1. Report Industry Investment Rating - The rating for rebar and hot-rolled coil is "Oscillation" [6] 2. Core Viewpoints of the Report - In the second quarter, the steel supply and demand fundamentals will continue to be in a game between relatively weak demand and relatively strong cost support. The core trading logic of the market lies in the macro - level, and the steel's own fundamentals lack obvious contradictions, increasing the operation difficulty. In the first half of the second quarter, steel prices may show an oscillating and strengthening pattern, but in the second half, if the conflict eases, market correction risks should be watched out for [3][88][89] 3. Summary by Relevant Catalogs 3.1 First - quarter Steel Market Review - In the first quarter of 2026, steel prices continued to fluctuate in a narrow range. The black industry chain showed a flat performance due to the lack of obvious improvement in terminal domestic demand and the suppression of steel prices by the increase in absolute inventory levels. The upward and downward price spaces were limited, resulting in a narrow - range oscillating pattern. The forward curves of rebar and hot - rolled coil were relatively flat, and the forward premium of rebar after the Spring Festival was lower than that of last year. The basis of rebar was relatively higher than in previous years, and the supply - side pressure of hot - rolled coil was greater [10] 3.2 Demand Changes are Limited, Focus on the Rhythm of External Demand 3.2.1 Domestic Demand Remains Stable, with Limited Expectations for Incremental Policies - After the Two Sessions in March 2026, it became clear that the domestic economy in 2026 would focus on stability, with limited incremental policy space. The GDP growth target was lowered, and the scale of fiscal policies such as the deficit rate, special treasury bonds, and local government special bonds remained the same as last year. The incremental funds for "two important" and "two new" aspects were also limited. Therefore, the outlook for steel domestic demand is not optimistic [19][20] 3.2.2 Real Estate Demand is Difficult to Improve, Infrastructure Focuses on Rhythm - Since the beginning of 2026, the second - hand housing market in first - tier cities has shown signs of a slight rebound, but the sustainability is to be observed. The improvement in the first - hand housing market is limited, and the year - on - year decline in real estate sales and new construction areas is still significant. For infrastructure investment, the incremental space depends on the participation of social capital. The fiscal policy shows a pre - set trend this year, and infrastructure investment in the spring is expected to support building material demand, but it may show a pattern of high in the front and low in the back [23][24] 3.2.3 The Decline in National Subsidies May Lead to a Decline in Manufacturing Domestic Demand - Since the fourth quarter of 2025, the production and sales of passenger cars and home appliances have declined due to the reduction of national subsidies. In early 2026, the recovery of national subsidies had limited impact on demand. The production and sales of passenger cars in January - February decreased year - on - year, and the inventory coefficient of car dealers increased. The demand for home appliances has slightly improved, but the improvement space is limited. However, the manufacturing export remains strong, and although the export to the Middle East is affected by the conflict, the long - term external demand is expected to remain strong [33][34] 3.2.4 Steel Exports are Slightly Better than Expected, and Structural Differentiation Intensifies - In early 2026, the direct exports of steel and semi - finished products were slightly better than expected. The implementation of the export license management system affected steel exports, with a year - on - year decrease in steel exports and an increase in billet exports. The export of plates decreased significantly, and the export to most regions declined. In March, the steel exports to the Middle East were affected by the Strait of Hormuz blockade. Although the short - term export is affected, the medium - term trend is not pessimistic [51][60][61] 3.3 Inventory Structural Contradictions Remain, and Cost Support is Strengthened 3.3.1 Geopolitical Conflicts Further Strengthen Cost Support - In the first quarter of 2026, with the slight resumption of hot metal production and the increase in energy prices, the profit of finished products declined again. The cost of the long - process steelmaking has been in a relatively stable and narrow - range oscillating pattern since the fourth quarter of last year. Even if the Strait of Hormuz is reopened, energy prices are unlikely to return to the pre - conflict low. If the domestic demand does not decline significantly in the second quarter, the upward risk of the cost side is higher than the downward risk [63][64][73] 3.3.2 The Total Inventory Contradiction is Controllable, and Structural Differentiation is Obvious - After the Spring Festival, the structural contradiction of finished product inventory is obvious, but the overall inventory pressure is not prominent. The inventory of five major varieties is slightly higher than that of the same period last year, mainly due to the low inventory of building materials. The inventory pressure of hot - rolled coil and cold - rolled coil is relatively obvious, and the inventory of non - five major varieties is also at a high level. High inventory mainly suppresses the upward space of steel prices, and the risk of negative feedback in the second quarter may come from the macro - level [74][75] 3.4 Second - quarter Steel Supply and Demand Outlook and Market Trading Logic - In the second quarter, the steel market will be in a game between weak demand and strong cost support. The energy price fluctuations caused by the Middle East situation and the market's expectations for the global economy will be important influencing factors. If a cease - fire agreement is reached in April, the upward space of steel prices will be limited; if not, there will be an obvious upward risk in supply and raw material costs. The core trading logic of the steel market in the second quarter lies in the macro - level, and the operation difficulty increases. In the first half of the second quarter, steel prices may be oscillating and strengthening, while in the second half, if the conflict eases, market correction risks should be watched out for [88][89]

Group 1: Report Industry Investment Rating - Unilateral investment ratings: Aluminum: Neutral; Alumina: Neutral; Aluminum alloy: Neutral. Arbitrage: Neutral [10] Group 2: Core Viewpoints - Aluminum prices have entered a wide - range oscillation period with unclear short - term drivers. The increase in absolute prices suppresses the restocking demand of downstream and traders. The social inventory of electrolytic aluminum will continue to accumulate rapidly, and the peak inventory during the Spring Festival is expected to reach 1.5 million tons. In the long - term, macro factors are the main logic for price increase [7] - For alumina, the supply - surplus situation remains unchanged, social inventory continues to increase, and the inventory problem is difficult to solve. The cost support is weak, and there has been no large - scale active production reduction by alumina plants [1][9] Group 3: Summary of Data Aluminum Spot - On February 5, 2026, the price of East China A00 aluminum was 23,340 yuan/ton, a change of - 420 yuan/ton from the previous trading day; the spot premium of East China aluminum was - 180 yuan/ton, a change of 30 yuan/ton from the previous trading day. The price of Central China A00 aluminum was 23,240 yuan/ton, and the spot premium changed by 50 yuan/ton to - 280 yuan/ton. The price of Foshan A00 aluminum was 23,340 yuan/ton, a change of - 430 yuan/ton from the previous trading day, and the aluminum spot premium changed by 15 yuan/ton to - 180 yuan/ton [2] Aluminum Futures - On February 5, 2026, the main contract of Shanghai aluminum opened at 23,800 yuan/ton, closed at 23,385 yuan/ton, a change of - 525 yuan/ton from the previous trading day. The highest price was 23,905 yuan/ton, and the lowest price was 23,300 yuan/ton. The trading volume for the whole trading day was 473,671 lots, and the position was 207,370 lots [3] Aluminum Inventory - As of February 5, 2026, the domestic social inventory of electrolytic aluminum ingots was 836,000 tons, a change of 19,000 tons from the previous period; the warehouse receipt inventory was 154,332 tons, a change of 4,043 tons from the previous trading day; the LME aluminum inventory was 492,975 tons, a change of - 2,200 tons from the previous trading day [3] Alumina Spot Price - On February 5, 2026, the SMM alumina price in Shanxi was 2,610 yuan/ton, in Shandong was 2,555 yuan/ton, in Henan was 2,635 yuan/ton, in Guangxi was 2,675 yuan/ton, in Guizhou was 2,740 yuan/ton, and the FOB price of Australian alumina was 310 US dollars/ton [3] Alumina Futures - On February 5, 2026, the main contract of alumina opened at 2,824 yuan/ton, closed at 2,790 yuan/ton, a change of - 22 yuan/ton from the previous trading day's closing price, with a change rate of - 0.78%. The highest price was 2,824 yuan/ton, and the lowest price was 2,774 yuan/ton. The trading volume for the whole trading day was 435,829 lots, and the position was 359,707 lots [3] Aluminum Alloy Price - On February 5, 2026, the procurement price of Baotai civil raw aluminum was 17,100 yuan/ton, and the procurement price of mechanical raw aluminum was 17,500 yuan/ton, with a price change of - 200 yuan/ton compared to the previous day. The Baotai quotation of ADC12 was 23,100 yuan/ton, with a price change of - 200 yuan/ton compared to the previous day [4] Aluminum Alloy Inventory - The social inventory of aluminum alloy was 67,400 tons, and the in - factory inventory was 71,100 tons [5] Aluminum Alloy Cost and Profit - The theoretical total cost was 22,430 yuan/ton, and the theoretical profit was 570 yuan/ton [6] Group 4: Market Analysis Electrolytic Aluminum - Aluminum prices are in a wide - range oscillation period. The increase in prices suppresses the restocking demand of downstream and traders. With the approaching of the Spring Festival holiday, the stocking demand decreases, and traders are reluctant to sell. The social inventory will continue to accumulate rapidly, and the peak inventory during the Spring Festival is expected to reach 1.5 million tons. Currently, the aluminum price has only released risks, and the cost - effectiveness of buying for hedging is not yet evident. In the long - term, macro factors such as moderately loose monetary policies at home and abroad and consumption resilience overseas are the main drivers for price increase [7] Alumina - The conventional purchase price of alumina by northwest electrolytic aluminum plants is 2,775 yuan/ton, a decrease of 5 yuan/ton compared to the previous period. Australia sold 30,000 tons of alumina at FOB prices of 313 US dollars/ton in Western Australia or 310 US dollars/ton in Eastern Australia for April shipment, an increase of 3 US dollars/ton compared to the previous period. The futures price is still at a high premium to the spot price. In terms of fundamentals, production resumption and maintenance are carried out simultaneously. Although the output has decreased month - on - month, the surplus situation remains unchanged, and the social inventory continues to increase. The cost support is weak, and there has been no large - scale active production reduction by alumina plants. A new 2.4 million - ton production capacity in Guangxi has started raw material procurement and is expected to be put into production in the second half of the second quarter [8][9]

Report Industry Investment Ratings - No investment ratings were provided in the reports. Core Views Polyolefin Industry - PP shows both increasing supply and demand. Supply rises due to fewer maintenance shutdowns, and demand remains resilient in sectors like automotive and home appliances. However, there is a slight inventory build - up this week under the pressure of new production capacity. PE has weak supply and demand. Although unplanned maintenance eases supply pressure, imported goods are still abundant, and demand outside of agricultural films generally declines. There is overall insufficient support, and while inventory decreased this week, port inventory remains high. The cost side shows oil prices fluctuating and coal prices rising, with a slight improvement in PDH profits. High inventory and cost support continue to compete, and market expectations remain weak [2]. Methanol Industry - The Iranian gas restriction has been postponed. As of November 12th, Iran's shipments reached 430,000 tons, maintaining a relatively high level, putting significant pressure on the port methanol market. Prices and basis are weakly oscillating. In the inland market, Jiutai had an unexpected maintenance, but subsequent domestic production will continue to increase. Overseas gas restriction is less than expected. On the demand side, multiple MTO units reduced their loads due to profit reasons, and traditional downstream industries made rigid - demand purchases. The current market is trading under the "weak reality" logic, with the core contradiction being high port inventory. The inventory contradiction of the 01 contract cannot be resolved, and the weak reality will continue to be traded before the Iranian gas restriction [6]. Natural Rubber Industry - On the supply side, there are still occasional rainfall disruptions in overseas production areas, but overall, the output during the peak season is expected to be strong, and raw material prices have some downward space. The domestic production area is gradually entering the production - reduction period, and domestic raw material prices are firm. On the demand side, some northern regions are gradually entering the off - season this month, market sales are slowing down, and most companies are digesting inventory and purchasing as needed. As the market gradually digests inventory, some companies made small - scale replenishments in the middle of the month. In summary, short - term macro fluctuations are large, and rubber prices are expected to oscillate. In the future, attention should be paid to the raw material output in the peak - season of the main production areas and macro changes. If raw material supply is smooth, prices will be weak; if not, prices may be stable. It is expected that rubber prices will fluctuate around 15,000 - 15,500 [9]. Polyester Industry - **PX**: Asian and domestic PX loads remain high. In the short - term, PTA load is maintained, and previous terminal and polyester demand has improved more than expected. With low polyester inventory, it is expected that the load will remain relatively high from November to December, and there is still support on the short - term PX demand side. However, the overall support from the cost side is limited due to the weak supply - demand outlook for crude oil. Recently, the market has been trading on the expectations of PTA anti - involution and tight mid - term PX supply - demand. PX has shown a strong trend. But the terminal demand is entering the off - season, and there are concentrated PTA device maintenance plans in November, so the PX supply - demand outlook is loose, and price drivers are limited. Strategically, PX may oscillate in the range of 6,200 - 6,800 in the short - term, and short - selling can be considered above 6,800 [10]. - **PTA**: There are still many PTA device maintenance plans in November. Terminal and polyester demand has improved more than expected, and with low polyester inventory, it is expected that the load will remain relatively high from November to December. The PTA supply - demand is expected to be in a tight balance in November, but it is expected to be loose from February to the first quarter of next year. In terms of absolute price, the price driver is limited, and the support for PTA is limited. Although PTA - related stocks and absolute prices have been boosted by recent PTA production - cut rumors, the basis is still weakly operating. It is expected that the PTA rebound will be limited. Strategically, TA should be treated as oscillating in the range of 4,300 - 4,800 in the short - term, and short - selling on rallies is recommended; a rolling reverse spread for TA1 - 5 can be considered [10]. - **Ethylene Glycol**: Recently, some coal - based ethylene glycol plants have undergone maintenance, but Zhenhai Refining & Chemical's plant is restarting, and previously shut - down coal - based plants are planned to restart in the middle and late part of the month. Domestic supply remains high, and North American ethylene glycol load has increased to a high level, with no reduction in Middle - East supply. November will see a concentrated arrival of overseas ethylene glycol shipments. Although the polyester load is maintained above 91%, the expected high inventory build - up from November to December puts pressure on ethylene glycol prices. Strategically, hold out - of - the - money call options with a strike price of no less than 4,100 for EG2601; implement a reverse spread for EG1 - 5 on rallies [10]. - **Short - fiber**: Currently, short - fiber factories have low inventory levels and reasonable processing fees, so short - term supply remains relatively high. In terms of demand, there is an expectation of seasonal weakening in terminal demand in November. As raw material prices decline, short - fiber prices follow suit, and there has been some purchasing at low prices in the market. Overall, the short - term supply - demand pattern is still weak. Although there are expectations of PTA production cuts, the medium - term supply - demand weakness is difficult to change, and with the weak supply - demand outlook for upstream crude oil, price drivers are weak. It is expected that the rebound space for short - fiber is limited, and processing fees may be compressed. Strategically, the single - side strategy is the same as that for PTA; the processing fee on the futures market is expected to oscillate in the range of 800 - 1,100, and short - selling on rallies is recommended [10]. - **Bottle chips**: In mid - November, there are both maintenance and restart of the Huarun plant. According to Longzhong Information, the commissioning of Dongying Fuhai's new plant has been postponed, so there is little change in domestic supply. Considering the off - season market demand in November, the demand for soft drinks and catering has declined slightly, and the demand side provides insufficient support for bottle chips. The supply - demand situation for bottle chips remains loose. Therefore, bottle - chip social inventory is likely to enter the seasonal inventory - build - up phase. PR will mainly fluctuate with the cost side, and processing fees will be less boosted by supply - demand and will change dynamically with raw material costs. Strategically, the single - side strategy for PR is the same as that for PTA; the processing fee on the PR main - contract futures market is expected to fluctuate in the range of 300 - 450 yuan/ton [10]. Pure Benzene and Styrene Industry - **Pure Benzene**: Recently, there are new production capacities coming on - stream and plant restarts for pure benzene, and the import volume is expected to remain high. Although there are maintenance plans, overall supply may still be loose. On the demand side, some downstream industries are in the red, and the overall demand change is limited. Although the weekly inventory has decreased, the supply pressure remains. The overall supply - demand outlook for pure benzene is loose, and cost support is limited. Since the current valuation of pure benzene is low, future attention should be paid to plant changes. Strategically, BZ2603 has weak self - driving force and should be treated as short - selling on rallies following oil prices [11]. - **Styrene**: Two new styrene plants are operating stably, and previously shut - down plants have restarted, increasing production. There are still maintenance expectations in November, and overall supply may be maintained. The downstream EPS industry has entered the seasonal off - season, and due to high finished - product inventory, there are expectations of production cuts to maintain prices. Overall, the supply - demand outlook for styrene is in a tight balance, and price drivers are still insufficient. Attention should be paid to plant restarts, production cuts, and cost changes. Strategically, the price of EB12 should be treated as short - selling on rallies following cost changes [11]. LPG Industry - No overall view was provided in the report, only price, inventory, and开工率 data were presented [13]. Crude Oil Industry - Previously, due to the expectation that the US government shutdown would end soon and the strong performance of European diesel under continuous sanctions on Russia by Europe and the US, oil prices rebounded. However, the weak supply - demand pattern of crude oil still limits the increase. Overnight, on one hand, both OPEC and EIA monthly reports raised oil production forecasts, increasing concerns about supply over - capacity; on the other hand, there are signs of peace talks between Russia and Ukraine, and the geopolitical premium has declined. Overnight, oil prices dropped significantly. Under the continuous pressure of OPEC+ to increase production, the supply - demand outlook for crude oil in the fourth quarter is weak, and oil prices face pressure on rebounds. In the short - term, a bearish view is taken. Attention should be paid to the actual sanctions on Russia by Europe and the US and the geopolitical situation between Russia and Ukraine [16]. Summary by Directory Polyolefin Industry Price and Spread - Futures prices of L2601, L2605, PP2601, and PP2605 all increased slightly on November 12th compared to November 11th. The spreads L15 and PP15 also increased. Spot prices of East - China PP raffia and North - China LLDPE rose, while North - China LL basis and East - China pp basis decreased [2]. Inventory - PE enterprise inventory increased by 17.84% to 490,000 tons, and social inventory decreased by 1.86% to 500,000 tons. PP enterprise inventory increased by 0.81% to 600,000 tons, and trader inventory increased by 3.91% to 229,000 tons [2]. Operating Rate - PE device operating rate increased by 2.13% to 82.6%, and downstream weighted operating rate decreased by 1.15% to 44.9%. PP device operating rate increased by 0.93% to 77.8%, PP powder operating rate decreased by 2.07% to 42.5%, and downstream weighted operating rate increased by 1.0% to 53.1% [2]. Methanol Industry Price and Spread - Futures prices of MA2601 and MA2605 increased on November 12th compared to November 11th. MA15 spread and Taicang basis changed. Spot prices in Inner Mongolia North Line remained unchanged, while those in Henan Luoyang decreased slightly, and in Taicang port increased. Regional spreads also changed [4]. Inventory - Methanol enterprise inventory decreased by 4.44% to 369,250 tons, port inventory increased by 1.75% to 1.544 million tons, and social inventory increased by 0.49% [5]. Operating Rate - Domestic upstream enterprise operating rate increased by 0.41% to 76.09%, overseas upstream enterprise operating rate increased by 1.92% to 72.0%, Northwest enterprise sales - to - production ratio increased by 5.57% to 103. Downstream, the operating rate of externally - sourced MTO units increased by 1.09% to 84.98%, formaldehyde operating rate increased by 0.23% to 30.0%, and MTBE operating rate increased by 0.80% to 70.2% [6]. Natural Rubber Industry Price and Spread - Spot prices of Yunnan state - owned whole - latex and Thai standard mixed rubber increased on November 12th compared to November 11th. The basis of whole - latex and non - standard price spread decreased. Cup - rubber and glue prices changed slightly [9]. Production and Consumption - September production in Thailand, Indonesia, and India changed, with Thailand and Indonesia decreasing and India increasing. September production in China increased. Tire production and export data also changed, with domestic tire production increasing and export volume decreasing [9]. Inventory - Bonded - area inventory increased by 0.40% to 449,455 tons, and Shanghai Futures Exchange factory - warehouse futures inventory increased by 8.80% to 48,586 tons [9]. Polyester Industry Price and Spread - Upstream prices of Brent crude oil, WTI crude oil, and other raw materials changed. Downstream polyester product prices such as POY, FDY, and DTY also changed, along with their cash - flows. PX - related prices and spreads, PTA - related prices and spreads, and MEG - related prices and spreads all had fluctuations [10]. Inventory - MEG port inventory increased by 17.6% to 661,000 tons [10]. Operating Rate - China's PX operating rate increased by 2.8% to 89.8%, PTA operating rate decreased by 2.1% to 76.4%, MEG comprehensive operating rate decreased by 4.9% to 72.4%, and polyester comprehensive operating rate decreased by 0.4% to 91.3% [10]. Pure Benzene and Styrene Industry Price and Spread - Upstream prices of CFR Northeast - Asia ethylene, CFR China pure benzene, etc. changed. Downstream styrene - related prices and spreads, and pure - benzene and styrene downstream cash - flows also had fluctuations [11]. Inventory - Styrene inventory in East - China ports and pure - benzene inventory in Jiangsu ports decreased [11]. Operating Rate - The Asian pure - benzene operating rate remained unchanged at 78.8%, domestic hydro - benzene operating rate decreased by 3.4% to 55.7%, and downstream EPS operating rate decreased by 13.3% to 54.0% [11]. LPG Industry Price and Spread - Futures prices of PG2512, PG2601, etc. increased on November 12th compared to November 11th. Spreads such as PG12 - 01, PG12 - 02, etc. also increased. Spot prices in South - China and basis changed [13]. Inventory - LPG refinery storage capacity ratio decreased by 1.98% to 25.7%, port inventory decreased by 3.65% to 298,000 tons, and port storage capacity ratio decreased by 3.66% to 48.7% [13]. Operating Rate - Upstream main - refinery operating rate decreased by 2.31% to 78.64%, downstream PDH operating rate increased by 2.17% to 75.5%, MTBE operating rate increased by 0.84% to 68.6%, and alkylation operating rate decreased by 6.11% to 41.6% [13]. Crude Oil Industry Price and Spread - Brent, WTI, and SC crude oil prices changed on November 12th compared to November 11th. Spreads such as Brent M1 - M3, WTI M1 - M3, etc. also changed. Refined - oil prices and spreads, and refined - oil cracking spreads all had fluctuations [16].