Investment Rating - The report maintains a "Positive" investment rating for the non-ferrous and steel industry in China [6]. Core Views - The market has fully priced in the Federal Reserve's first interest rate cut, and the non-ferrous and steel sectors are set to rebound [9][15]. - Despite a recent decline in aluminum prices, the profitability of the electrolytic aluminum sector remains stable due to a simultaneous decrease in raw material costs [9][15]. - Gold prices are expected to rise in the medium term due to multiple factors, enhancing corporate profitability and dividend intentions [9][15]. - The steel sector is poised for mid-term profitability improvements, with potential increases in dividends as the Simandou iron ore project progresses [9][15]. Summary by Sections Non-Ferrous and Steel Industry Overview - The non-ferrous and steel sectors experienced a notable decline prior to the Federal Reserve's interest rate cut, driven by speculative trading [9][15]. - The market is expected to shift towards low-risk, high-dividend segments within the non-ferrous and steel sectors [9][15]. Electrolytic Aluminum - Although aluminum prices have decreased, the profitability of the sector remains stable due to lower raw material costs [9][15]. - Future price increases are anticipated as supply-demand dynamics tighten, potentially leading to higher dividend payouts from companies like Tianshan Aluminum [9][15]. Gold Sector - The recent interest rate cut is expected to lead to a short-term stabilization or correction in gold prices, but medium-term prospects remain positive [9][15]. - Increased profitability in gold mining companies is likely to result in higher dividend distributions [9][15]. Steel Sector - The Simandou iron ore project is entering a decisive phase, which could enhance mid-term profitability and dividend capabilities for steel companies [9][15]. - The steel price is expected to stabilize and potentially increase, supported by cost structures and seasonal demand shifts [9][15]. Supply and Demand Dynamics - The report notes a seasonal increase in rebar consumption, with a week-on-week rise of 6.04% [17][22]. - Inventory levels show a divergence between social and steel mill stocks, indicating structural improvements in demand [22][24]. Price Trends - The overall steel price index has seen a slight increase of 0.50%, with specific products like steel billets showing a 1.18% rise [37][38]. - The report highlights the importance of monitoring price movements in raw materials, which are crucial for profitability in the steel sector [29][34].

Investment Rating - The report maintains a "Positive" investment rating for the non-ferrous and steel industry [6] Core Viewpoints - The market is expected to shift towards low-risk, high-dividend sectors, making the allocation in non-ferrous and steel sectors timely. The operating performance of most sub-sectors in the non-ferrous and steel industry has shown significant improvement in both year-on-year and quarter-on-quarter comparisons [15][16] - Copper prices have surpassed $10,000 per ton, with expectations for profitability and dividend rates to gradually increase for copper mining companies. For instance, Zangge Mining reported a mid-term dividend of 1.569 billion yuan, with a dividend rate significantly raised to 87% [15][16] - Aluminum prices have risen, leading to upward revisions in profitability and dividend expectations. The aluminum price has reached 21,000 yuan per ton, and companies like Tianshan Aluminum have increased their dividend rates to 50% [16] - The rare earth sector is anticipated to enter a new phase of price increases due to the resumption of bidding by downstream magnetic material manufacturers, with companies like Jinkeli Yongci reporting a mid-term dividend rate of 81% [16] - Steel companies are expected to enhance their dividend capabilities as profitability improves and capital expenditures decline. For example, Huazhong Steel has seen an increase in shareholding by Xintai Life Insurance, which plans to continue increasing its stake [16] Summary by Sections Non-Ferrous and Steel Industry - The report highlights the positive outlook for low-risk, high-dividend sub-sectors within the non-ferrous and steel industry, driven by improving operating performance and rising commodity prices [15][16] - The copper market is experiencing tight supply, pushing prices above $10,000 per ton, which is expected to enhance profitability and dividends for mining companies [15][16] - The aluminum sector is benefiting from a favorable supply-demand balance, with prices rising and companies increasing their dividend rates [16] - The rare earth market is poised for growth as bidding resumes in downstream sectors, leading to improved profitability and dividend stability [16] - Steel companies are likely to see enhanced profitability and dividend capabilities due to reduced capital expenditures and improved market conditions [16]