Report Industry Investment Rating - Not provided Core Viewpoint - The fundamental situation of coal and coke temporarily maintains a pattern of strong supply and weak demand. The uncertainty of overseas geopolitical conflicts is relatively high, and the price fluctuations in the energy and chemical sectors are intense, which has a certain impact on the market sentiment of coking coal. Short - term risk control should be noted, and chasing up should be avoided [3] Summary by Relevant Catalogs Market Performance - Last week, the center of the coal and coke futures price moved slightly upward, and the overall fluctuation was relatively intense. The coking coal price was driven by the energy and chemical sectors [3] Supply Side - In terms of coal and coke fundamentals, coal mine production has basically recovered. Last week, the daily production of raw coal and clean coal from 523 sample coking coal mines was 1.936 million tons and 777,000 tons respectively, an increase of 108,000 tons and 29,000 tons respectively compared with the previous week, basically returning to the pre - holiday production level. After the Spring Festival, the daily customs clearance volume at the Ganqimaodu Port for Mongolian coal has returned to a relatively high level. The average daily customs clearance volume in the week of March 7 was 186,000 tons, and the inventory in the port supervision area continued to increase. According to customs data, in the first two months, China's cumulative coal imports were 77.222 million tons, a year - on - year increase of 1.45% [3] Demand Side - Recently, due to steel mills implementing emission reduction measures, the daily average hot metal output of blast furnaces has dropped to 2.212 million tons, a decrease of 63,900 tons compared with the previous period, and a cumulative decrease of 120,800 tons in the past two weeks, exceeding market expectations. With the conclusion of the Two Sessions, steel mills will resume production this week. The draft report on the national economic and social development plan for 2026 mentioned that in 2026, efforts will be made to continue to promote the quality improvement, cost reduction, and carbon reduction actions in key industries; comprehensively implement measures to address "involution - style" competition; promote the balance and stability of supply and demand in key industries such as steel and significantly improve the profitability of enterprises; and orderly reduce the production capacity of industries such as steel [3]

Group 1 - The central economic work conference emphasized the need to establish a nationwide unified market construction regulation and to deeply rectify "involutionary" competition [1] - Measures will be taken next year to enhance the effectiveness of the unified market construction, aiming for efficient allocation of various resources and factors [1] - The conference signaled an intention to optimize competitive order and stabilize market expectations, with initial focus on areas like bidding and platform economy [1] Group 2 - The government aims to continuously improve market operation rules and regulate local government economic promotion behaviors [1] - The rectification of "involutionary" competition is expected to stabilize corporate expectations and boost development confidence [1] - Experts believe that curbing malicious low-price competition will lead to improved industry profits and allow banks to adjust credit and risk pricing for stable enterprises [2]

Group 1: Report Industry Investment Ratings - Steel: Oscillating with an upward bias [1] - Iron Ore: Oscillating [1] - Coking Coal: Oscillating [1] - Coke: Oscillating [1] - Manganese Silicon: Oscillating with an upward bias [1] - Ferrosilicon: Oscillating with an upward bias [3] Group 2: Core Views of the Report - For steel, the supply - demand data has improved with falling production and inventory and rising apparent demand. Strong cost support and positive market sentiment are expected to drive the short - term upward bias [1]. - Iron ore shows an oscillating trend due to the increase in global shipments and the decrease in molten iron production [1]. - Coking coal is expected to have a wide - range oscillation as tightened supply measures and uncertain demand from coke enterprises co - exist [1]. - Coke is likely to oscillate widely as supply has an upward adjustment intention while demand has a downward trend [1]. - Manganese silicon may have a slightly upward - moving price center, but the sustainability is limited due to a complex supply - demand - cost - inventory situation [3]. - Ferrosilicon is expected to oscillate slightly upward as market sentiment is boosted, but the driving force for continuous upward movement is weak [3]. Group 3: Summary of Daily Data Monitoring Contract Spread - For rebar, the 1 - 5 month spread is - 53.0 (up 10.0), and the 5 - 10 month spread is - 32.0 (up 3.0) [4]. - For hot - rolled coil, the 1 - 5 month spread is - 13.0 (down 2.0), and the 5 - 10 month spread is - 8.0 (up 15.0) [4]. - For iron ore, the 1 - 5 month spread is 23.0 (down 1.0), and the 5 - 9 month spread is 21.5 (unchanged) [4]. - For coke, the 1 - 5 month spread is - 143.0 (down 13.5), and the 5 - 9 month spread is - 90.5 (up 8.0) [4]. - For coking coal, the 1 - 5 month spread is - 76.5 (down 11.0), and the 5 - 9 month spread is - 73.5 (up 1.5) [4]. - For manganese silicon, the 1 - 5 month spread is - 38.0 (unchanged), and the 5 - 9 month spread is - 34.0 (down 8.0) [4]. - For ferrosilicon, the 1 - 5 month spread is - 88.0 (down 10.0), and the 5 - 9 month spread is - 58.0 (up 8.0) [4]. Basis - For rebar, the 01 - contract basis is 107.0 (down 22.0), and the 05 - contract basis is 54.0 (down 12.0) [4]. - For hot - rolled coil, the 01 - contract basis is 15.0 (down 20.0), and the 05 - contract basis is 2.0 (down 22.0) [4]. - For iron ore, the 01 - contract basis is 50.9 (down 2.1), and the 05 - contract basis is 73.9 (down 3.1) [4]. - For coke, the 01 - contract basis is - 81.2 (down 10.0), and the 05 - contract basis is - 224.2 (down 23.5) [4]. - For coking coal, the 01 - contract basis is - 34.0 (down 60.0), and the 05 - contract basis is - 110.5 (down 71.0) [4]. - For manganese silicon, the 01 - contract basis is - 172.0 (down 62.0), and the 05 - contract basis is - 210.0 (down 62.0) [4]. - For ferrosilicon, the 01 - contract basis is - 294.0 (down 50.0), and the 05 - contract basis is - 382.0 (down 60.0) [4]. Spot Price - For rebar, Shanghai is 3240.0 (up 20.0), Beijing is 3170.0 (up 30.0), and Guangzhou is 3330.0 (up 20.0) [4]. - For hot - rolled coil, Shanghai is 3360.0 (up 20.0), Tianjin is 3310.0 (up 20.0), and Guangzhou is 3360.0 (up 30.0) [4]. - For iron ore, PB powder is 805.0 (up 9.0), and Super Special powder is 715.0 (up 6.0) [4]. - For coke, Rizhao quasi - first - grade metallurgical coke is 1550.0 (up 40.0) [4]. - For coking coal, Shanxi medium - sulfur primary coking coal is 1460.0 (unchanged) [4]. - For manganese silicon, Ningxia is 5600.0 (up 20.0), Inner Mongolia is 5680.0 (unchanged), and Guangxi is 5650.0 (unchanged) [4]. - For ferrosilicon, Ningxia is 5170.0 (unchanged), Inner Mongolia is 5200.0 (down 20.0), and Qinghai is 5200.0 (unchanged) [4]. Profit and Spread - Rebar's disk profit is - 137.9 (down 4.6), long - process profit is - 81.8 (up 3.9), and short - process profit is - 40.6 (up 10.0) [4]. - The coil - rebar spread is 212.0 (down 2.0), the rebar - iron ore ratio is 3.9 (down 0.01), the rebar - coke ratio is 1.7 (down 0.03), the coking coal - iron ore ratio is 1.4 (down 0.02), the coke - iron ore ratio is 2.2 (up 0.03), and the double - silicon spread is 258.0 (down 28.0) [4]. Group 4: Chart Analysis 3.1 Main Contract Price - Charts show the closing prices of main contracts for rebar, hot - rolled coil, iron ore, coke, coking coal, manganese silicon, and ferrosilicon from 2020 to 2025 [6][7][10][14] 3.2 Main Contract Basis - Charts display the basis of main contracts for rebar, hot - rolled coil, iron ore, coke, coking coal, manganese silicon, and ferrosilicon [16][18][21][23] 3.3 Inter - period Contract Spread - Charts present the inter - period contract spreads of rebar, hot - rolled coil, iron ore, coke, coking coal, manganese silicon, and ferrosilicon [25][29][30][34][37] 3.4 Inter - variety Contract Spread - Charts show the inter - variety contract spreads such as the ferrosilicon contract spread, main - contract coil - rebar spread, rebar - iron ore ratio, rebar - coke ratio, coking coal - iron ore ratio, coke - iron ore ratio, and double - silicon spread [39][40][41][42] 3.5 Rebar Profit - Charts illustrate the disk profit, long - process calculated profit, and short - process calculated profit of rebar from 2020 to 2025 [44][45][48] Group 5: Black Research Team Member Introduction - Qiu Yuecheng, the assistant director of Everbright Futures Research Institute and the director of black research, has nearly 20 years of experience in the steel industry [50] - Zhang Xiaojin, the director of resource product research at Everbright Futures Research Institute, has rich experience in the coal futures field [50] - Liu Xi, a black researcher at Everbright Futures Research Institute, is good at fundamental supply - demand analysis based on industrial chain data [50] - Zhang Chunjie, a black researcher at Everbright Futures Research Institute, has experience in investment trading strategies and combining financial theory with industrial operations [51]

Investment Rating - The report maintains a positive investment rating for the renewable energy sector, particularly highlighting the recovery in the photovoltaic and wind energy segments [5]. Core Insights - The renewable energy sector is showing clear signs of recovery, with significant performance improvements in the photovoltaic and wind energy segments, while the energy storage sector continues to experience upward momentum [1][14]. - The photovoltaic industry is witnessing a rebound in performance, driven by a surge in domestic demand and the implementation of policies to eliminate "involution" competition, leading to price stabilization [2][34]. - The wind energy sector is benefiting from improved bidding conditions, which are translating into revenue growth for companies within the industry [3][21]. - The grid equipment sector is experiencing stable growth, supported by a long-term increase in global grid investment [4][24]. Summary by Sections Overall Industry Performance - The overall performance of the renewable energy sector has improved significantly in the first half of 2025, with a notable recovery in profits, particularly in the wind and energy storage segments [1][15]. - The photovoltaic segment is gradually recovering, with major components like silicon wafers and battery cells showing substantial growth, while auxiliary materials face pressure [1][21]. - The industry is experiencing a slowdown in capacity expansion, with the proportion of ongoing projects relative to total assets decreasing [26]. Photovoltaic Sector - The photovoltaic sector is seeing a recovery in performance, with significant growth in the main supply chain components, while auxiliary materials are under pressure [2][34]. - Domestic demand for photovoltaic products surged in the first half of 2025, leading to a historical high in new installations [2][48]. - The implementation of policies to address "involution" competition is accelerating the exit of outdated capacities from the market [2][34]. Wind Energy Sector - The wind energy sector is showing a clear recovery trend, with revenue growth across various segments, particularly in components like towers and bearings [3][21]. - The domestic wind energy prices have significantly increased compared to 2024, with bidding volumes continuing to grow [3][21]. Grid Equipment Sector - The grid equipment sector is maintaining stable growth, benefiting from a long-term upward trend in global grid investments [4][24]. - The performance of transmission and distribution equipment is particularly strong, with notable revenue growth in the first quarter of 2025 [22].

Core Viewpoint - Recent policies have emphasized the need to address "involutionary" competition, specifically targeting the governance of low-price disorderly competition and promoting the exit of backward production capacity [1] Group 1: Policy Impact - The supply-side clearing driven by policies is expected to improve the industry landscape, with the first phase of the market rally initiated by policy expectations [1] - The previous round of excess capacity was mainly concentrated in upstream resource industries, while the current round is focused on midstream and downstream industries [1] Group 2: Investment Strategies - Two main investment lines are suggested: 1. Industries with a longer supply-side clearing time and potential for supply-demand balance improvement, such as agricultural chemicals, general machinery, and components [1] 2. Industries undergoing policy-driven clearing, such as cement and photovoltaic sectors [1]

Economic Policy and Measures - The State Council emphasizes the need to anchor annual development goals and enhance the effectiveness of macroeconomic policies, focusing on stimulating internal economic momentum [1][4] - Implementation of personal consumption loan interest subsidy policies and service industry loan interest subsidy policies aims to better stimulate consumption potential [1][7] Manufacturing Sector Performance - In July, the manufacturing Purchasing Managers' Index (PMI) was 49.3%, a decrease of 0.4 percentage points from the previous month, remaining below the expansion threshold for four consecutive months [1][4] - The new orders index for manufacturing was 49.4%, down 0.8 percentage points, indicating a contraction in market demand [6] - Despite weak demand, manufacturing production activities expanded, with a production index of 50.5%, although it decreased by 0.5 percentage points from the previous month [6][9] Price Trends - The manufacturing raw material purchase price index rose to 51.5%, an increase of 3.1 percentage points, indicating a recovery in raw material prices [6] - The ex-factory price index for manufactured goods was 48.3%, up 2.1 percentage points, marking the second-highest point this year [6] Business Confidence and Expectations - The production and business activity expectation index for July was 52.6%, reflecting an increase in confidence among manufacturing enterprises regarding market development [8] - Large enterprises maintained a PMI of 50.3%, while medium-sized enterprises improved to 49.5%, indicating a mixed outlook across different enterprise sizes [8] Non-Manufacturing Sector Insights - The non-manufacturing business activity index was 50.1%, a decrease of 0.4 percentage points, but still within the expansion range [10] - The construction industry index was 50.6%, indicating a slowdown in construction activities due to seasonal weather impacts [10] Consumer Behavior and Seasonal Trends - Summer consumption effects began to show, with retail and postal service indices rising above 50%, indicating strong consumer spending intentions [11] - However, the accommodation and catering sectors remained below 50%, suggesting that summer spending was more focused on outdoor and entertainment activities rather than dining [13] Future Economic Outlook - The Central Political Bureau meeting highlighted the need to effectively release internal demand potential and implement actions to boost consumption [14] - The focus on service consumption is expected to play a crucial role in meeting public needs and driving consumption industry upgrades [14]