Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - Macro factors are causing increased market volatility, with external market sentiment significantly affecting the domestic market. It is expected that the high level of hot metal production will be difficult to sustain. The main contract of coke is expected to move in a volatile manner [8]. 3. Summary by Directory 3.1. Weekly Highlights - **Macro**: From July 14 - 15, the Central Urban Work Conference emphasized the transition of urban development to the "stock quality - improvement and efficiency - enhancement stage". The China National Coal Association called for industry self - discipline. In 2025, Jiangsu plans to increase the proportion of short - process steelmaking, and coal consumption is expected to decline by about 5% compared to 2020. Overseas, Trump announced a tariff agreement with Indonesia, and the US PPI in June increased by 2.3% year - on - year [8]. - **Supply and Demand**: The raw material prices are rising, and hot metal production remains at a high level. Coal mines have strong price - holding intentions. Currently, hot metal production has increased. Nationwide, 30 independent coking plants have an average loss of 43 yuan per ton of coke. The market is mainly dominated by the weak reality in the off - season [8]. - **Technical Analysis**: The weekly K - line of the main coke contract is below the 60 - day moving average, indicating a bearish trend [8]. - **Strategy**: Due to enhanced macro - level disturbances and obvious spill - over effects of market sentiment, it is advisable to treat the main coke contract as moving in a volatile manner [8]. 3.2. Futures and Spot Market - **Futures Market**: As of July 18, the contract position decreased by 912 lots compared to the previous period, and the coke inter - month spread increased by 16.50 points. The registered warehouse receipts increased by 670 lots, and the futures rebar - coke ratio increased by 0.01 [12][17]. - **Spot Market**: As of July 17, the coke flat - price at Rizhao Port remained unchanged, while the ex - factory price of coking coal in Inner Mongolia increased by 20 yuan per ton. As of July 18, the coke basis decreased by 22.00 yuan/ton [25]. 3.3. Industry Chain Situation - **Coking Industry**: The average loss per ton of coke for 30 independent coking plants nationwide is 43 yuan/ton. The capacity utilization rate of 230 independent coking enterprises is 72.90% (up 0.18%), and the daily coke output is 51.41 tons (up 0.12 tons) [31][33]. - **Downstream**: The daily hot metal output of 247 steel mills is 242.44 tons, an increase of 2.63 tons from last week. As of July 11, the total coke inventory increased by 15.08 tons [37]. - **Inventory Structure**: Port inventories decreased, while steel mill inventories increased. The inventory of 16 ports for imported coking coal decreased by 0.29 tons, and the inventory of 18 ports for coke decreased by 2.97 tons. The coke inventory of 247 steel mills increased by 1.19 tons [41]. - **Fundamental Data**: In June, China's coke exports decreased by 41.3% year - on - year, and the cumulative exports from January to June decreased by 27.9%. Steel exports in June were 967.8 tons, a month - on - month decrease of 8.5%, and the cumulative exports from January to June increased by 9.2% year - on - year [45]. - **Housing Market Data**: In June, the housing price index of second - hand houses in 70 large and medium - sized cities decreased by 0.30% month - on - month. As of the week of July 13, the commercial housing transaction area in 30 large - and medium - sized cities decreased by 35.98% month - on - month [48].

Core Insights - The report indicates that urbanization in China is transitioning from a rapid growth phase to a stable development phase, emphasizing a shift from large-scale incremental expansion to a focus on improving existing stock and efficiency [1][2][8] - The emphasis on "high-quality urban renewal" suggests a move away from large-scale demolitions towards enhancing urban functionality and quality [1][2][9] - The report highlights the importance of integrated planning involving population, industry, urban areas, and transportation to optimize urban spatial structure [1][2][7] Industry Overview - The total number of stocks in the industry is 256, with a total market capitalization of 2,792 billion and a circulating market capitalization of 2,643.8 billion [3] - The absolute performance over 1 month, 6 months, and 12 months is 3.2%, 5.8%, and 35.2% respectively, while the relative performance is -0.9%, -0.1%, and 19.6% [5] Urban Renewal and Development - The report notes a significant change in the approach to urban renewal, focusing on quality improvements rather than extensive demolition [2][7][9] - The mention of "steady progress in the renovation of urban villages and dilapidated housing" indicates a more cautious and structured approach to urban renewal [1][2][9] Real Estate Development Model - The report suggests that there will be a continued push towards establishing a new model for real estate development, consistent with previous governmental statements [1][2][7] - The focus on optimizing the quality of land supply and urban planning is expected to create new opportunities in the real estate sector [1][2][7] Investment Opportunities - The report identifies potential investment opportunities in companies with capabilities in managing existing assets, such as China Resources Land, China Merchants Shekou, and China Overseas Development [8][10] - Companies involved in urban governance and public services, such as China Resources Vientiane Life and Poly Property, are highlighted as potential investment targets [8][10] - The report also suggests looking into sectors related to urban renewal, including inspection and testing, decoration, construction, and building materials for pipeline upgrades [8][10]

Core Insights - The central urban work conference held on July 14-15 marks the first high-level meeting on urban development in nearly a decade, indicating a shift in China's urbanization strategy from rapid growth to stable development [1][2] - The meeting emphasizes the need for urban development to focus on improving existing urban stock rather than expanding new construction, highlighting a transition from "big infrastructure" to "big renewal" [2][3] Summary by Categories Urbanization Trends - China's urbanization rate increased from 53.1% in 2012 to 67% by the end of 2024, with over 944 million people living in urban areas [2] - The number of cities in China has risen to 694, but the pace of urbanization growth has slowed since 2021, indicating a transition to a stable development phase [2] Development Goals - The conference set forth the goal of building a modern, innovative, livable, beautiful, resilient, civilized, and smart city, expanding on previous goals of creating livable and resilient cities [3][4] - The six aspects of urban development goals are interconnected, addressing the need to balance technological advancement with the quality of life for citizens [3][4] Key Tasks for Urban Development - Seven key tasks were outlined, with the optimization of the modern urban system being the top priority, focusing on enhancing the capacity of cities to support population and economic growth [5][6] - The tasks include fostering vibrant innovation cities, creating comfortable and convenient living environments, developing green and low-carbon cities, ensuring safety and resilience, promoting moral and civilized urban spaces, and establishing efficient smart cities [6][7] Collaborative Development - The future urban development strategy emphasizes regional collaboration, moving away from isolated city competition to coordinated development among cities and rural areas [5][6] - The focus will be on creating modern urban clusters and metropolitan areas that leverage the unique characteristics and needs of different cities [7]