Core Viewpoint - Semiconductor Manufacturing International Corporation (SMIC) anticipates that the impact of domestic and international policy changes will lead to increased inventory stocking and supply assurance for customers, expected to continue until the third quarter of 2025, with a slowdown in urgent orders and shipments in the fourth quarter due to seasonal trends [1] Group 1 - The company expects the current situation of increased inventory stocking and supply assurance to persist until Q3 2025 [1] - The fourth quarter is traditionally a slow season for the industry, leading to a relative slowdown in urgent orders and shipments [1] - Despite the anticipated slowdown, the overall capacity utilization rate of the company is not expected to be significantly affected due to a supply-demand imbalance [1] Group 2 - The company aims to exceed the average performance of comparable peers for the entire year, assuming no major changes in the external environment [1]

Employment Data Summary - In July 2025, the U.S. non-farm payrolls increased by 73,000, significantly below the expected 104,000, with the previous month's figure revised down from 147,000 to 14,000, resulting in a total downward revision of 253,000 for May and June[2] - The unemployment rate rose from 4.1% to 4.2%, while the U6 unemployment rate increased by 0.2 percentage points to 7.9%[2] - The labor force participation rate fell for the fourth consecutive month, decreasing by 0.1 percentage points to 62.2%[2] Wage Growth Insights - Private sector hourly wage growth increased from 0.2% to 0.3% month-on-month, driven primarily by the service sector, where wage growth rose from 0.2% to 0.4%[3] - Retail sector hourly wage growth surged from 0.2% to 1.2%, attributed to increased hiring demand during the summer season and inventory replenishment[3] Sector Performance Analysis - The service sector added 96,000 jobs in July, while the production sector remained weak, with a loss of 13,000 jobs[2] - Government employment decreased by 10,000, with federal government layoffs continuing[2] Market Reactions and Future Outlook - Following the release of the employment data, market expectations for a rate cut increased, with the probability of a 25 basis point cut in September rising from 43.2% to 80.3%[3] - The report indicates a growing concern over the dual challenge of "low employment" and "high inflation," complicating the Federal Reserve's policy decisions[3]

Core Viewpoint - The recent surge in lithium carbonate prices is primarily driven by policy changes and stricter local government management, with prices reaching 80,500 yuan/ton, a 37.84% increase from the low of 58,400 yuan/ton on June 23 [1][3]. Price Movement - Lithium carbonate futures hit the daily limit up on July 24 and 25, with a closing price of 80,500 yuan/ton on the latter date. The trading volume was significant, with 132 billion yuan on July 24 and 95.6 billion yuan on July 25 [3]. - The average price for battery-grade lithium carbonate increased by 100 yuan/ton to 70,550 yuan/ton, while industrial-grade lithium carbonate also rose by 100 yuan/ton to 68,900 yuan/ton [3]. Market Dynamics - Traders are currently experiencing higher profit margins, with earnings of 1,000 yuan per ton compared to previous margins of 200 yuan [2]. - The market sentiment is optimistic, with traders expressing a bullish outlook on lithium carbonate prices [2]. Supply and Demand Factors - The lithium carbonate production is expected to increase by 3.9% month-on-month to 81,200 tons in July, while imports decreased by 16.3% month-on-month [7]. - Low inventory levels among downstream manufacturers are contributing to the upward pressure on prices, as many are only holding two weeks' worth of supply [7]. Capacity and Regulatory Environment - The operating rate in the lithium industry is around 60%, up from a low of 50% during poor market conditions [4]. - Local governments are taking actions to reduce production capacity, which is expected to positively impact prices. For instance, certain companies have been ordered to halt illegal mining activities [5][6]. Future Outlook - If lithium carbonate prices reach 100,000 yuan/ton, it is anticipated that all segments of the industry will see improved profitability [1][8]. - The long-term cost support and short-term improvements in market fundamentals suggest that lithium prices may recover from their recent lows [7].

Manufacturing PMI Insights - June manufacturing PMI slightly improved by 0.2 percentage points to 49.7%, remaining below the expansion threshold[2] - New export orders index rose by 0.2 percentage points to 47.7%, indicating ongoing export challenges despite temporary easing in US-China trade tensions[3] - New orders index increased by 0.4 percentage points to 50.2%, with consumer goods PMI improving by 0.2 percentage points to 50.4%[3] Inventory and Production Trends - Finished goods inventory index surged by 1.6 percentage points to 48.1%, but annualized index fell by 0.1 percentage points to a low of 47.6%[4] - Production index rose by 0.3 percentage points to 51.0%, reflecting a temporary improvement in production driven by consumption and export demand[4] Economic Outlook and Risks - The rebound in manufacturing PMI is attributed to subsidies stimulating durable consumption and a second wave of export efforts[4] - Future uncertainties hinge on the domestic real estate market's recovery and the potential impact of the US tax reduction plan on local production and consumption[4] - There is a risk of additional interest rate cuts if the real estate market continues to struggle, with potential for increased subsidies for durable goods[4]