1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - From January 5th to February 6th, the main contract of urea futures presented a game pattern of "high supply and off - season demand", with a fluctuation range of 1756 - 1830 yuan/ton. In the short term, affected by weak pre - holiday demand and abundant supply, the futures price may fluctuate. In the long run, the expectation of Indian tenders, the start of spring plowing fertilizer preparation, and the inventory depletion trend will provide support, and the price center is expected to gradually move up. Attention should be paid to the implementation of export orders and the recovery rhythm of agricultural demand [2] 3. Summary According to Relevant Catalogs 3.1 Futures Market - The main contract of urea showed a "first decline then rise" trend this month. It declined in early January due to increased supply, rebounded in mid - January with inventory depletion, and fell since February due to weakening pre - holiday demand. The capital sentiment was cautious. The spot premium pattern was stable, and the basis fluctuated slightly. The basis was significantly repaired compared with the average in January, indicating stronger support on the spot side [3] 3.2 Influencing Factors - **Supply side**: The production remained at a high level, and the operating rate increased steadily. On February 4th, the daily output was 20.99 tons, rising to 21.40 tons on February 5th, a year - on - year increase of 1.57 tons (+7.9%). The average operating rate in January was 85.78%, 2.56 percentage points higher than the same period last year. On February 4th, the operating rate reached 89.14%, a new high for the year. The supply pressure was difficult to ease in the short term [5][6] - **Demand side**: It was the end of pre - holiday stockpiling, and regional price differentiation occurred. The top - dressing of winter wheat in the north was gradually ending, the number of advance orders of enterprises decreased, and there was resistance to high - priced purchases. The operating rate of compound fertilizer enterprises remained low, the demand for melamine recovered but the volume was small. Overall, downstream purchases were mainly for rigid needs, and new orders were scarce [6] - **Inventory**: The factory inventory continued to decline, and the port inventory was at a low level. As of February 4th, the urea enterprise inventory was 91.85 tons, a decrease of 2.63 tons (-2.79%) from the previous week, with an 8 - week consecutive decline and a year - on - year decrease of 53.16 tons. The port inventory was 17.2 tons, remaining at a low level, and export shipments were mainly based on previous orders [6] - **Import and export**: The export resilience remained, and the expectation of Indian tenders increased. In 2025, the cumulative export was 489.35 tons, a year - on - year increase of 1678.3%. In December, the export was 27.83 tons, maintaining high - level prosperity. The market expected that India might announce a new round of import tenders in February (with a scale of about 1.5 million tons), and the international price was rising, so the export window was expected to open [6] 3.3 Associated Variety Linkage - **Coal and crude oil**: Coal - based urea accounted for more than 70%, and the price fluctuation of thermal coal directly affected the production cost. The average WTI crude oil price in January was 58.4 US dollars per barrel, and the rising energy cost provided bottom - line support for urea [7] - **Compound fertilizer**: The operating rate of compound fertilizer enterprises was positively correlated with the urea purchase volume. The compound fertilizer production in January increased by 3.2% year - on - year, but short - term demand was difficult to expand due to the end of pre - holiday stockpiling [7] - **International urea**: The FOB price in Egypt rose from 452.51 US dollars per ton on January 8th to 477.51 US dollars per ton on January 29th, a rise of 5.5%. The high international price might drive domestic exports and spot sentiment [7] 3.4 Market Outlook - In 2026, the new production capacity was limited, and the elimination of old production capacity accelerated, with the annual supply growth rate likely to drop below 3%. From March to July was the peak season for domestic spring plowing fertilizer use, and the agricultural demand in the second quarter was expected to increase by 15% - 20% quarter - on - quarter, which would support the price center to rise. If the Indian tender in February was successfully implemented, the export volume was expected to rebound to over 500,000 tons. The traditional maintenance season of gas - based urea enterprises (February - March) might lead to a short - term supply contraction, and coal price fluctuations needed continuous attention. In the short term, the urea futures were suppressed by high supply and weak pre - holiday demand, and the futures price might fluctuate in a range. In the medium and long term, the results of Indian tenders, the progress of spring plowing fertilizer preparation, and the inventory depletion speed needed to be tracked [9]

PMI Overview - December manufacturing PMI increased to 50.1%, up from 49.2% in November[1] - The production index rose to 51.7%, an increase of 1.7 percentage points from the previous value of 50.0%[1] - New orders index improved to 50.8%, up from 49.2%[1] - New export orders index increased to 49.0%, compared to 47.6% previously[1] Influencing Factors - Year-end factors contributed to a rise in construction PMI to 52.8%, up 3.2 percentage points from 49.6%[4] - Seasonal effects led to a strong production index at 51.7%, marking the highest for the quarter[5] - External demand showed resilience with the new export orders index at 49.0%, indicating a recovery in exports[6] Price and Inventory Insights - December's PMI factory price index was 48.9%, slightly up from 48.2%, remaining below the neutral line[2] - The main raw materials purchase price index stood at 53.1%, above the neutral line, indicating ongoing high demand[2] - Inventory indicators showed signs of replenishment, with the purchasing index at 51.1%, up from 49.5%[23] Economic Outlook - Manufacturing activity expectations index rose to 55.5%, up from 53.1%, reflecting improved sentiment[24] - Comprehensive PMI output index increased to 50.7%, indicating overall expansion in production activities[24]

Group 1: Liquidity and Market Conditions - The BCI small and medium enterprise financing environment index is at 47.15 for December 2025, a month-on-month decrease of 10.19% [4] - The M1 and M2 growth rate difference was -3.1 percentage points in November 2025, a month-on-month decrease of 1.10 percentage points [4] - The current price of London gold is $4,533 per ounce [4] Group 2: Infrastructure and Real Estate Chain - Weekly price changes include rebar at -1.20%, cement price index at -0.49%, rubber at +1.00%, coke at -3.40%, coking coal at -0.14%, and iron ore at -0.63% [5] - National blast furnace capacity utilization rate, cement, and asphalt operating rates changed by +0.01 percentage points, -0.90 percentage points, and -2.3 percentage points respectively [5] Group 3: Real Estate Completion Chain - The price of titanium dioxide increased by 0.77% week-on-week, while flat glass prices remained unchanged; the gross profit for titanium dioxide is -1,744 yuan per ton, and the operating rate for flat glass is 73.89% [6] Group 4: Industrial Products Chain - Major commodity price changes include cold-rolled steel at -0.51%, copper at +5.84%, and aluminum at +1.01%, with corresponding gross profit changes showing a turnaround to profit for some [7] - The national semi-steel tire operating rate is at 72.05%, an increase of 0.66 percentage points [7] Group 5: Subcategory Prices - The price of tungsten concentrate reached a new high since 2012 at 460,500 yuan per ton, an increase of 6.35% week-on-week [8] - The price of graphite electrodes is 19,000 yuan per ton, unchanged, with a gross profit of 2,060.56 yuan per ton, an increase of 1.98% [8] - The price of electrolytic aluminum is 22,060 yuan per ton, with a calculated profit of 4,918 yuan per ton (excluding tax), an increase of 6.72% [8] Group 6: Price Comparison Relationships - The price ratio of rebar to iron ore is 4.02 this week [10] - The price difference between hot-rolled and rebar steel is 10 yuan per ton [10] - The price difference between Shanghai cold-rolled and hot-rolled steel is 430 yuan per ton, a decrease of 20 yuan per ton [10] Group 7: Export Chain - The new export orders PMI for China in November is 47.60%, an increase of 1.7 percentage points month-on-month [11] - The CCFI comprehensive index for container shipping rates is 1,146.67 points this week, an increase of 1.95% [11] - The U.S. crude steel capacity utilization rate is 75.30%, a decrease of 1.20 percentage points [11] Group 8: Valuation Percentiles - The CSI 300 index increased by 1.95%, with the best-performing cyclical sector being chemicals at +4.23% [12] - The PB ratio of ordinary steel and industrial metals relative to the CSI 300 is 28.64% and 95.13% respectively [12] - The current PB ratio for the ordinary steel sector is 0.50, with a historical high of 0.82 reached in August 2017 [12]

Core Viewpoint - The report highlights the current state of various sectors, including liquidity, infrastructure, real estate, industrial products, and export chains, providing insights into price changes, production rates, and market conditions. Liquidity - The BCI small and medium enterprise financing environment index for November 2025 is 52.50, with a month-on-month increase of 0.17% [4] - The M1 and M2 growth rate difference in October 2025 is -2.0 percentage points, a decrease of 0.80 percentage points from the previous month [4] - The current price of London gold is $4,219 per ounce [4] Infrastructure and Real Estate Chain - Total inventory of five major steel varieties is at the highest level for the same period in four years [5] - Price changes this week include rebar up by 0.93% and cement price index up by 0.22%, while rubber decreased by 0.34% and coking coal by 3.14% [5] - National blast furnace capacity utilization rate, cement, and asphalt operating rates have changed by -0.60 percentage points, -1.27 percentage points, and +8.1 percentage points respectively [5] Real Estate Completion Chain - Prices of titanium dioxide and flat glass remain stable, with glass gross profit at -58 yuan/ton and titanium dioxide gross profit at -4,026 yuan/ton [6] - The operating rate for flat glass this week is 74.52% [6] Industrial Products Chain - Major commodity price changes this week include cold-rolled steel down by 0.25%, copper up by 1.77%, and aluminum up by 0.33% [7] - The gross profit for cold-rolled steel has turned from loss to profit, while the losses for other commodities have increased by 1.86% and 1.49% respectively [7] - The national semi-steel tire operating rate is 69.19%, a decrease of 1.88 percentage points [7] Subcategories - Tungsten concentrate prices have reached a new high since 2012, currently at 339,000 yuan/ton, with a week-on-week increase of 3.04% [8] - The price of graphite electrodes is 18,500 yuan/ton, with a gross profit of 1,357.4 yuan/ton, down by 17.59% [8] - The price of electrolytic aluminum is 21,430 yuan/ton, with estimated profit at 4,223 yuan/ton (excluding tax), up by 1.49% [8] Price Comparison Relationships - The price ratio of rebar to iron ore this week is 4.08 [10] - The price difference between hot-rolled and rebar steel is 40 yuan/ton, while the price difference between cold-rolled and hot-rolled steel is 490 yuan/ton, down by 50 yuan/ton [10] - The price ratio of stainless steel hot-rolled to electrolytic nickel is 0.11 [10] Export Chain - The new export orders PMI for China in October 2025 is 45.90%, a decrease of 1.9 percentage points [11] - The CCFI comprehensive index for container shipping rates is 1,121.80 points, down by 0.09% this week [11] - The capacity utilization rate for crude steel in the U.S. is 76.90%, an increase of 0.70 percentage points [11] Valuation Percentiles - The CSI 300 index has increased by 1.64%, with the best-performing cyclical sector being industrial metals, up by 3.46% [12] - The PB ratio of ordinary steel and industrial metals relative to the CSI 300 is 37.40% and 86.64% respectively [12] - The current PB ratio for the ordinary steel sector relative to the CSI 300 is 0.53, with the highest value since 2013 being 0.82 [12]

Core Viewpoint - PTA is currently supported by cost factors, with market focus on the execution of maintenance schedules and the recovery of export orders. The polyester futures prices are expected to remain supported due to cost boosts, domestic "anti-involution" policies, and improved export expectations from India [1] Cost Support - Cost support remains strong, with expectations of oversupply in oil from Q4 to Q1 next year, leading to a weak and fluctuating international oil price. The transmission of oil price changes to downstream industries is relatively mild due to low PTA processing fees [2][3] PX Supply and Demand - Domestic PX operating rates have slightly decreased to 86.8%, a drop of 3 percentage points. Asian PX operating rates are at 78.5%, down 1.7 percentage points. Several PX facilities in Asia are undergoing maintenance, tightening the PX spot market supply. The overall PX supply-demand balance is improving, supporting PTA costs [6] Inventory Pressure - PTA social inventory is approximately 3.1561 million tons, showing a slight accumulation. The inventory structure is reasonable, with polyester factories maintaining raw material stock for 13-14 days. The overall inventory level is lower than in the past two years, indicating limited inventory pressure [8] PTA and Polyester Production - By 2025, PTA production capacity is expected to reach 91.715 million tons, with a growth rate of 9.5%. The polyester industry is projected to maintain a high average operating rate of 88.29%, providing rigid demand support for PTA. However, weak weaving orders may lead to reduced purchasing intentions among polyester companies [11][13] Market Dynamics - The PTA market is currently facing a balance between cost support and demand suppression, with prices expected to fluctuate between 4500 and 4900 yuan per ton [11][13]

Summary of Key Points Core Viewpoint - The report highlights significant trends in liquidity, infrastructure, real estate, and industrial sectors, indicating a mixed economic outlook with specific areas of concern such as low PMI indices and fluctuating commodity prices. Group 1: Liquidity - The BCI small enterprise financing environment index for August 2025 is at 46.37, showing a month-on-month increase of 0.61% [4] - The M1 and M2 growth rate difference is at -2.8 percentage points in August 2025, with a month-on-month increase of 0.4 percentage points [4] - The current price of London gold is at $4018 per ounce [4] Group 2: Infrastructure and Real Estate Chain - The steel PMI index for September is at 45.2%, marking a six-month low [5] - Weekly price changes include rebar up by 0.62%, cement price index down by 0.89%, rubber down by 1.35%, coke up by 3.65%, coking coal up by 0.30%, and iron ore down by 1.01% [5] - The average daily crude steel output from key enterprises in late September decreased by 8.88% month-on-month [5] Group 3: Real Estate Completion Chain - Prices for titanium dioxide and glass increased by 0.77% and remained unchanged, respectively, while glass gross profit is at -58 yuan/ton and titanium dioxide gross profit is at -1082 yuan/ton [6] - The operating rate for flat glass this week is at 76.01% [6] Group 4: Industrial Chain - The operating rate for semi-steel tires is at a five-year low of 46.51%, down by 27.07 percentage points [7] - Major commodity price changes include cold-rolled steel down by 0.50%, copper up by 5.02%, and aluminum up by 0.91% [7] Group 5: Subcategories - The capacity utilization rate for electrolytic aluminum continues to reach historical highs [8] - The price of electrolytic aluminum is at 21020 yuan/ton, with a calculated profit of 3854 yuan/ton (excluding tax), up by 5.14% month-on-month [8] - The price of electrolytic copper is at 86830 yuan/ton, up by 5.02% [8] Group 6: Price Relationships - The price ratio of London spot gold to silver has reached a 14-month low [9] - The price ratio of rebar to iron ore is at 4.06 this week [9] - The price difference between hot-rolled and rebar steel is 140 yuan/ton, while the price difference between cold-rolled and hot-rolled steel is 440 yuan/ton, up by 50 yuan/ton [9] Group 7: Export Chain - The new export orders PMI for China in September 2025 is at 47.80%, with a month-on-month increase of 0.6 percentage points [10] - The CCFI comprehensive index for container shipping rates is at 1014.78 points, down by 6.68% [10] - The capacity utilization rate for U.S. crude steel is at 77.20%, down by 0.90 percentage points [10] Group 8: Valuation Percentiles - The CSI 300 index decreased by 0.51%, with the best-performing sector being industrial metals, up by 5.35% [11] - The PB ratio for ordinary steel and industrial metals relative to the CSI 300 is at 40.18% and 97.52%, respectively [11] - The current PB ratio for the ordinary steel sector is 0.54, with the highest value since 2013 being 0.82 [11]

Summary of Conference Call Records Industry Overview - The global export market is showing a divergent trend, with U.S. tariffs impacting labor-intensive products like sports shoes and toys, leading to order shifts to other countries. The high base from U.S. export rush in 2024 is affecting this year's performance [1][5] - The automotive industry is performing exceptionally well, driven by U.S. auto parts export rush and strong demand for new energy vehicles in emerging markets. Pure electric vehicle sales in Europe have increased by over 20%, and infrastructure demand in regions like Africa and Vietnam has boosted heavy machinery sales [1][6] - The medical device industry has seen a slowdown in growth to around 5%, primarily due to negative growth in the European market, although it remains higher than most industries. The rapid growth in the first half of the year (15%-20%) contributed to this slowdown [1][7] - In the current inflationary environment, government and institutional procurement decisions are significantly impacted, leading to delays in large equipment purchases and a reduction of over 18% in consumer electronics orders. However, upstream electronic components have shown slight growth [1][8] - The photovoltaic and lithium battery sectors have seen a narrowing decline in orders, with significant demand for lithium batteries in non-U.S. regions. Although shipments of photovoltaic components in Europe and North America have decreased, some growth has been maintained through rerouting via Southeast Asia to avoid tariffs [1][10] - The small tools and gardening tools market has experienced significant order growth due to promotions and increased brand recognition. New factory capacities in Vietnam may reduce exports of small tools from China [1][11] Key Insights - Over half of the companies reported an increase in export prices, primarily due to rising tariff costs, premium pricing for high-end products, and the introduction of new products that enhance value. Some companies are adopting a price-for-volume strategy to cope with competition [2][16] - In July and August, companies reported a year-on-year improvement in export orders, with the proportion of companies seeing improvement rising from about 55% to approximately two-thirds. Most industries, including consumer goods, machinery, and automotive, exceeded expectations, except for the photovoltaic and lithium battery sector [3][6] - The automotive sector is highlighted as the strongest performer, with a surge in orders due to export rush operations and robust demand for new energy vehicles in emerging markets [6] - The medical device sector's growth is slightly below seasonal expectations, with a year-on-year increase of about 5%, influenced by earlier rapid growth and recent negative trends in Europe [7] - The inflationary environment is causing significant impacts on procurement decisions, leading to a decline in overall order volumes, particularly in the consumer electronics sector [8] - The communication and IoT sectors are performing well due to increased demand for data centers and AR applications, with significant growth in orders for optical communication modules and related products [9] Additional Observations - The global machine tool market is experiencing a downward trend, with demand in Southeast Asia lagging while the U.S. sees a 20% growth due to manufacturing reshoring [13] - Strong demand for mining and port machinery is noted in South America and the Middle East, driven by high copper prices and new port constructions [14] - Companies are optimistic about Q4 2025, with about two-thirds expecting year-on-year order growth, particularly in the U.S. consumer electronics, data center construction, and light communication sectors [15] - The competitive environment is leading to a general decline in export prices for ordinary household appliances and daily necessities, particularly in the U.S. market [17] - The adjustment of the euro exchange rate has resulted in a 7% decrease in the price of automotive parts in the European market [18] - The structure of export orders is shifting, with most companies still focused on B2B sales, while C2C orders are primarily through cross-border e-commerce platforms [19] - The C2C online channel is growing rapidly, especially in the smart hardware and 3C electronics sectors, with annual growth rates reaching 20% [21] - U.S. tariff policies have led to a noticeable decline in overall orders since April, with significant impacts on industries like tires, photovoltaics, and automotive [22] - Overall, the survey reflects a marginal increase in growth, rising export prices, and rapid growth in C2C online channels, despite ongoing tariff challenges [23]

Economic Indicators - China's July Caixin/S&P Global Services PMI reached 52.6, exceeding expectations of 50.4 [1] - The Composite PMI registered 50.8 [1] - China's July S&P Global Manufacturing PMI came in at 49.5, below the anticipated 50.4 [2] Service Sector Performance - Service sector new business volume experienced a notable increase, marking a one-year high [1] - The improvement was attributed to enhanced basic demand and successful business expansion [1] - Foreign demand rebounded for the first time in three months, driven by increased tourism and stable trade conditions, leading to the highest export order growth since February [1] Manufacturing Sector Performance - China's manufacturing output experienced its second decline since October 2023 [3] - Surveyed companies attributed the production decrease to a slowdown in new order growth [3] - Manufacturers reported weak foreign demand, with new export orders contracting for the fourth consecutive month and at an accelerated pace compared to June [3] Cost Pressure - Average input costs continued to rise in July due to increased raw material, fuel, and payroll expenses [1]

Summary of PBOC Q2 Surveys Industry Overview - The report focuses on the banking and economic conditions in China as assessed by the People's Bank of China (PBOC) through its Q2 2025 surveys of bank loan officers, enterprises, and urban depositors [1][3]. Key Findings Loan Demand and Banking Conditions - Loan demand fell significantly in Q2 2025, with the index dropping to 56.1 from 58.5 in Q1 2025 [7] - Loan approval rates also decreased, with the index falling to 53.8 from 54.4 in Q1 2025, indicating tighter lending standards [7][13] - Bankers reported declining banking profits and anticipate a more accommodative monetary policy in the upcoming quarter [13] Business Conditions - The business conditions index for 5,000 surveyed enterprises remained unchanged at 49.2 in Q2 2025, indicating stagnant business sentiment [2][13] - Export orders saw a notable decline, with the index dropping to 42.1 in Q2 2025 from 46.8 in Q4 2024, while domestic orders remained stable [13] Urban Depositor Sentiment - Urban depositors expressed lower inflation expectations and a decline in current employment sentiment in Q2 2025 [13] - The net share of depositors expecting rising property prices decreased to -13.7% from -13.1% in Q1 2025, reflecting a pessimistic outlook on the property market [13] - The willingness to consume also fell, with only 22.6% of households indicating a desire to increase consumption, down from 24.1% in Q1 2025 [7][13] Additional Insights - The survey indicates ongoing deflationary pressures in the economy, as evidenced by the decline in raw materials purchasing price index and sales price index [13] - Households reported an increased willingness to save, rising from 62.6% to 64.3%, while the share wanting to invest slightly decreased [13] Conclusion - The PBOC's Q2 2025 surveys highlight a concerning trend in loan demand, business conditions, and consumer sentiment, suggesting potential challenges for the Chinese economy moving forward [1][13].

Core Insights - The article highlights a slight rebound in the prices of U.S. soybeans and corn, driven by positive signals from trade agreements, but emphasizes that the actual fulfillment of export orders is a critical variable for continued price increases [1] Group 1: Market Analysis - U.S. soybean and corn prices have shown a minor rebound [1] - Positive signals from trade agreements are influencing market sentiment [1] - The ability to convert trade agreements into actual export orders is essential for sustaining price growth [1]