1. Report Industry Investment Rating - No information provided 2. Core Views of the Report - Steel prices are expected to fluctuate within a range. The firm cost support from raw materials and the inventory reduction during the traditional peak season are positive factors, while limited demand growth, high energy prices, and reduced overseas interest - rate cut expectations are negative factors [9][39] - Iron ore prices are expected to be strong in the short - term. The improvement in fundamentals, including increased global shipments, inventory replenishment by steel mills, and rising iron - water production, boosts the price. However, high port inventories are a potential negative factor [10][42] 3. Summary by Directory 3.1 Report Summary - **Market Focus**: Multiple events influence the market, such as steel price increases in Hubei, changes in steel billet and iron ore inventories, national policies on industry development, and international trade policies [6] - **Fundamental Overview**: Steel production capacity utilization is recovering, with increased output of rebar and hot - rolled coils. Blast - furnace profits for finished products have slightly declined. After the Spring Festival, steel mill demand has gradually recovered [8] - **Main Views**: Rebar demand related to real estate is under pressure. The inflection point of steel inventory reduction has emerged. Global iron ore shipments have slightly increased, and freight rates have slightly decreased. Steel mills have replenished iron ore, and port inventories have slightly decreased. Iron - water production and the daily consumption of iron ore by steel mills have increased [11] 3.2 Multi - and Short - Focus - **Finished Products**: Positive factors include strong raw material prices and the arrival of the traditional peak season with an inventory inflection point. Negative factors are limited demand growth, high energy prices, and reduced overseas interest - rate cut expectations [14] - **Iron Ore**: Positive factors are rising energy prices increasing transportation costs, rising iron - water production and consumption, and steel mills' inventory replenishment. The negative factor is high port inventories [16] 3.3 Data Analysis - **Production and Capacity Utilization**: As of March 20, rebar output was 203.33 million tons (up 8.03 million tons week - on - week), hot - rolled coil output was 300.21 million tons (up 4.95 million tons week - on - week). The blast - furnace capacity utilization rate of 247 steel enterprises was 85.53% (up 2.61% week - on - week), and the independent electric - arc furnace capacity utilization rate was 56.57% (up 6.13% week - on - week) [18] - **Profit**: As of March 19, the blast - furnace production profit of rebar was 63 yuan/ton, and that of hot - rolled coils was - 1 yuan/ton. The electric - arc furnace production cost of rebar was 3422 yuan/ton [20] - **Demand**: As of March 20, rebar consumption was 208.09 million tons (up 78.58 million tons week - on - week), hot - rolled coil consumption was 310.51 million tons (up 15.15 million tons week - on - week), and cold - rolled consumption was 94.61 million tons (up 3.41 million tons week - on - week) [21] - **Real Estate Impact**: From January to February 2026, national real - estate development investment decreased by 11.1% year - on - year, construction area decreased by 11.7% year - on - year, and new commercial housing sales area decreased by 13.5% year - on - year [24] - **Inventory**: As of March 20, rebar inventory in steel mills decreased by 3.42 million tons, and social inventory decreased by 1.34 million tons. Hot - rolled coil inventory in steel mills decreased by 4.32 million tons, and social inventory decreased by 5.98 million tons [26] - **Iron Ore Shipment and Freight**: As of March 13, global iron ore shipments were 3048.8 million tons (up 151 million tons week - on - week). The freight rate from Port Hedland to Qingdao decreased slightly but was still higher than at the beginning of the year [30] - **Iron Ore Inventory and Consumption**: As of March 20, 45 - port iron ore inventory decreased by 89.12 million tons, and the daily consumption of imported iron ore by 247 steel enterprises increased by 9.2 million tons [32][34] - **Rebar - Hot - Rolled Coil Spread**: As of March 20, the spread between rebar and hot - rolled coil futures contracts was 167 yuan/ton, up from the previous week [36] 3.4 Market Outlook - **Steel**: The market is expected to fluctuate within a range. Attention should be paid to inventory reduction during the peak season and the impact of the Middle - East situation on overseas export demand [39] - **Iron Ore**: The short - term fundamentals have improved, boosting the price. Attention should be paid to the restocking momentum from demand recovery and the impact of fuel costs on transportation costs [42]

Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - After the important meeting, steel production is expected to increase, with the output of blast furnace rebar and hot-rolled coils likely to rebound quickly. Pig iron production will rise, reaching over 2.3 million tons by the end of March to early April. The macro environment is relatively loose, and the trends of rebar and hot-rolled coils at the industrial level depend more on the quality of demand and the game between expectations and reality. It is expected that there is still room for an upward trend. For iron ore, short-term rumors may disrupt the market, but it should be viewed rationally. As pig iron production rebounds, the incremental demand for iron ore is relatively certain. Although port inventories have increased, steel mill inventories are low, and there is a high possibility of active restocking by steel mills later, with the inventory consumption ratio tending to decline. It is expected that the trend will still be bullish, but technically, it may fill the gap in the short term [1][2] Summary by Directory Market Review - On Friday, rebar, hot-rolled coils, and iron ore opened higher with a gap. RB2605 closed at 3142, up 0.58%. It closed down at night [1] Important Information - The draft report on the national economic and social development plan for 2026 was released, which mentioned continuing to promote the quality improvement, cost reduction, and carbon reduction actions in key industries in 2026, including strengthening capacity governance in key industries, promoting supply-demand balance and stability in key industries such as steel, non-ferrous metals, building materials, petrochemicals, and chemicals, and orderly reducing the capacity of industries such as steel and refining [1] - According to data from the China Iron and Steel Association, in the first ten days of March 2026, key steel enterprises produced 20.11 million tons of crude steel, with an average daily output of 2.011 million tons, a 0.8% decrease from the previous ten days. The steel inventory was 17.81 million tons, a 2.7% increase from the previous ten days [1] - Last week, the total inventory of imported iron ore at 47 ports nationwide was 179.4732 million tons, a 524,900-ton increase from the previous week; the total inventory at 45 ports was 171.8752 million tons, a 696,600-ton increase from the previous week [1] - Last week, the total inventory of imported iron ore at steel mills nationwide was 89.291 million tons, a 824,700-ton decrease from the previous week [1] Market Logic - Last week, the production, inventory, and apparent demand of rebar all increased. The production increased significantly, with a weekly increase of 219,900 tons. The inventory continued to accumulate, but the accumulation speed slowed down significantly. The apparent demand of rebar increased by 785,800 tons, indicating that the demand for rebar has started. Overall, the current inventory pressure of rebar is not large [1] - For hot-rolled coils, the production last week was 2.9526 million tons, a 58,500-ton decrease from the previous week, and it has been declining for two consecutive weeks. The total inventory was 4.7159 million tons, a 1,000-ton decrease from the previous week. The factory inventory was 892,800 tons, a 8,000-ton decrease from the previous week, and the social inventory was 3.8231 million tons, a 7,000-ton increase from the previous week. The factory inventory decreased, and the social inventory increased slightly, with the total inventory remaining basically unchanged. The apparent demand was 2.9536 million tons, a 137,900-ton increase from the previous week, almost the same as the production, indicating a tight supply-demand balance for hot-rolled coils [1] - The daily pig iron production last week was 2.212 million tons, a 63,900-ton decrease from the previous week. The production limit during the Two Sessions was an important factor, and it will increase later [1] Trading Strategies - After the important meeting, steel production is expected to increase, and pig iron production will rise to over 2.3 million tons by the end of March to early April. The macro environment is relatively loose, and the trends of rebar and hot-rolled coils at the industrial level depend more on the quality of demand and the game between expectations and reality. It is expected that there is still room for an upward trend. For iron ore, short-term rumors may disrupt the market, but it should be viewed rationally. As pig iron production rebounds, the incremental demand for iron ore is relatively certain. Although port inventories have increased, steel mill inventories are low, and there is a high possibility of active restocking by steel mills later, with the inventory consumption ratio tending to decline. It is expected that the trend will still be bullish, but technically, it may fill the gap in the short term [1][2] - The support level for the rebar main contract is 3000, and the pressure level is 3200. The support level for the hot-rolled coil is 3180, and the pressure level is 3350. The support level for the iron ore main contract is 750, and the pressure level is 840 [2] - For single-sided trading, continue to hold long positions in steel and iron ore, and continuously raise the stop-loss line. For arbitrage, continue to hold the strategy of going long on the hot-rolled coil - rebar spread, with a suggested stop-loss level of 120 for the spread and a take-profit level of 200. The rebar - iron ore ratio has dropped below 4 and may continue to decline. Wait for trading opportunities to go long on the rebar - iron ore ratio [2]

1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints - The steel industry has prominent "involution" issues, and capacity governance is the primary task to optimize the industrial environment [2]. - The weekly output of rebar has increased, terminal demand has risen simultaneously, but inventory is also increasing, and the supply - demand situation remains relatively loose [2]. - The fundamentals of rebar have changed little, and the market's focus is on the development of the US - Iran situation. The stabilization of oil prices supports commodities [2]. - For RB2605 contract, the 1 - hour MACD indicator shows that DIFF and DEA are running above the 0 - axis, and the green bar is shrinking. It is recommended for short - term trading with attention to risk control [2]. 3. Summary by Relevant Catalogs 3.1 Futures Market - RB main contract closing price: 3,115.00 yuan/ton, up 11 yuan [2]. - RB main contract position: 1,722,422 lots, down 8,941 lots [2]. - RB contract top 20 net position: - 8,236 lots, down 5,914 lots [2]. - RB5 - 10 contract spread: - 29 yuan/ton, down 1 yuan [2]. - RB Shanghai Futures Exchange warehouse receipt: 40,503 tons, up 16,352 tons [2]. - HC2605 - RB2605 contract spread: 154 yuan/ton, up 2 yuan [2]. 3.2 Spot Market - Hangzhou HRB400E 20MM (theoretical weight): 3,270.00 yuan/ton, unchanged [2]. - Hangzhou HRB400E 20MM (actual weight): 3,354 yuan/ton, unchanged [2]. - Guangzhou HRB400E 20MM (theoretical weight): 3,400.00 yuan/ton, unchanged [2]. - Tianjin HRB400E 20MM (theoretical weight): 3,150.00 yuan/ton, unchanged [2]. - RB main contract basis: 155.00 yuan/ton, down 11 yuan [2]. - Hangzhou hot - rolled coil - rebar spot spread: 10.00 yuan/ton, unchanged [2]. 3.3 Upstream Situation - Qingdao Port 60.8% PB iron ore fines: 775.00 yuan/wet ton, up 5.00 yuan [2]. - Tianjin Port first - grade metallurgical coke (FOB price): 1,540.00 yuan/ton, unchanged [2]. - Tangshan 6 - 8mm scrap steel (tax - free): 2,170.00 yuan/ton, unchanged [2]. - Hebei Q235 billet: 2,940.00 yuan/ton, up 10.00 yuan [2]. - 45 - port iron ore inventory: 17,122.72 million tons, up 26.41 million tons [2]. - Sample coking plant coke inventory: 63.03 million tons, up 0.44 million tons [2]. 3.4 Industry Situation - Sample steel mill coke inventory: 671.53 million tons, down 3.53 million tons [2]. - Tangshan billet inventory: 232.65 million tons, up 13.19 million tons [2]. - 247 steel mill blast furnace operating rate: 77.69%, down 2.55 percentage points [2]. - 247 steel mill blast furnace capacity utilization rate: 85.30%, down 2.18 percentage points [2]. - Sample steel mill rebar output: 173.31 million tons, up 8.21 million tons [2]. - Sample steel mill rebar capacity utilization rate: 37.99%, up 1.80 percentage points [2]. - Sample steel mill rebar inventory: 237.93 million tons, up 5.09 million tons [2]. - 35 - city rebar social inventory: 637.75 million tons, up 69.99 million tons [2]. - Independent electric arc furnace steel mill operating rate: 35.42%, up 23.96 percentage points [2]. - Domestic crude steel output (monthly): 6,818 million tons, down 169 million tons [2]. - Chinese rebar monthly output: 1,375 million tons, up 19 million tons [2]. - Steel net export volume (monthly): 1,078.00 million tons, up 331.11 million tons [2]. 3.5 Downstream Situation - National real estate climate index: 91.45, down 0.44 [2]. - Cumulative year - on - year growth rate of fixed - asset investment: - 3.80%, down 1.20 percentage points [2]. - Cumulative year - on - year growth rate of real estate development investment: - 17.20%, down 1.30 percentage points [2]. - Cumulative year - on - year growth rate of infrastructure construction investment: - 2.20%, down 1.10 percentage points [2]. - Cumulative value of housing construction area: 659,890 million square meters, down 3,824 million square meters [2]. - Cumulative value of new housing construction area: 58,770 million square meters, down 5,313 million square meters [2]. - Commodity housing unsold area: 40,236.00 million square meters, down 875.00 million square meters [2]. - According to Mysteel statistics, the total sales of 14 key real estate enterprises from January to February 2026 were 118.666 billion yuan, a year - on - year decrease of 23.7%; the total sales in February were 50.627 billion yuan, a year - on - year decrease of 35.2% and a month - on - month decrease of 25.6% [2]. 3.6 Industry News - Due to the transportation obstruction in the Strait of Hormuz, Saudi Arabia, Iraq, the UAE, and Kuwait have jointly cut production by about 6.7 million barrels per day, reducing the global oil supply by about 6% [2]. 3.7 Key Points to Watch - Thursday's weekly rebar output, in - plant inventory, and social inventory [2]

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The steel market shows a situation of both supply and demand increasing, with the slowdown of inventory accumulation. The supply pressure of rebar is limited, and the apparent consumption has significantly recovered, but the absolute level is still low. The inventory pressure is controllable, which supports the price stability. For iron ore, the import has increased significantly in the first two months, and the demand is expected to increase significantly after the Two - Sessions. The prices of finished products and iron ore are expected to show an oscillatory trend [1]. 3. Summary by Relevant Catalogs 3.1 Market Review - On Tuesday, rebar and hot - rolled coils closed down, while iron ore closed up. During the night session, rebar and hot - rolled coils continued to close down, and iron ore continued to close up [1]. 3.2 Important Information - From January to February 2026, China's cumulative steel exports were 15.591 million tons, a year - on - year decrease of 8.1%; cumulative steel imports were 0.827 million tons, a year - on - year decrease of 21.7%; cumulative imports of iron ore and its concentrates were 210.023 million tons, a year - on - year increase of 10.0%; cumulative imports of coal and lignite were 77.222 million tons, a year - on - year increase of 1.5% [1]. - In February 2026, China exported 736,000 vehicles; from January to February, the cumulative exports were 1.532 million vehicles, a year - on - year increase of 57.9% [1]. - From March 2nd to March 8th, the total transaction (signing) area of newly built commercial housing in 10 key cities was 1.0084 million square meters, a month - on - month decrease of 23.6% and a year - on - year decrease of 34.4% [1]. - In February 2026, China exported 35.8985 million household appliances; from January to February, the cumulative exports were 80.2852 million units, a year - on - year increase of 16.4% [1]. - Guangxi aims to complete the renovation of more than 40,000 sets of urban dilapidated houses by 2030 [1]. - A representative of the National People's Congress suggested restoring the export tax rebate for high - end products and implementing the strategy of "promoting high - end, stabilizing the surrounding areas, and strict supervision" to solve the "involution" problem in the industry [1]. 3.3 Market Logic - The supply and demand of steel both increase, and the inventory accumulation slows down. The rebar production is still at the lowest level in the same period of the past five years, and the supply pressure is limited. The apparent consumption has recovered significantly, but the absolute level is still low. The inventory is accumulating, but the growth rate slows down, and the year - on - year increase is only 3%, so the overall inventory pressure is controllable. For iron ore, the import has increased by 10% in the first two months, and the iron - making water production is higher than that of the same period last year. Due to the production restrictions during the Two - Sessions, the iron - making water production has decreased, and it is expected to recover rapidly after the Two - Sessions, with a significant increase in iron ore demand. The spot price of iron ore has exceeded $105 [1]. 3.4 Trading Strategy - It is expected that the prices of finished products and iron ore will show an oscillatory trend, and the demand recovery situation should be continuously monitored. The support level of rebar is 3000, and the pressure level is 3200. The support level of hot - rolled coils is 3180, and the pressure level is 3300. The support level of iron ore is 730, and the pressure level is 800. For single - side trading, the existing long positions of rebar and hot - rolled coils should be held with stop - loss set. For arbitrage, the spread between hot - rolled coils and rebar has continued to widen to 158. The arbitrage positions of going long on hot - rolled coils and short on rebar should be held, with the stop - loss recommended to be raised to 120 and the take - profit set above 200 [1].

Inflation Overview - In February, the CPI increased by 1.3% year-on-year, the highest in nearly three years, and up 1.0% month-on-month, marking a two-year peak[2] - The core CPI, excluding food and energy, rose to 1.8% year-on-year, driven by strong demand during the Spring Festival[2] - Food prices turned from decline to an increase of 1.7% year-on-year, contributing approximately 0.30 percentage points to the CPI increase[14] PPI Trends - The PPI decreased by 0.9% year-on-year, with the decline narrowing for the third consecutive month, while month-on-month it rose by 0.4%, marking five months of continuous increase[18] - Production material prices increased by 0.5% month-on-month, serving as the main driver for the PPI's month-on-month rise[3] - Significant increases in upstream resource prices were noted, with non-ferrous mining and oil extraction prices rising by 7.1% and 5.1% respectively[3] Market Dynamics - The strong performance of the PPI is attributed to multiple factors, including rising international commodity prices and robust demand for AI computing power, which boosted the communication and electronics sectors[3] - The overall price structure shows a moderate bottoming out with structural differentiation, indicating a transition from policy stimulus to endogenous recovery[8] Risks and Considerations - Potential risks include changes in government policy, slower-than-expected economic recovery, and unforeseen extreme weather impacts on prices[4]

Group 1: CPI Analysis - In February, the Consumer Price Index (CPI) increased by 1.0% month-on-month and 1.3% year-on-year, marking the highest month-on-month increase in nearly two years and the highest year-on-year increase in nearly three years [1][5] - The core CPI, excluding food and energy, rose by 1.8% year-on-year, the highest since 2020, indicating a gradual recovery in consumer demand, although it remains relatively low [5][7] - The increase in CPI is attributed to the concentrated release of consumer demand during the long Spring Festival holiday, with service prices rising significantly [6][7] Group 2: PPI Insights - The Producer Price Index (PPI) rose by 0.4% month-on-month but decreased by 0.9% year-on-year, with the decline narrowing for three consecutive months [2][9] - The rise in PPI is driven by increasing prices in upstream mining and smelting sectors, while midstream and downstream product prices have seen more moderate increases [2][9] - Notably, the price of lithium-ion battery manufacturing has increased by 0.2% after a 33-month decline, reflecting the effectiveness of capacity governance and anti-"involution" policies in the industry [9][10] Group 3: Industry Trends - The recent price rebound in the photovoltaic and lithium battery sectors indicates the effectiveness of policies aimed at capacity governance and reducing "involution" competition, shifting the focus from price competition to quality and profit [10] - The domestic policy cycle is entering a new phase, with significant investments in new infrastructure and modern energy systems expected to improve demand across the electrical equipment and electronic information sectors [10] - Future price stability will depend on the ability of consumer demand and corporate investment to absorb rising costs, with potential impacts on profit margins rather than significant increases in end prices [10]

Summary of Conference Call on Cement Industry Outlook Industry Overview - The cement industry is expected to see a **6% year-on-year decline in demand for 2026**, primarily driven by infrastructure projects accounting for over **50%** of the demand, while real estate demand drops to below **20%** [1][24]. - The overall profitability of the industry remains in a **loss zone** [1][2]. Price Trends - Price trends are anticipated to be **low initially and high later**, with a critical price increase window expected in **August to September** [1][5][6]. - In the Yangtze River Delta, factory prices have fallen to a historical low of **200 RMB/ton**, indicating a strong demand for price recovery [1][2]. Capacity Management - Capacity governance has shown initial effectiveness, with registered capacity expected to decrease to **1.58 billion tons** by the end of Q1 2026, a net reduction of approximately **60 million tons** [1][3][4]. - The number of production lines has decreased from over **1,500** to about **1,300**, with around **200 lines** exiting the market [3][4]. Supply and Demand Dynamics - The supply-demand turning point is expected in **2027**, with clinker consumption stabilizing between **990 million to 1 billion tons**, which may lead to demand stabilization and price recovery [1][2]. - The utilization rate in the Yangtze River Basin is close to **100%** under registered capacity, suggesting that strict adherence to production limits could significantly enhance price elasticity in this region [1][10]. Policy and Regulatory Environment - The focus of policy has shifted towards **"dual control of capacity"** and verification of registered capacity, with limited short-term impact from carbon emission constraints [1][12][15]. - There is a lack of clear administrative penalties for exceeding approved production capacities, which complicates the enforcement of production regulations [11][12]. Market Sentiment and Future Outlook - The overall market sentiment remains weak, with expectations of continued low demand and prices in the first quarter of 2026 [2][19]. - The industry anticipates a potential recovery in the second half of 2026, driven by improved demand and better execution of capacity governance [5][6]. Key Risks and Considerations - The industry faces risks from **cash flow pressures** and potential **defaults** in downstream sectors, particularly in the ready-mix concrete industry, which has seen a significant decline in the number of companies due to financial strain [22][23]. - The anticipated decline in demand for 2026 is attributed to tight funding conditions and the impact of political transitions on infrastructure project initiation [24][25]. Conclusion - The cement industry is navigating a challenging landscape with declining demand and profitability. However, there are signs of potential recovery in the latter half of 2026, contingent on effective capacity management and improved market conditions. Monitoring the implementation of regulatory policies and market responses will be crucial in assessing future trends [27][28].

Core Viewpoint - The steel sector is at a turning point characterized by low expectations, a bottoming out of fundamentals, and upcoming catalysts, with the only steel ETF (515210) rising over 2% [1] Supply Side: "Anti-Competition" Policy Implementation and Capacity Management Acceleration - The "anti-competition" policy in the steel industry is becoming actionable, with clearer requirements for supply control in the new growth stabilization plan [2] - Environmental inspections are ongoing, leading to accelerated exit of non-compliant capacities, which is expected to enhance industry concentration [2] - The market share of the eight major construction state-owned enterprises has increased from 41% at the end of 2022 to 51% by the end of 2025, indicating a trend towards resource concentration among leading firms [2] Cost Side: Iron Ore Supply Easing and Profit Transfer to Downstream - The long-standing issue of the steel industry being constrained by upstream iron ore is changing, with new large mines coming online [3] - Current port iron ore inventory has reached 169 million tons, nearing historical highs, indicating a loosening supply [3] - The profit distribution within the steel industry is shifting, with iron ore profits expected to decrease, allowing for improved profitability in the finished steel segment [3] Inventory and Price: Low Inventory and Price Stabilization Establishing an Upward Foundation - This year's winter storage efforts are weaker than in previous years, resulting in total inventory at near historical lows, which reduces post-holiday destocking pressure [4] - Steel prices have stabilized at around 3200 yuan/ton, indicating a bottoming out, and any demand or supply-side catalysts could lead to significant price increases [4] - The upcoming demand peak in March, following the late Lunar New Year, is expected to boost trade sentiment and increase the likelihood of a strong market opening [4] Demand Side: Internal and External Demand Expected to Create Synergy - External demand remains resilient due to manufacturing expansions in Southeast Asia and continued loose policies in Europe and the U.S. [5][6] - Domestic demand is anticipated to stabilize as the real estate sector shows signs of recovery after a prolonged downturn [6] - New emerging sectors, such as oil and gas and nuclear power, are expected to contribute to incremental demand for steel products [6] Investment Opportunity: Steel ETF (515210) as a Strategic Tool - The steel ETF (515210) provides a diversified investment approach to capture the sector's recovery potential amid "anti-competition" and cost reduction dynamics [7] - The current absolute valuation of the steel sector has improved from undervaluation to a moderately low position, indicating potential for absolute returns [7] - The ETF tracks leading companies with stable profit characteristics, making it a core investment choice for capturing both short-term trading opportunities and long-term value in the steel sector [7]

Group 1: Company Performance - The company plans to hold a board meeting on March 26, 2026, to review and approve the annual performance announcement for the year ending December 31, 2025, and to propose a final dividend if applicable [2][6] Group 2: Project Advancement - The company continues to layout resource projects through overseas acquisitions and collaborations. The full acquisition of the Cascabel copper-gold project from SolGold and partnerships in the Ainak copper mine and North Peru mining projects are expected to progress, potentially increasing self-produced copper output and resource reserves. The company adheres to a "resource-first" strategy, which is anticipated to enhance long-term resource security [3][7] Group 3: Industry Policies and Environment - The China Nonferrous Metals Industry Association has stated that it will solidly advance the governance of copper smelting capacity, having already halted over 2 million tons of copper smelting projects. This policy may optimize the industry supply-demand structure and provide potential support for leading enterprises. The association will continue to cooperate with relevant departments to strictly control new capacity [4][8]

1. Report Industry Investment Rating - Copper: Cautiously bullish [8] - Options: Sell put options [8] 2. Core View of the Report - After a significant decline, copper prices are showing signs of stabilizing and rebounding as gold prices gradually stabilize. The persistently low TC price pattern remains unchanged, so the probability of continuous decline is not high. However, due to the approaching Spring Festival holiday, demand continues to weaken. For enterprises with buy - hedging needs, they can carry out appropriate small - scale hedging (about two weeks' worth), but the position should not be too heavy. It is expected that the copper price will operate in the range of 98,000 yuan/ton to 110,000 yuan/ton before the Spring Festival [8] 3. Summary by Relevant Catalogs 3.1 Market News and Important Data 3.1.1 Futures Quotes - On February 4, 2026, the main contract of Shanghai copper opened at 104,950 yuan/ton and closed at 105,160 yuan/ton, a 0.63% increase from the previous trading day's close. The night - session main contract of Shanghai copper opened at 104,000 yuan/ton and closed at 102,590 yuan/ton, a 2.22% decrease from the afternoon closing price of the same day [1] 3.1.2 Spot Situation - According to SMM, the average spot price of SMM 1 electrolytic copper was at a discount of 100 yuan/ton, a 20 - yuan increase from the previous day. The copper price ranged from 103,800 to 105,010 yuan/ton, and the closing price was 103,830 yuan/ton. The market supply of goods was tight, and holders were reluctant to sell at low prices, causing the spot discount to gradually narrow. Downstream procurement slowed down, and the pattern of weak supply and demand continued. It is expected that the discount will continue to narrow slightly today [2] 3.2 Important Information Summary 3.2.1 Macro and Geopolitical Aspects - Iranian Foreign Minister Araqchi clarified Iran's official stance on the talks with the US in Oman, stating that the talks will be held in Muscat, the capital of Oman, at around 10 a.m. on February 6. The US previously rejected Iran's proposal to change the original meeting location from Istanbul, Turkey, to Oman, which raised concerns in the Middle East about the possibility of Trump taking military action [3] 3.2.2 Economic Data - The US added 22,000 new ADP jobs in January, far lower than the market expectation of 48,000. The previous value was revised down from 41,000 to 37,000. The US Bureau of Labor Statistics (BLS) announced that it will release the January non - farm payroll report on February 11, the job vacancy data on February 5, and reschedule the release of the January CPI on February 13 [3] 3.2.3 Mining End - Swedish copper and zinc mining company Boliden said on February 3 that heavy rainfall in Portugal in January caused water management problems at its Somincor mine. Although the company maintained its performance guidance for the mine in 2026, it said that the overall impact of the rain on the first - quarter performance would depend on future weather conditions. Boliden's CEO Mikael Staffas said that considering the company's leverage ratio, including net reclamation debt, which is much higher than the 20% target in the dividend policy, the company will not consider additional cash distribution this year [4] 3.2.4 Smelting and Import - On February 4, the China Nonferrous Metals Industry Association announced that it has stopped more than 2 million tons of new or planned copper smelting projects, indicating a key substantial progress in the industry's self - initiated capacity management and "anti - involution" policy. The association will continue to cooperate with national departments to strictly control new copper smelting projects, aiming to reverse the passive situation of the increasing proportion of imported copper concentrates. The association is also promoting the improvement of the copper resource reserve system, including expanding the national strategic reserve scale and exploring the establishment of a commercial reserve mechanism [5] 3.2.5 Consumption - In January 2026, the terminal consumption of copper products showed the characteristic of pre - holiday rush, but there were differences among specific sectors. In the power sector, State Grid orders were the core support, but project - end orders were weak. The home appliance industry was strong due to the year - end peak season. The automotive sector had stable orders. Traditional sectors such as construction and hardware were dragged down by the real - estate slump. High copper prices significantly suppressed terminal demand, and downstream procurement showed a "buy - on - dips" characteristic. It is expected that terminal consumption will enter a seasonal trough in February [6] 3.2.6 Inventory and Warehouse Receipts - LME warehouse receipts changed by 1,450 tons to 178,650 tons compared with the previous trading day. SHFE warehouse receipts changed by 751 tons to 159,772 tons. On February 4, the domestic electrolytic copper spot inventory was 330,400 tons, a change of 7,600 tons from the previous week [7]