Trade Data Overview - In May, China's exports amounted to a year-on-year increase of 4.8%, below the expected 6.2% and previous value of 8.1%[3] - Imports decreased by 3.4% year-on-year, significantly lower than the expected increase of 0.3%[8] Trade Slowdown Signals - The slowdown in trade is indicated by three main factors: 1. Preceding demand from the U.S. led to a front-loading of imports, which has since declined significantly since May[4] 2. The weakening of demand from the U.S. has reduced the support from ASEAN and Latin America for Chinese exports, with a marginal decline of 2.4 percentage points in export growth to these regions[6] 3. The negative year-on-year change in imports reflects the need for domestic demand recovery, which remains insufficient[5] U.S.-China Trade Dynamics - China's exports to the U.S. saw a further decline of 34.5% year-on-year, contrasting sharply with rising container shipping rates, indicating a lag in the impact of tariff adjustments[5] - The tariff "de-escalation" effects on U.S.-China trade have not yet fully manifested in May's data, suggesting potential improvements in June[5] Sector-Specific Insights - The export growth of mechanical and high-tech products has been consistently slowing, with integrated circuits benefiting from tariff exemptions[6] - The overall structure of exports is becoming increasingly differentiated, with significant variations in performance across different product categories[18] Domestic Demand and Import Trends - Domestic demand remains weak, as reflected in the CPI data, which shows a further drag from consumer goods compared to April[21] - The decline in imports is indicative of the ongoing challenges in domestic consumption recovery, with May's import figures falling short of expectations[8]

Export Data Analysis - In May, China's export amount decreased by 4.8% year-on-year, below the expected 6.2% and previous value of 8.1%[4] - Exports to the United States saw a significant decline, with a year-on-year drop of 34.5%[5] - The combined export growth to ASEAN and Latin America was only 2.9%, a decrease of 2.4 percentage points from the previous month[5] Import Data Insights - Imports fell by 3.4% year-on-year, significantly lower than the market expectation of a 0.3% increase[7] - The decline in imports reflects ongoing challenges in domestic demand recovery, as indicated by the worsening impact on consumer prices[6] Market Dynamics - The slowdown in U.S. import demand has negatively affected China's export momentum, particularly to ASEAN and Latin America[5] - The global manufacturing new orders index dropped to 49.1%, indicating a contraction in manufacturing activity[5] Structural Changes in Exports - There is a noticeable structural differentiation in export categories, with mechanical and high-tech products experiencing a continuous slowdown in growth rates[6] - Specific categories like integrated circuits have temporarily benefited from tariff exemptions, showing resilience amidst broader declines[6]

Group 1 - The market showed a positive trend last week, with major indices rising, particularly the ChiNext Index leading the gains [2] - Economic recovery is expected to continue in the second quarter, supported by a gradual improvement in exports following tariff reductions [3] - The manufacturing PMI increased by 0.5 percentage points to 49.5% in May, indicating a slight recovery in production and demand [3] Group 2 - Domestic demand is anticipated to become the core driver of economic growth in the second half of the year, especially as real estate sales show signs of weakness [4] - Government bond issuance has accelerated, with net financing reaching 6.4 trillion yuan from January to May, exceeding the same period last year by 3.7 trillion yuan [4] - The U.S. job market remains resilient, with May non-farm payrolls increasing by 139,000, surpassing expectations [5] Group 3 - The employment data in the U.S. alleviates recession concerns and supports the Federal Reserve's cautious stance on interest rates [5] - The overall economic environment is stabilizing, with limited downside risks due to the gradual recovery and support from policies [7] - Short-term market sentiment may be positively influenced by upcoming discussions between U.S. and Chinese leaders [7]

Report Industry Investment Ratings - Crude Oil: ★☆★ [1] - Fuel Oil: ★★★ [1] - Low-Sulfur Fuel Oil: ★☆☆ [1] - Asphalt: ★★★ [1] - Liquefied Petroleum Gas: ☆☆☆ [1] Core Viewpoints - Crude oil prices are expected to have a downward central tendency, with Brent in the range of $57 - $70 per barrel, WTI in the range of $51 - $67 per barrel, and SC in the range of 430 - 510 yuan per barrel. Attention should be paid to reverse operations or option buying opportunities at the boundary of the range [1]. - Low-sulfur fuel oil is expected to continue to strengthen unilaterally, but the strong continuity of LU cracking is limited in the medium term [2]. - The asphalt cracking spread faces the pressure of falling from a high level [3]. - The LPG futures price will oscillate at a low level under supply pressure [4]. Summary by Related Catalogs Crude Oil - The absolute price of crude oil has a corrective rebound driven by the macro - theme of the unexpected downgrade of Sino - US tariffs, but the monthly spread and spot premium/discount are weak [1]. - Global oil inventories increased by 2.2% in Q1 and an additional 1% since Q2, with crude oil inventories increasing by 1.3% and refined oil inventories increasing by 0.4% [1]. - OPEC+ has entered a rapid production - increasing cycle, and there are optimistic signals from the US - Iran nuclear negotiation and Russia - Ukraine peace talks, weakening supply sanctions risks [1]. Fuel Oil & Low - Sulfur Fuel Oil - Today, fuel - related futures have strengthened, with LU performing stronger than FU [2]. - High - sulfur fuel oil faces supply - side negatives under OPEC+ production increase, and high FU cracking valuations suppress refinery crude demand, so FU cracking faces the pressure of falling from a high level [2]. - Low - sulfur fuel oil has relatively low valuations and seasonal growth in ship - refueling demand, with strengthening spot discounts and monthly spreads [2]. Asphalt - Asphalt follows the upward trend of crude oil, but the increase is smaller than that of crude oil [3]. - Refinery production of asphalt has increased, and the market's stocking demand has declined after the holiday. The weekly asphalt shipment volume is 343,000 tons, a decrease of 95,000 tons compared to the previous week [3]. - As of May 12, the inventory of 54 sample refineries increased by 40,000 tons to 921,000 tons, and the inventory of 104 sample social warehouses decreased by 14,000 tons to 1,903,000 tons, with the overall inventory level rising [3]. Liquefied Petroleum Gas - Middle - East exports have increased, and the price difference between LPG and naphtha has risen recently, making international market purchases more cautious and overseas prices weaker [4]. - The gross profit of PDH is still at a low level under the high domestic arrival cost, and the operating rate dropped below 60% last week. Attention should be paid to the resumption of production after the cancellation of tariffs [4]. - The domestic price has been lowered due to the impact of concentrated imports and seasonal pressure, and the rebound of crude oil has limited support for the futures market sentiment [4].