Investment Rating - The report maintains a rating of "Buy" for the coal mining sector [5] Core Views - The report emphasizes three key viewpoints regarding the coal market dynamics and investment strategies [4][9] - It highlights that the recent price adjustments are a normal digestion of previous rapid increases, and the core logic of rising coal prices due to supply constraints remains unchanged [4] - The report anticipates that as demand (whether speculative or real) activates, coal prices will rise, with expectations for prices to peak at the end of the year, potentially exceeding market expectations [4] Summary by Sections Production - In October, the raw coal production decreased by 2.3% year-on-year, with an output of 410 million tons, maintaining the same level as September [15][8] - For the first ten months of 2025, the cumulative production reached 3.97 billion tons, reflecting a growth of 1.5% year-on-year [15] - The forecast for 2025 suggests that the total thermal coal production may reach approximately 3.88 billion tons, with a growth rate narrowing to around 1.4% [15] Imports - In October, coal imports fell by 9.75% year-on-year, totaling 41.73 million tons, which is a decrease of 4.51 million tons compared to the same month last year [21][8] - For the first ten months of 2025, total coal imports amounted to 38.76 million tons, down 11% year-on-year [21] - The report predicts that the annual thermal coal import level may decline to around 38 million tons, a decrease of 6.4% year-on-year [21] Demand - In October, the industrial power generation increased by 7.9% year-on-year, with a total of 800.2 billion kWh generated [24][8] - The industrial thermal power generation saw a year-on-year increase of 7.3%, reversing a decline of 5.4% in September [24] - Conversely, crude steel production in October dropped by 12.07% year-on-year, amounting to 72 million tons, with the decline accelerating compared to September [37][8] Investment Recommendations - The report recommends focusing on high-performing stocks, particularly in the coal sector, including China Shenhua, China Coal Energy, and Yancoal [45][9] - It suggests a shift towards second-tier stocks as coal prices continue to rise, emphasizing the importance of selecting stocks based on performance and valuation [9]

Core Viewpoint - Everbright Securities maintains an "overweight" rating for the steel and non-ferrous metals industries, with a ranking of industry prosperity as follows: copper and aluminum > gold > steel [1][2]. Supply - Supply growth for steel, copper, and aluminum remains constrained. For steel, energy consumption and carbon emissions will continue to restrict supply, with crude steel output facing pressure. Future policies similar to the 2017 supply-side reform need to be monitored [3]. - For copper, Freeport and Teck Resources have lowered their 2026 production guidance, leading to increased disruptions at the mining level, with a projected 0.1% year-on-year decline in global refined copper output for 2026 [3]. - Aluminum production in China is expected to grow by 1.6% in 2026 due to capacity constraints [3]. Demand - Demand recovery will contribute to price elasticity for steel, copper, and aluminum. The real estate market is still expected to stabilize, but the World Steel Association forecasts a 1% year-on-year decline in steel demand in China for 2026 [4]. - For copper, the demand from the new energy sector is anticipated to be the main growth driver, with a projected 1.5% increase in global copper demand for 2026 [4]. - Aluminum demand in China is expected to grow by 1.8% in 2026, driven by manufacturing sectors such as new energy vehicles and electricity, which offset declines in real estate [4]. Gold - The demand for gold is expected to rise due to ETF investments and central bank purchases. The U.S. entering a rate-cutting cycle, combined with increased global uncertainty, is likely to boost gold ETF investment demand [5]. Recommended Stocks - For steel, companies such as Baosteel and Jiuli Special Materials are recommended, with a focus on Erdos, CITIC Special Steel, and Hualing Steel [6]. - In the copper sector, Zijin Mining and Luoyang Molybdenum are recommended, with attention to Tongling Nonferrous Metals, Western Mining, and Jincheng Mining [6]. - For aluminum, China Hongqiao is recommended, with a focus on Yun Aluminum, Shenhuo, and Zhongfu Industrial [6]. - In the gold sector, Zijin Mining is recommended, with attention to Chifeng Jilong Gold Mining and Zijin Gold International [6].

1. Report Industry Investment Ratings - Aluminum: Cautiously bullish [11] - Alumina: Cautiously bearish [11] - Aluminum alloy: Cautiously bullish [11] 2. Core Viewpoints of the Report - In the long - term, under the background of limited supply, high industry profits are not a factor restricting the rise of aluminum prices. Short - term upward movement of aluminum prices requires resonance between a favorable macro - environment and strong micro - consumption. Currently in the off - season, there is a slight increase in social inventory, and long - term attention should be paid to delivery risks. Wait for long - term long opportunities brought by callbacks caused by inventory accumulation, macro factors, and tariff impacts. For alumina, the supply is in surplus, and the prices in the domestic and overseas spot markets are starting to weaken. For aluminum alloy, consumption is transitioning from the off - season to the peak season, and there are still opportunities for spread arbitrage in the 11 - contract [7][9][10] 3. Summary by Related Catalogs 3.1 Important Data 3.1.1 Aluminum Spot - East China A00 aluminum price is 20,780 yuan/ton, with a change of 70 yuan/ton from the previous trading day, and the spot premium is 20 yuan/ton, with a change of - 10 yuan/ton. Central China A00 aluminum price is 20,630 yuan/ton, and the spot premium changes - 30 yuan/ton to - 130 yuan/ton. Foshan A00 aluminum price is 20,720 yuan/ton, with a change of 70 yuan/ton, and the aluminum spot premium changes - 5 yuan/ton to - 35 yuan/ton [2] 3.1.2 Aluminum Futures - On August 25, 2025, the main SHFE aluminum contract opened at 20,625 yuan/ton, closed at 20,770 yuan/ton, up 100 yuan/ton from the previous trading day, with a high of 20,800 yuan/ton and a low of 20,620 yuan/ton. The trading volume was 146,160 lots, and the open interest was 248,343 lots [3] 3.1.3 Inventory - As of August 25, 2025, the domestic social inventory of electrolytic aluminum ingots was 616,000 tons, with a change of 2.0 tons from the previous period. The warrant inventory was 56,670 tons, down 474 tons from the previous trading day. The LME aluminum inventory was 478,725 tons, down 800 tons from the previous trading day [3] 3.1.4 Alumina Spot Price - On August 25, 2025, the SMM alumina price in Shanxi was 3,215 yuan/ton, Shandong was 3,190 yuan/ton, Henan was 3,215 yuan/ton, Guangxi was 3,325 yuan/ton, Guizhou was 3,340 yuan/ton, and the Australian alumina FOB price was 372 US dollars/ton [3] 3.1.5 Alumina Futures - On August 25, 2025, the main alumina contract opened at 3,141 yuan/ton, closed at 3,184 yuan/ton, up 42 yuan/ton from the previous trading day's closing price, a change of 1.34%. The high was 3,216 yuan/ton, and the low was 3,141 yuan/ton. The trading volume was 455,135 lots, and the open interest was 193,845 lots [3] 3.1.6 Aluminum Alloy Price - On August 25, 2025, the procurement price of Baotai civil cast aluminum was 15,700 yuan/ton, and the procurement price of mechanical cast aluminum was 15,800 yuan/ton, with no change from the previous day. The Baotai quotation of ADC12 was 20,100 yuan/ton, with no change from the previous day [4] 3.1.7 Aluminum Alloy Inventory - The social inventory of aluminum alloy was 52,100 tons, and the in - plant inventory was 60,300 tons [5] 3.1.8 Aluminum Alloy Cost and Profit - The theoretical total cost was 20,097 yuan/ton, and the theoretical profit was 4 yuan/ton [6] 3.2 Market Analysis 3.2.1 Electrolytic Aluminum - The smelting profit has expanded to 4,000 yuan/ton during the off - season. In the long run, under the restricted supply, high profits are not a factor restricting price increases. In the short term, price increases need a favorable macro - environment and strong consumption. Currently in the off - season, there is a slight increase in social inventory, and it is expected to accumulate slightly in July. Even after inventory accumulation, the absolute inventory level is still at a historical low, and long - term attention should be paid to delivery risks. Wait for long - term long opportunities brought by callbacks [7] 3.2.2 Alumina - In the spot market, the ex - factory price in Henan was 3,200 yuan/ton for 3,000 tons, and two transactions in Shanxi were both 3,180 yuan/ton, totaling 2,500 tons. The arrival price of a regular tender in Xinjiang for 10,000 tons was 3,450 - 3,460 yuan/ton, down 30 yuan/ton from last week. On the cost side, due to the decline in rainy - season shipments, the supply in the bulk market has decreased, and the transaction center of the ore end is at 75 US dollars/ton, while the sea freight is 23.5 US dollars/ton, up 1.5 US dollars/ton week - on - week. The bauxite price is in a stable and volatile trend. The industry still has smelting profit, and the supply is in surplus. The prices in the domestic and overseas spot markets are starting to weaken, the import window has opened compared with the southern domestic prices, and the situation of a weaker north and a stronger south in the domestic market remains. Currently, the futures price is basically at par with the spot price, and attention should be paid to the decline rate of the spot market transaction price [8][9] 3.2.3 Aluminum Alloy - The spread between the AD2511 - AL2511 contracts is - 410 yuan/ton. Consumption is starting to transition from the off - season to the peak season, and both the spot market price spread and the smelting profit of aluminum alloy enterprises show a seasonal recovery trend. Spread arbitrage in the 11 - contract can still be concerned [10] 3.3 Strategy - Unilateral: Bullish on aluminum with caution, bearish on alumina with caution, and bullish on aluminum alloy with caution. Arbitrage: SHFE aluminum positive spread, long AD11 and short AL11 [11]