, and institutional investors are expected to gradually enter the market, driven by the current "asset shortage" environment [1][11] Group 2 - The supply of credit bonds is not expected to increase significantly, with the growth of sci-tech bonds potentially offsetting the reduction in local government bonds, but overall net supply is likely to remain constrained [2][14] - The weighted coupon rate of sci-tech bonds is below 2%, indicating a scarcity of high-yield assets, which maintains a strong demand for credit bonds in the market [2][14] - The investment value of credit bonds has improved after a significant adjustment, particularly for mid-to-high-grade short- to medium-term credit varieties, which are now yielding above 10% historical levels [19][20] Group 3 - Manufacturing, new infrastructure, and consumption are expected to be key areas of policy focus in the second half of the year, with various measures likely to be introduced to support these sectors [22][23] - The macroeconomic data for the first half of 2025 shows a resilient economy, with GDP growth of 5.3% and industrial output growth of 6.4%, indicating a stable economic environment for credit bonds [22][23] - The government is likely to implement more policies to regulate the competitive order in the new energy vehicle industry, which may improve cash flow for upstream suppliers [24][29]

Core Viewpoint - JinDan Technology (300829.SZ) is a leading player in the domestic lactic acid industry, having established a comprehensive "corn-lactic acid-lactide-polylactic acid" industrial chain, particularly focusing on biodegradable materials like polylactic acid, which is seen as a potential blue ocean market [3][5]. Group 1: Company Overview - JinDan Technology has an annual production capacity of 183,000 tons for lactic acid and its derivatives, making it the leader in the domestic lactic acid sector [6]. - The company is currently expanding its lactic acid production capacity by an additional 50,000 tons, with an investment of 313 million, expected to be 75% completed by the end of 2024 [7]. - JinDan is located in a major corn-producing area in China and is extending its operations into upstream corn cultivation, planning to contract over 17,000 acres for high-starch corn cultivation in 2024 [8]. Group 2: Downstream Expansion - The company is extending its operations downstream into lactide, polylactic acid, and modified materials, which is a key strategic direction for JinDan [9]. - In 2024, JinDan has projects under construction that include a 10,000-ton lactide and a 75,000-ton polylactic acid biodegradable materials project [10]. - Additionally, JinDan has a project for producing 60,000 tons of biodegradable polyester and its products, with a budget of 466 million, expected to be completed by the end of 2024 [11]. Group 3: Industry Challenges - The lactic acid industry is currently characterized as a red ocean, with significant competition and pressure on prices, leading to a decline in revenue and profitability for JinDan [12][14]. - In 2023, the global lactic acid industry had a total capacity of 1.193 million tons, but the market is facing oversupply, resulting in a drop in JinDan's gross margin to 18.9%, the lowest on record [14]. - JinDan's net profit for 2023 was 85 million, a year-on-year decline of 35.54%, with projections for 2024 indicating a further drop to 37 million [15]. Group 4: Market Dynamics - The polylactic acid industry is experiencing rapid capacity expansion, with China's production capacity expected to reach 300,000 tons in 2024 and over 1 million tons by 2025, while consumption is only projected at 120,000 tons [19]. - The competitive landscape is intensifying, with many companies planning significant capacity expansions, leading to concerns about future oversupply [19][20]. - JinDan's projects have faced delays, with the 75,000-ton polylactic acid project now expected to be completed in June 2026, reflecting broader industry challenges [23].

Report Summary 1. Report Industry Investment Rating The document does not mention the industry investment rating. 2. Core Viewpoints - The low - inflation environment is the foundation of the bond bull market. The recent rise in commodity prices and equity market fluctuations have made investors worry about the change in the bond market trend. However, the long - term trend of the bond market may not have changed, and adjustments bring opportunities [2]. - The "anti - involution" policy is a structural reform. Although it aims to address over - capacity and boost inflation in the long run, the current implementation may have short - term negative impacts on the economy and may not be conducive to the sustainable recovery of inflation [2]. - The recent fluctuations in the bond market are mainly due to the "anti - involution" policy, the rise in commodity prices, and short - term disturbances in the capital market such as the freezing of funds for new share subscriptions on the Beijing Stock Exchange. The central bank is likely to maintain a relatively loose liquidity environment in the short term [3]. 3. Summary by Directory 3.1. Demand - Driven Investment Policies Cannot Change the Low - Inflation State - In Q2 2025, China's GDP growth rate was 5.2%, and the cumulative growth rate in the first half of the year reached 5.3%. However, due to the decline in inflation, the nominal GDP growth rate in Q2 dropped to 3.9%, a new low since the pandemic. This may be the reason for the "anti - involution" policy [6]. - Since 2018, China's core CPI has been in a downward trend, especially after 2021, remaining below 1%, which may be affected by the decline of the real estate market. Overseas experience shows that low - inflation environments in major developed economies are usually triggered by demand - side shocks [11]. - China's real estate and urban investment platforms absorbed a large amount of financial resources before 2021. After the real estate market declined, these sectors faced debt risks. The policies to address these risks have limited short - term impact on demand [16]. - In the demand side, measures such as development - oriented policy financial instruments in 2022 and additional treasury bond issuance in 2023 aimed at major project construction. However, they could not fully offset the impact of the decline in urban investment financing on infrastructure investment. Manufacturing investment has become a new driver of stable growth, but it has also led to over - capacity and low inflation [21]. 3.2. The Intention and Alienation of the "Anti - Involution" Policy - The low - inflation state in China is closely related to over - capacity in the manufacturing industry, which is the background for the "anti - involution" policy. The capital expenditure growth rate of manufacturing listed companies has been declining, and the over - capacity may be due to local government intervention [25]. - The Sixth Meeting of the Central Financial and Economic Affairs Commission on July 1, 2025, can be regarded as the top - level plan for "anti - involution", aiming to address over - capacity by constraining local government behavior. However, the current implementation focuses on short - term inflation through measures like production restrictions and price alliances, which may not lead to sustainable inflation recovery [27]. - Different from the 2015 supply - side reform, the current over - capacity is mainly concentrated in the mid - and downstream sectors, and it is more difficult to clear through administrative orders. Without demand - side support, the price increase caused by production restrictions may be short - term [29]. 3.3. Inflation Priority Increase Does Not Justify Central Bank Tightening; Capital Market Fluctuations Are Affected by Short - Term Factors - The recent tightening of the capital market and the central bank's OMO net withdrawal have made investors worry about the change in monetary policy. However, considering the policy goal of boosting inflation, the central bank has no reason to tighten in the short term [33]. - The freezing of funds for new share subscriptions on the Beijing Stock Exchange has affected the capital market. For example, the 6288 billion yuan frozen for the online issuance of Dingjia Precision on July 22 has caused fluctuations in the capital market. After the funds were unfrozen on July 24, large - scale transfers may have reduced banks' willingness to lend, but the central bank's net withdrawal has increased market concerns [37]. - The central bank is likely to maintain a relatively loose liquidity environment, and the short - term fluctuations in DR001 are expected to return to the 1.3% - 1.4% range [42]. 3.4. Short - Term Focus on Overshoot Rebound; Medium - Term Wait for Further Clarity of Macroeconomic Data - The long - term trend of the bond market may not have changed, and the short - term bond market may rebound. However, the bond market structure is still fragile after the rebound, and there is a possibility of a second shock [45]. - Currently, trading can be carried out with a volatile mindset. Short - term participation in market rebounds is possible, but profit - taking can be considered when the 10 - year bond yield falls below 1.7%. The greater opportunity in the bond market may come from the falsification of the inflation - boosting expectation of the "anti - involution" policy, which may require a decline in Q3 economic data or the disappointment of incremental policies after the Politburo meeting [46].

Report Industry Investment Ratings No investment ratings were provided in the report. Core Viewpoints The report offers daily insights and trend analyses for various commodities, including precious metals, base metals, energy products, agricultural products, etc. It assesses each commodity's price trends, supported by fundamental data and macro - industry news, and gives a trend strength rating for each commodity [2][4]. Summary by Commodity Categories Precious Metals - Gold is expected to oscillate downward, with a trend strength of - 1 [2][7][8]. - Silver is predicted to break through and rise, with a trend strength of 0 [2][7][8]. Base Metals - Copper: Domestic inventory reduction restricts price decline, with a trend strength of 0 [2][10][12]. - Zinc: High - level oscillation, with a trend strength of - 1 [2][13][15]. - Lead: Lacks driving force, price oscillates, with a trend strength of 0 [2][16][17]. - Tin: Prices are disturbed by floods in Wa State, with a trend strength of - 1 [2][19][22]. - Aluminum: High - level oscillation; Alumina has intense long - short game; Casting aluminum alloy follows electrolytic aluminum. Aluminum trend strength is 0, Alumina is - 1, and Aluminum alloy is 0 [2][24][26]. - Nickel: Macro expectations determine the direction, fundamentals limit elasticity, with a trend strength of 0; Stainless steel is dominated by macro sentiment, and the real - world situation needs repair, with a trend strength of 0 [2][27][31]. Energy and Chemicals - Carbonate Lithium: Commodity prices fell on Friday night, pay attention to the spread of pessimistic sentiment, with a trend strength of - 1 [2][32][34]. - Industrial Silicon: Sentiment declines, pay attention to the risk of sharp decline, with a trend strength of - 1; Polysilicon: Sentiment declines, with a trend strength of - 1 [2][35][37]. - Iron Ore: Supported by macro expectations, strong - biased oscillation, with a trend strength of 0 [2][38]. - Rebar and Hot - Rolled Coil: Resonance in sector market, strong - biased oscillation, with a trend strength of 1 for both [2][40][42]. - Ferrosilicon: Disturbed by energy consumption and carbon emission information, strong - biased trend, with a trend strength of 1; Silicomanganese: Disturbed by industry's cut - throat competition information, strong - biased trend, with a trend strength of 1 [2][45][47]. - Coke and Coking Coal: Emotions are realized, wide - range oscillation, with a trend strength of 0 for both [2][48][50]. - Steam Coal: Daily consumption recovers, oscillates and stabilizes, with a trend strength of 0 [2][52][55]. Others - Logs: Oscillate repeatedly [2][56].

Group 1: Industry Investment Rating - The investment rating for the zinc industry is "High-level oscillation" [1] Group 2: Core Viewpoints - The report presents the latest data on zinc's fundamentals, including prices, trading volumes, open interests, premiums, and inventories, and also mentions relevant news and trend strength [1][2] Group 3: Summary by Relevant Content 1. Zinc Fundamental Data - **Prices**: The closing price of SHFE Zinc main contract was 22,885 yuan/ton, down 0.56%; the closing price of LME Zinc 3M electronic trading was 2,829 dollars/ton, down 0.40% [1] - **Trading Volumes**: The trading volume of SHFE Zinc main contract was 152,086 lots, an increase of 83 lots; the trading volume of LME Zinc was 8,275 lots, a decrease of 2,398 lots [1] - **Open Interests**: The open interest of SHFE Zinc main contract was 129,228 lots, a decrease of 5,707 lots; the open interest of LME Zinc was 190,675 lots, an increase of 2,366 lots [1] - **Premiums**: Shanghai 0 zinc premium was -20 yuan/ton, down 5 yuan/ton; LME CASH - 3M premium was -1.8 dollars/ton, down 10.8 dollars/ton [1] - **Inventories**: SHFE zinc futures inventory was 13,289 tons, an increase of 1,349 tons; LME zinc inventory was 115,775 tons, a decrease of 1,125 tons [1] 2. News - The Chinese Ministry of Foreign Affairs clarified its stance on issues such as so - called "overcapacity" and industrial subsidies in China - EU economic and trade relations, emphasizing the complementary and win - win nature of China - EU economic and trade relations and the need for the EU to relax restrictions on high - tech product exports to China [2] 3. Trend Strength - The trend strength of zinc is -1, indicating a relatively bearish sentiment [2][3]

Economic Overview - In the first half of 2025, China's GDP grew by 5.3% year-on-year, ranking among the top major economies globally [1] - The per capita disposable income for residents reached 21,840 yuan, also reflecting a nominal growth of 5.3% compared to the same period last year [1] - The Consumer Price Index (CPI) showed a slight decline of 0.1% year-on-year, indicating a stable yet decreasing trend in domestic prices [1] Real Estate Market Changes - The real estate market continued to experience a decline in both volume and price, with new residential sales area down by 3.5% and sales value down by 5.5% in the first half of 2025 [5] - A significant change in housing prices is expected, with a divergence in price trends across different cities; cities with previously larger declines may see a slowdown, while major cities like Shanghai and Shenzhen may face further price drops [5] - The pre-sale system for commercial housing is anticipated to be gradually abolished, with an increase in the proportion of completed homes for sale, allowing buyers to view properties before purchasing [7] - The government plans to accelerate the market entry of affordable housing, aiming to provide 6 million units over the next five years, which will likely reduce costs for buyers and exert downward pressure on market prices [7] Automotive Market Dynamics - The automotive market is experiencing a price reduction trend, with many brands reducing prices by 20,000 to 30,000 yuan for mid-range vehicles and up to 90,000 yuan for luxury cars [9] - Factors contributing to this price reduction include an influx of new energy vehicles, increased competition from tech companies entering the automotive sector, and a decline in demand due to reduced middle-class incomes [9] Banking and Savings Landscape - Concerns are rising that holding cash may become less valuable due to excessive money supply, with M2 reaching 326 trillion yuan, over twice the GDP of 2024 [11] - Despite a slight decline in CPI, the economy is currently experiencing deflation rather than inflation, as excess money is not circulating into the economy [11] - Although deposit rates have fallen to historic lows, further declines are expected to be limited, as extremely low rates may lead to significant withdrawals from banks, increasing financing difficulties [13]

Core Viewpoint - The commencement of the "Yaxia" hydropower station construction, with a total investment of 1.2 trillion, is expected to boost infrastructure investment growth and enhance economic stability expectations [1]. Market Performance - The stock market continued to rebound, with the Shanghai Composite Index showing a five-week upward trend and reaching a recent high during the week [1]. - Daily trading volume in both markets exceeded 1.8 trillion, indicating a significant increase compared to the previous week [1]. - The Shenzhen Component Index accelerated its gains, achieving a new high for the year [1]. Sector Focus - Market hotspots were primarily concentrated in construction and building materials sectors related to infrastructure [1]. - Investment styles favored small-cap and technology sectors, which experienced larger gains [1]. Technical Analysis - The Shanghai Composite Index has accelerated its upward movement after breaking through a consolidation range from the previous year [1]. - The main technical resistance level is at the high point from early October of last year, which also represents the top of a weekly large box range [1].

July 23, 2025 05:22 AM GMT Morgan Stanley Asia (Singapore) Pte. 甘永康 亚洲经济学家 Derrick.Kam@morganstanley.com 亚洲经济研究 | Asia Pacific M Idea 观点：中国：反内卷⸺通缩 解药？ 鉴于强烈的政策导向，未来几个月可能会加大应对产能过剩 挑战的政策力度。然而，我们认为仅解决供给因素可能不足 以应对通缩挑战⸺需求条件更为重要。 要点 在本报告中，我们讨论了中国通缩挑战的根源和解决方案，包括我们对反内卷计 划应对通缩挑战的有效性的看法。 This translated report is made available for convenience only and is based on the original research report published in English. In the event of any discrepancy between the translation and the original research report, the content in ...