1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Market has likely fully priced in policy expectations. In May 2025, both reserve requirement ratio cuts and interest rate cuts were fully implemented, and with a 90 - day exemption for Sino - US tariff issues, Q2 economic data may be good. There is little possibility of the market trading monetary policy easing in the short term. Fiscal policy is adopting a "debt resolution + development" dual - wheel drive strategy, and the synergy between fiscal and monetary policies will likely continue. For real estate policies, although comprehensive stimulus measures have been introduced, the key lies in the substantial recovery of consumer demand, and the policy transmission efficiency may be in the stage from "quantitative change" to "qualitative change" [5][38]. - In 2025, an abundant liquidity environment will be maintained. Since 2025, the monetary policy's statement on liquidity has changed from "maintaining reasonable and abundant liquidity" to "maintaining abundant liquidity". After correcting the bond market's over - reaction in Q1, the money market was relatively loose in Q2. The central bank ensured market liquidity through various measures during special periods. With the downward trend of bank - based fund lending last week, the central bank may use outright reverse repurchases to ease market liquidity next week [5][39]. - The supply shock in Q3 may be relatively controllable. The net financing rhythm of national debt in 2025 is faster than the same period. As of July 11, its net financing accounted for 56.66% of the whole year. Local debt supply may impact the market, and the new special bond issuance scale in Q3 may be large. However, due to the market's increased adaptability to supply shocks and the alleviation of the pumping effect by accelerated fiscal expenditures, fiscal supply may not be the core factor causing the bond market to weaken [5][40]. - In 2025, external interference factors have increased, but the impact of tariffs on pricing has marginally weakened. Although the external environment is more complex, the RMB exchange rate has stabilized after the Fed's interest rate cuts. The impact of tariffs on the domestic market's pricing may become dull, and the constraints of overseas factors on the bond market will be better than previous years [7][43]. - The traditional factors causing the "seasonal weakness" of the bond market in Q3 may have limited impact on the Q3 2025 bond market. Currently, the market trading sentiment is active. With institutions like state - owned banks and rural commercial banks supporting the market and the possible decline of insurance companies'预定利率 in Q3, the bond market may show a trend of "easy to fall, hard to rise". But the downward space of long - term interest rates may need more factors to catalyze. The investment portfolio of "short - term credit + long - term local bonds" can be considered for allocation, and the 10 - year and 30 - year treasury bond active bonds can be selected for trading [7]. 3. Summary According to Relevant Catalogs 3.1 "Seasonal Weakness" of the Bond Market in Q3 - From 2021 - 2024, the bond market in Q3 showed intensified fluctuations. From 2021 - 2023, it presented a typical "V - shaped" trend, while in 2024, it had multiple staged rebounds in a downward trend [2][11]. - In 2021, the bond market in Q3 had a "first down, then up" pattern, affected by "RRR cut driving interest rates down → economic data and policy expectation correction → supply pressure disturbance" [2][12]. - In 2022, the core logic of the bond market's weakness in Q3 was "economic expectation improvement + marginal tightening of the money market + Fed's interest rate hikes" [2][19]. - In 2023, the bond market in Q3 was mainly affected by "exchange rate pressure + neutral liquidity + stabilization of the fundamentals", leading to increased volatility [2][29]. - In 2024, the core driving factor for the multiple staged rebounds of the bond market in Q3 was "policy expectation changes" [2][33]. 3.2 Traditional Factors May Have Limited Impact on Q3 2025 Bond Market - Market has fully priced in policy expectations. Monetary policy easing is unlikely to be traded in the short term. Fiscal and real estate policies are in a stage of effectiveness accumulation [5][38]. - An abundant liquidity environment will be maintained. The central bank will ensure market liquidity through various measures, and may use outright reverse repurchases next week [5][39]. - Supply shock in Q3 may be controllable. National debt net financing rhythm is faster, and local debt supply may impact the market, but overall, fiscal supply may not be the core factor for the bond market's weakness [5][40]. - External interference factors have increased, but the impact of tariffs on pricing has weakened. The RMB exchange rate has stabilized, and the constraints of overseas factors on the bond market will be better [7][43]. 3.3 Important Matters - In June 2025, CPI turned from a decline to an increase year - on - year, mainly due to the recovery of industrial consumer goods prices. PPI continued to decline year - on - year [44]. - The Ministry of Finance extended the assessment cycle of state - owned commercial insurance companies' performance indicators, adjusting the "net asset yield" assessment method [45]. 3.4 Money Market - Last week, the central bank's net open - market reverse repurchase operation was - 226.5 billion yuan, and 100 billion yuan of MLF will mature next week. The money market was relatively loose, with DR001 below the policy rate [46][47]. - In the inter - bank certificate of deposit (NCD) market, city commercial banks had the largest issuance scale last week. Except for rural commercial banks, other commercial banks were net lenders. The term spread between 1Y and 3M NCD issuance rates widened, and the 1Y state - owned bank NCD issuance rate reached around 1.6% [46][59]. 3.5 Bond Market - At the beginning of July, the issuance and net financing of national debt were stable, while local debt net financing was slow. New 20 - year and 30 - year special treasury bonds will be issued next week [67]. - Last week, the bond market was in an adjustment stage under the stock - bond seesaw effect. The yield spreads of 1 - year, 3 - year, 5 - year, 7 - year, 10 - year, and 30 - year treasury bonds and national development bank bonds changed, and the implied tax rate of 10 - year national development bank bonds increased slightly [78]. - The liquidity premium of the 10 - year treasury bond active and sub - active bonds returned to 2 - 3BP. The term spread of 10 - 1 year treasury bonds narrowed slightly, and the long - term and ultra - long - term treasury - local bond spreads narrowed [81][85][88]. 3.6 Institutional Behavior Tracking - Last week, the scale of leveraged trading decreased but remained at around 8 trillion yuan. In the cash bond market, state - owned banks and rural commercial banks increased their positions, while securities firms and funds reduced their positions [92][101]. - In May 2025, the overall leverage ratio of institutions in the inter - bank market was basically flat month - on - month and slightly increased year - on - year [92].

Report Summary 1) Report Industry Investment Rating No investment rating information is provided in the report. 2) Core Viewpoints of the Report - **Rebar**: The main contract price fluctuates. Supply is rising while demand remains seasonally weak, keeping steel prices under pressure. However, low inventory eases immediate contradictions. Short - term, it will likely stay in low - level oscillations. Monitor steel mill production [4][38]. - **Hot - rolled coil**: The main contract price also fluctuates. Supply is at a high level, and although demand shows some improvement, its sustainability is uncertain. It will likely continue to oscillate at a low level, with demand being the key factor to watch [4][38]. - **Iron ore**: The main contract price is strongly oscillating. Demand has improved slightly, but supply is high, and the improvement in demand may not last. The price is expected to oscillate, with the performance of finished products being a key factor [4][39]. 3) Summary by Relevant Catalogs Industry Dynamics - **Power Industry**: From January to May, grid project investment reached 204 billion yuan, a 19.8% year - on - year increase. Total installed power generation capacity was 3.61 billion kilowatts, with solar and wind power showing significant growth [6]. - **Construction Industry**: The total new contract value of the top five construction central enterprises in the first five months exceeded 2.9 trillion yuan. China State Construction ranked first, with infrastructure business growing rapidly [7]. - **Iron Ore Mining**: Three new iron ore mining areas in Goa, India, were approved for operation, with different companies winning the mining rights and having various production capacities [8]. Spot Market - **Steel Products**: Rebar prices in Shanghai, Tianjin, and the national average, hot - rolled coil prices in Shanghai, Tianjin, and the national average, and prices of Tangshan billet and Zhangjiagang heavy scrap are presented, along with their price changes. The spread between hot - rolled coil and rebar is 130 yuan, and the spread between rebar and scrap is 940 yuan [9]. - **Iron Ore**: The price of 61.5% PB powder at Shandong ports, Tangshan iron concentrate, sea freight, SGX swaps, and the Platts Index are provided, along with their price changes [9]. Futures Market - **Rebar**: The closing price of the active contract is 2,995 yuan, with a daily increase of 0.03%. Trading volume decreased by 437,662 lots, and open interest decreased by 6,206 lots [13]. - **Hot - rolled coil**: The closing price of the active contract is 3,112 yuan, with a daily decrease of 0.16%. Trading volume decreased by 184,500 lots, and open interest increased by 28,968 lots [13]. - **Iron ore**: The closing price of the active contract is 706.0 yuan, with a daily increase of 0.50%. Trading volume decreased by 137,710 lots, and open interest increased by 4,370 lots [13]. Relevant Charts - **Steel Inventory**: Charts show the weekly changes and total inventory of rebar and hot - rolled coil [15][16][18]. - **Iron Ore Inventory**: Charts present the inventory of 45 ports, 247 steel mills, and domestic mines, as well as their seasonal and monthly changes [20][25][27]. - **Steel Mill Production**: Charts display the blast furnace operation rate, capacity utilization rate, and profitability of 247 sample steel mills, as well as the operation rate of 87 independent electric furnaces and the profit - loss situation of 75 building material independent arc - furnace steel mills [30][33][35]. Market Outlook - **Rebar**: Supply is rising while demand is seasonally weak. Although inventory is low, steel prices will continue to face pressure and oscillate at a low level [38]. - **Hot - rolled coil**: Supply is high, and demand shows some improvement but its sustainability is uncertain. It will likely continue to oscillate at a low level [38]. - **Iron Ore**: Demand has improved slightly, but supply is high, and the improvement in demand may not last. The price is expected to oscillate [39].