Group 1 - The U.S. is threatening to impose a 50% tariff on copper imports, raising concerns in the automotive industry about increased costs and the potential for these costs to be passed on to consumers [1][3] - Automotive manufacturers are currently relying on inventory to avoid price increases, but the additional costs from tariffs and rising domestic prices are intensifying financial pressures on manufacturers and suppliers [3][4] - The cost of steel, aluminum, and copper accounts for approximately 5% of U.S. automotive production costs, which could rise to 9% with the new tariffs [4] Group 2 - If the 50% tariff takes effect, the price of copper in the U.S. could reach $15,000 per ton, compared to $10,000 in other regions, significantly impacting the automotive industry [4] - The average tariff cost for domestically produced vehicles in the U.S. could be at least $1,700, while imported vehicles from Canada and Mexico could incur tariffs of $3,500, and other regions could face up to $5,700 [4] - The U.S. heavily relies on imported copper, aluminum, and steel, with nearly half of its copper consumption being imported, and domestic production is insufficient for self-sufficiency [4] Group 3 - Some industry experts are skeptical about the actual implementation of the copper tariffs, citing past instances where similar threats were postponed or retracted [5] - The potential for higher inflation due to tariffs may conflict with political realities surrounding the upcoming midterm elections in November 2026, suggesting that the copper tariffs may be short-lived [5]

Report Information - Report Title: Short Fiber and Bottle Chip Weekly Report [1] - Report Date: June 22, 2025 [1] - Report Authors: Chen Xinchao, He Xiaoqin, Qian Jiayin [1] Investment Ratings - No investment ratings are provided in the report. Core Views - Both bottle chips (PR) and short fibers (PF) are experiencing high-level fluctuations due to the ongoing geopolitical risks, and they may further surge in the short term [8]. - For bottle chips, the fundamentals have weak support, and the implementation of the planned 20% joint production cut starting from late June to July, involving about 2.4 million tons of production capacity, remains to be observed. If the cut is implemented, the supply-demand balance of bottle chips may turn to a tight balance or slight destocking in July - August [8]. - For short fibers, both domestic and foreign demand are weakening month-on-month. The factory is discussing joint production cuts and contract reductions, which are expected to be implemented in July, but the intensity of the cuts remains to be seen [8]. Summary by Section Bottle Chips (PR) Fundamentals - Head factories plan to jointly cut production by 20% from late June to July, involving about 2.4 million tons of production capacity. The current operating rate is 90.3%, and if the cut is implemented, the supply-demand balance in July - August may turn tight or lead to slight destocking. However, the actual implementation and duration of the cut need further observation. Factory and social inventories are both increasing, currently at around 18 days. Downstream demand is affected by high prices and freight costs [8]. - The conflict between Iran and Israel continues to impact costs. After the US announced strikes on Iranian nuclear facilities, costs are expected to rise in the short term, increasing price volatility [8]. Price and Spread - The basis has generally declined, and the near - end of the monthly spread structure has weakened [16]. - This week, prices have risen with costs. Factory order transaction prices range from 6,050 - 6,420 yuan/ton ex - factory, and FOB prices have risen to 820 - 835 US dollars/ton. The East - South China price spread is weak [20]. - The bottle chip - slice spread has been at a historical low since 2024, and some producers with conversion capabilities may switch production. The short fiber - bottle chip spread has compressed to a level similar to last year. The bottle chip - PVC spread is at a high level, reducing the incentive for further substitution, while the bottle chip - PP spread indicates high cost - effectiveness, and substitution in the packaging field continues [26][27][28]. Production and Operation - Since 2024, the production capacity base has been expanding, and the current effective production capacity is 2,168 million tons (CCF口径). This week, the bottle chip load has slightly increased to 90.3%, and the weekly production is still at a high level [32]. Raw Materials - PTA has shifted from destocking to stockpiling. The processing fee has decreased, the operating rate has changed, and the total inventory has increased [38][41]. - For MEG, the marginal profit is affected by factors such as naphtha, the operating rate has changed, and the port inventory in East China has changed [44][45]. Cost and Profit - The polymerization cost has significantly increased, reaching around 5,700 - 6,000 yuan/ton this week. The spot processing fee for bottle chips has reached a new low, ranging from 200 - 270 yuan/ton. The export profit has been compressed, and the internal - external price spread has narrowed [52]. Inventory - The overall PTA inventory of polyester factories has remained stable. The inventory of domestic polyester bottle chip factories is about 18 days (CCF口径). The estimated social inventory in May is 2.93 million tons, and it is expected to reach 3.08 million tons in June [53]. Device Changes - Some devices, such as those of Sanfangxiang, have stopped production. In the future, devices of companies like Huarun and Yisheng plan to cut production or conduct maintenance [56]. Demand - This week, the downstream operating rate has remained stable. Beverage companies' operating rates range from 80 - 95%, edible oil factories' average operating rate is around 60 - 80%, and the operating rate of sheet materials in East China is around 60 - 80% and in South China is around 40 - 60% [61]. - From January to May 2025, beverage consumption has been relatively weak year - on - year. However, there are still many new beverage factory production lines planned to be launched this year [67][68]. - From January to April 2025, edible oil production has increased by 3.7% year - on - year, and catering revenue has increased by 4.5% year - on - year [69]. - The demand for sheet materials is average, and supermarket consumption has improved month - on - month [73]. Global Trade - Overseas bottle chip production capacity has had little growth in recent years, and the downstream demand increment overseas will increasingly rely on imports. China's bottle chip exports are mainly directed to Southeast Asia, South Asia, Central Asia, Russia, Eastern Europe, South Korea, Mexico, the Middle East, Africa, and South America [77]. - In May 2025, the total export volume of polyester bottle chips and slices was 742,000 tons, a year - on - year increase of 30.6%. However, there may be some over - consumption of the actual export volume from June to July [80]. Short Fibers (PF) Valuation - The PF basis has remained stable and volatile, and the futures - spot structure maintains a back structure. The on - disk processing fee is operating at a low level [97][104]. Operation - The average operating rate of direct - spinning short fibers is 95%, and the operating rate of spinning direct - spinning short fibers is 98.2%. The Fujian Jinlun 250,000 - ton device has started production [110]. Inventory - Downstream buyers have returned to a wait - and - see attitude, and the inventory pressure of most varieties has been relieved [115]. Profit - Polyester profits are generally weak, but the profits of long fibers have improved month - on - month [123]. Downstream - The operating rate of polyester yarn has remained stable. Yarn replenishment is average, mainly consuming raw material inventories, and finished product inventories are increasing. Polyester yarn profits are generally better than last year, especially for polyester - cotton yarns, and the substitution of virgin fibers for recycled fibers continues [131][133][135]. Weaving - Some weaving machines have reduced their operating rates seasonally. The comprehensive operating rates of江浙 texturing, weaving, and printing and dyeing have all declined [144][152].

Core Insights - The global sports brand industry is facing multiple pressures including economic slowdown, tariff impacts, rising costs, and weak consumer demand [2] - Under Armour reported a 9% decline in annual sales to $5.2 billion for the fiscal year ending March 31, 2025, with a net loss of $201 million [4][5] - On, a rising brand, experienced a 38% drop in net profit for Q1 2025 despite a 43% increase in sales, indicating challenges in maintaining profitability amid expansion costs [7][9] Under Armour - Under Armour's Q4 revenue fell 11% to $1.2 billion, but gross margin improved by 1.7 percentage points to 46.7% [4] - The company is focusing on full-price sales, reducing promotions, optimizing inventory, and implementing layoffs to enhance profitability and brand positioning [5] - North American revenue decreased by 11% to $3.1 billion, while international revenue fell by 6% to $2.1 billion, with the Asia-Pacific region down 13% to $755 million [5] On - On's Q1 2025 sales surged by 43% to 726.6 million Swiss francs, but net profit dropped by 38% to 56.7 million Swiss francs, resulting in a net profit margin of 7.8% [7] - The brand plans to increase prices in the U.S. market starting July, with potential expansion of this strategy to other markets next year [7] - The Asia-Pacific market saw a remarkable 130.1% increase in sales, becoming a key growth driver for the brand [7] Puma - Puma's Q1 2025 net profit plummeted by 64%, with sales growth of only 0.1% to €2.076 billion [10][12] - The company reported a significant drop in EBIT, down 63.7% to €57.7 million, while maintaining its sales and profit guidance for the fiscal year [12][13] - Puma is implementing cost efficiency plans and plans to cut 500 jobs globally by the end of Q2 [13] Adidas - Adidas reported a strong Q1 2025 with a 13% increase in sales to €6.15 billion, achieving a record high for the quarter [17] - The company’s operating profit surged by 82% to €610 million, driven by strong sales of retro shoe models [17] - Despite the strong performance, Adidas remains cautious about long-term goals due to geopolitical uncertainties and changing consumer sentiments [17]