Core Viewpoint - The US manufacturing sector experienced its first decline since December last year in July, primarily driven by tariff concerns dominating the business environment [1] Group 1: Manufacturing Sector Performance - In July, new orders reported by factories showed almost no change, indicating stagnation in demand [1] - Raw materials and finished goods inventories decreased, suggesting a shift in inventory management as previous stockpiling due to tariff fears has peaked [1] - Employment numbers declined as factories reduced workforce in response to rising costs and decreasing sales [1] Group 2: Economic Pressures - Input prices continued to rise significantly, with higher costs likely being passed on to customers, contributing to persistent sales price inflation in July [1] - There are indications that price pressures may have peaked in June, providing a potential easing in future inflation [1] - Factory confidence for the upcoming year has been negatively impacted, primarily due to weakened customer demand, especially in export markets, and inflationary pressures from tariffs [1]

Group 1 - Copper prices are under pressure due to concerns over tariffs, with LME copper closing down 0.69% at $9,784 per ton and Shanghai copper futures settling at 79,390 CNY per ton [1] - LME copper inventory increased by 2,125 tons to 97,400 tons, with a cancellation rate rising to 37.9% [1] - Domestic copper social inventory rose by over 10,000 tons week-on-week, while bonded zone inventory saw a slight decrease [1] Group 2 - Zinc prices also declined, with the Shanghai Zinc Index falling 1.41% to 22,049 CNY per ton, and LME zinc dropping $50 to $2,695.5 per ton [1] - Domestic zinc social inventory increased slightly to 89,100 tons, indicating a higher supply of zinc ore and expectations for increased zinc ingot availability [1] - The cash-to-three-month structure for LME zinc is declining, putting additional pressure on zinc prices [1]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The copper price is under pressure of phased shock adjustment due to factors such as the delay of interest - rate cut expectations and uncertain trade situations, with the domestic refined copper production expected to remain high in July and downstream demand being weak [1]. - The aluminum price is expected to fluctuate and consolidate. Although the aluminum ingot inventory is at a low level, the supply of aluminum ingots is expected to increase, and downstream demand is in the off - season, so the inventory accumulation in July may be higher than last year [3]. - The lead price shows a relatively strong trend, but the increase of Shanghai lead is expected to be limited under the suppression of weak domestic consumption [4]. - The zinc price is under pressure to decline because of high expectations of zinc ingot supply, significant inventory accumulation, and the ebb of the commodity bullish atmosphere [5]. - The tin price is expected to fluctuate within a certain range. There is a short - term shortage of tin ore supply, but the downstream's acceptance of high - price raw materials is limited [6][7]. - The nickel price has limited upward space. With the supply exceeding demand, it is recommended to short at high prices [8]. - The lithium carbonate price has limited upward space. The supply - demand relationship has not changed significantly, and attention should be paid to the return to the fundamentals after the range - bound trading [10]. - The alumina futures price is expected to be anchored by cost. It is recommended to short at high prices considering the overall commodity market sentiment [12]. - The stainless - steel market is expected to remain weak in the short term due to the off - season of consumption and slow inventory reduction [14]. - The price of cast aluminum alloy has strong upward resistance. Under the off - season background, the supply and demand are both weak, and the price mainly follows the cost end [16]. Summary by Metals Copper - Yesterday, LME copper closed down 0.69% to $9784/ton, and SHFE copper closed at 79390 yuan/ton. LME inventory increased by 2125 to 97400 tons, and the proportion of cancelled warrants rose to 37.9%. In China, the social inventory of electrolytic copper increased by more than 10000 tons over the weekend, and the bonded - area inventory decreased slightly. The import of domestic copper spot suffered a loss of about 1100 yuan/ton [1]. Aluminum - Yesterday, LME aluminum closed down 1.31% to $2563/ton, and SHFE aluminum closed at 20490 yuan/ton. The domestic aluminum ingot social inventory increased, and the aluminum bar inventory also increased. The aluminum rod processing fee rebounded, but the spot trading was still not smooth. LME aluminum inventory increased by 0.7 million tons to 37.1 million tons, and the proportion of cancelled warrants dropped to 2.2% [3]. Lead - On Monday, the SHFE lead index closed down 0.48% to 17212 yuan/ton, and LME lead 3S fell 19 to $2043.5/ton. The domestic social inventory slightly increased to 5.48 million tons. The primary supply is at a high level, the secondary supply is in short supply, and the lead - acid battery price has stopped falling and stabilized [4]. Zinc - On Monday, the SHFE zinc index closed down 1.41% to 22049 yuan/ton, and LME zinc 3S fell 50 to $2695.5/ton. The domestic social inventory increased slightly to 8.91 million tons. The supply of zinc ore is at a high level, and the TC is rising [5]. Tin - On July 7, 2025, the tin price fell with the non - ferrous sector. The SHFE tin main contract closed at 263520 yuan/ton, down 1.40%. The domestic supply of tin ore is in short supply in the short term, and the terminal demand is in the off - season [6][7]. Nickel - On Monday, the SHFE nickel main contract closed at 120540 yuan/ton, down 1.41%, and the LME main contract closed at $15130/ton, down 0.85%. The supply of nickel exceeds demand, and it is recommended to short at high prices [8]. Lithium Carbonate - The MMLC spot index of lithium carbonate was flat with the previous day. The LC2509 contract closed at 63660 yuan, up 0.60%. The supply - demand relationship has not changed significantly, and the upward space is limited [10]. Alumina - On July 7, 2025, the alumina index rose 0.15% to 3028 yuan/ton. The spot price in each region remained unchanged. The import window is closed. It is recommended to short at high prices considering the overall commodity market sentiment [11][12]. Stainless Steel - On Monday, the stainless - steel main contract closed at 12640 yuan/ton, down 0.71%. The social inventory decreased to 115.68 million tons, with a month - on - month increase of 0.20%. The market is expected to remain weak in the short term [14]. Cast Aluminum Alloy - As of Monday afternoon, the AD2511 contract closed down 0.78% to 19750 yuan/ton. The social inventory of recycled aluminum alloy ingots in Foshan, Ningbo, and Wuxi increased to 2.27 million tons. The price has strong upward resistance [16].

Group 1 - UBS's emerging markets strategist Xingchen Yu recommends strategic investment in Chinese stocks due to improving fundamentals, existing and potential policy support, and long-term growth prospects in artificial intelligence [1] - UBS maintains an "attractive" rating on Chinese tech stocks, highlighting their potential for further upside compared to their U.S. counterparts, which still have attractive valuations [1] - Sunil Tirumalai, UBS's chief strategist for global emerging market equities, believes the worst is over for emerging markets, although corporate earnings expectations have not yet been adjusted for U.S. tariff impacts [1] Group 2 - Chinese stocks exhibit greater resilience in profitability compared to other emerging markets, with earnings forecast downgrades being significantly smaller [2] - The valuation of the Chinese stock market is currently below its historical levels, while other emerging markets are at or above historical valuation levels [2] - There is a positive trend with retail investors returning to the market, evidenced by strong performance in the H-share market driven by domestic capital inflows [2]