Group 1 - Developed markets are expected to outperform emerging markets following a dovish signal from the Federal Reserve, with historical data indicating greater upward elasticity in developed markets during the first 1-3 months after such signals [2][3][4] - The S&P 500 has historically shown an average increase of 1.3% in the month following dovish meetings, with a larger average increase of 5.5% over three months [2][5] - Large-cap stocks are generally favored over small-cap stocks in the aftermath of preventive rate cuts, although small-cap stocks may show significant improvement if economic indicators point to recovery [3][4] Group 2 - Growth sectors such as information technology and healthcare, along with cyclical sectors like financials, are expected to perform better due to their sensitivity to interest rate changes [3][4] - The U.S. dollar may not necessarily decline following rate cuts, as historical trends show a slight average increase in the dollar one month and three months after dovish meetings [3][4][5] - Short-term U.S. Treasury yields are expected to decline more significantly than long-term yields, which may be constrained by factors such as fiscal deficits and credit conditions [4][5] Group 3 - In the Chinese market, the impact of rate cuts is seen as a supplementary factor, with the primary influence being the economic fundamentals [4][5] - A-shares are anticipated to favor growth sectors over value sectors, particularly in interest-sensitive industries like pharmaceuticals and electronics, which tend to perform better in the six months following rate cuts [6][7] - Hong Kong stocks, particularly in the information technology sector, are expected to show superior performance both in the short and long term following rate cuts [6][7]

Group 1 - The July non-farm payroll data showed a significant miss, with only 73,000 jobs added, far below the market expectation of 104,000 to 110,000, and prior values were substantially revised down [1][8] - The revisions for May and June were drastic, with May's initial value of 144,000 revised down to 19,000 (a reduction of 125,000) and June's from 147,000 to 14,000 (a reduction of 133,000), totaling a downward revision of 258,000 jobs for May and June combined, marking the largest adjustment since the pandemic [3][12] - The labor market is showing signs of cooling faster than anticipated, as indicated by the weak non-farm data [8][11] Group 2 - Following the release of the non-farm data, the dollar index fell sharply, with a daily drop of 1%, falling below the 99 mark to around 98.9, contrary to expectations of a stronger dollar [7][8] - The market's reaction indicates a shift in expectations regarding Federal Reserve policy, with the probability of rate cuts rising significantly from 40% to 73% for September, and the annual expectation for rate cuts increasing from 1.5 to 2.5 times [8][12] - Federal Reserve officials have expressed support for rate cuts under manageable inflation conditions, suggesting that delaying action could worsen the labor market situation [8][12] Group 3 - The employment landscape is showing a stark contrast between sectors, with healthcare and social assistance adding 55,000 jobs and educational services increasing by 18,000, indicating stable demand in the service sector [8][12] - Conversely, manufacturing jobs have seen negative growth for three consecutive months, and there have been reductions in retail and temporary positions, reflecting weakness in cyclical industries [8][12] - Federal government employment decreased by 12,000, highlighting ongoing layoffs in government efficiency departments [8][12]

Summary of Key Points from Conference Call Records Industry or Company Involved - The discussion primarily revolves around the **Chinese stock market**, particularly the **Hong Kong stock market**, and the **metal and technology sectors**. Core Points and Arguments 1. **Market Dynamics and Investment Strategy** - The activation of deposits and the inflow of wealth management products are key sources of incremental funds for the Hong Kong stock market, necessitating attention to the space for wealth management entry and industry rotation clues [1][2][14] - A bullish outlook on the US stock market is maintained, with an upward adjustment of target points, while the Chinese market represented by Hong Kong stocks remains unchanged, emphasizing structural and industry selection during downturns [1][5] 2. **Impact of Federal Reserve's Rate Cuts** - The expectation of rate cuts by the Federal Reserve is seen as having significant implications for both domestic and international markets, with a need for in-depth analysis rather than relying solely on historical experiences [3][6] - Differentiation between recessionary rate cuts and preventive rate cuts is crucial, as the former requires multiple deep cuts while the latter can be effective with fewer adjustments [10][9] 3. **Strong Growth in Social Financing** - In July, social financing growth was robust, with M1 growth indicating potential future inflation, reflecting an increase in risk appetite among residents [1][14] - The introduction of interest subsidies for consumer and service loans is expected to save borrowers approximately 60 billion yuan annually, impacting around 15 trillion yuan of existing credit [4][17] 4. **Performance of the Metal Sector** - The metal sector has shown strong performance, driven by demand from emerging industries such as AI and geopolitical factors, with expectations of a dual monetary and fiscal easing phase boosting the sector [19][20] - Current demand characteristics include increased military demand and industrialization in emerging economies, while supply is constrained due to insufficient capital expenditure in previous years [20][21] 5. **AI Computing Power Sector** - The computing power sector has rebounded strongly from its lows, driven by significant increases in token consumption and advancements in AI models, indicating a robust growth trajectory [23][24] - Domestic companies are noted for their higher elasticity and faster iteration speeds compared to their North American counterparts, suggesting optimistic prospects for the domestic AI computing chain [26][27] Other Important but Possibly Overlooked Content - The relationship between cost and return is critical in determining economic fluctuations, with short-term Fed rate cuts having positive but limited impacts on market sentiment and liquidity [12][13] - The current valuation of the metal sector is at historical lows, with a potential upward adjustment expected as the fundamentals improve [21] - The anticipated performance of specific metal varieties, including tungsten, rare earths, and cobalt, is highlighted, with a focus on their growth potential in the latter half of the year [22] This summary encapsulates the essential insights and data points from the conference call records, providing a comprehensive overview of the current market landscape and future outlooks.

Core Viewpoint - The article discusses the implications of the Federal Reserve's interest rate cuts, particularly focusing on how these cuts may affect the Chinese market, suggesting that while there may be short-term benefits, the overall impact may not be as significant as commonly perceived [2][28]. Group 1: Impact of Federal Reserve Rate Cuts - The current probability of a rate cut by the Federal Reserve in September is 92% according to CME futures [3]. - The common belief is that a rate cut leads to a weakening of the US dollar and US Treasury yields, which would attract foreign capital into China [2][28]. - However, historical data shows that this assumption may not hold true, as past rate cuts have sometimes coincided with rising yields and a stronger dollar [2][8][12]. Group 2: Types of Rate Cuts - Rate cuts can be categorized into two types: recessionary cuts and preventive cuts. Recessionary cuts occur when the economy is under significant pressure, leading to a decline in yields and the dollar [8][10]. - Preventive cuts happen when economic pressure is less severe, allowing for smaller cuts that can quickly stimulate demand, often resulting in rising yields and a stronger dollar post-cut [12][15]. Group 3: Current Economic Context - The current economic indicators suggest that while there is pressure on the US economy, the situation is not dire enough to necessitate large rate cuts [25][28]. - Key metrics such as the ISM manufacturing PMI and housing sales indicate ongoing weakness, but the actual interest rates are close to natural rates, suggesting that minor cuts could suffice to stimulate the economy [19][25]. Group 4: Short-term vs Long-term Effects - In the short term, the anticipated rate cuts may provide liquidity and improve market sentiment, potentially benefiting the Chinese market [29][33]. - However, this short-term benefit may quickly reverse as the underlying economic conditions improve, leading to a potential rise in yields and the dollar, counteracting the initial positive effects [29][33]. Group 5: Strategic Opportunities - To maximize the benefits of the Federal Reserve's rate cuts, China could implement more aggressive monetary and fiscal policies to support credit expansion [34][38]. - Additionally, sectors related to the US real estate market and traditional manufacturing may see increased demand, presenting opportunities for Chinese exports and commodities [44].

Report Information - Report Name: Zhengxin Futures Copper Weekly Report 20250623 [2] - Researchers: Wang Yanhong, Zhang Jiefu [2] Report Industry Investment Rating No relevant content provided. Core Viewpoints - Copper prices showed a volatile trend during the week. The increase in US steel and aluminum tariffs to 50% strengthened the expectation of copper tariffs, but this factor was not strong enough to drive the market up continuously. The US economy is waiting for "hard data", with the manufacturing sector declining, and the employment situation needs attention. The Fed's previous three interest rate cuts were "preventive", but the interest rate remains at a restrictive level. There is a probability that the next cut could be a "recessionary cut", which depends on "hard data" to signal recession risks [4][85]. - The issue of low refining processing fees due to raw material supply remains severe, but it has not restricted the actual output of refined copper, with May's refined copper output reaching a new high. Domestic demand is seasonally weakening, the copper product operating rate is declining, and the momentum for further reduction of social inventory is weakening. Currently, the copper fundamentals mainly focus on international trade games, and the siphon effect of US copper prices is leading to a continuous reduction of LME copper inventory [4][85]. - Overall, after reaching a high, copper prices retreated with reduced positions. The macro - situation remains under pressure, and the fundamental demand has weakened. It is recommended to take profit on selling CALL options and moderately increase positions in buying PUT options for far - month contracts [4][85]. Summary by Directory Macro - level - In May, the European manufacturing PMI was stable, and the US manufacturing PMI rebounded. The eurozone's May manufacturing PMI preliminary value was 49.4%, up 0.4% from the previous month; Germany's manufacturing increased by 0.4% to 48.8%, and France's by 0.8% to 49.5%. The US May S&P Global manufacturing PMI preliminary value was 52.3%, up 2.1 percentage points month - on - month. China's May manufacturing PMI was 49.5%, up 0.5 percentage points month - on - month, but still below the boom - bust line for two consecutive months. New orders and new export orders remained weak, and the demand side was under pressure due to tariff games [11]. - The US economy is waiting for "hard data", with the manufacturing sector declining. The Fed's previous three interest rate cuts were "preventive", but the interest rate remains restrictive. There is a possibility of a "recessionary cut" based on future "hard data" [4][12][85]. Industrial Fundamentals Copper Concentrate Supply - Global copper mine production: In December 2024, global copper mine production was 2.096 million tons, a year - on - year increase of 4.96%. From January to December 2024, the global copper concentrate output was 22.835 million tons, a year - on - year increase of 2.54%. In March 2025, global copper mine production was 1.969 million tons, a year - on - year increase of 3.69%. In March 2025, the global refined copper market had a supply surplus of 17,000 tons [20]. - China's copper concentrate imports: In December 2024, China imported 2.522 million tons of copper concentrate and its ores, a month - on - month increase of 12.3% and a year - on - year increase of 1.7%. From January to December 2024, the cumulative import was 28.114 million tons, a cumulative year - on - year increase of 2.1%. In May 2025, the copper concentrate import data was lower than expected, with imports of about 2.4 million tons, a month - on - month decrease of 18.09% and a year - on - year increase of 5.8%, slightly lower than the monthly average of 2.485 million tons from January to May 2025 [25]. TC (Treatment and Refining Charges) - On June 20, the SMM imported copper concentrate index (weekly) was - 44.78 US dollars per dry ton, a decrease of 0.03 US dollars per dry ton from the previous period. The SMM nine - port copper concentrate inventory on June 20 was 712,100 physical tons, a decrease of 100,700 physical tons from the previous period. The long - term processing fee benchmark for 2025 was set at 21.25 US dollars per ton and 2.125 cents per pound [29]. Refined Copper Production - In May, SMM's China electrolytic copper production increased by 12,600 tons month - on - month, a rise of 1.12%, and a year - on - year increase of 12.86%. From January to May, the cumulative production increased by 544,800 tons, an increase of 11.09%. In June, it is expected that the domestic electrolytic copper production will decrease by 7,200 tons month - on - month, a decrease of 0.63%, and a year - on - year increase of 126,100 tons, an increase of 12.55% [37]. Refined Copper Imports - In 2024, China imported 3.7388 million tons of refined copper, a cumulative year - on - year increase of 6.49%. In December 2024, the import was 370,400 tons, a month - on - month increase of 2.93% and a year - on - year increase of 18.88%. In April 2025, China imported 250,000 tons of electrolytic copper, a month - on - month decrease of 19.06% and a year - on - year decrease of 11.97% [43]. Scrap Copper Supply - In December 2024, China's import of copper scrap and waste was 217,500 tons, a month - on - month increase of 25% and a year - on - year increase of 9%. In 2024, the cumulative import was 2.25 million tons, a cumulative year - on - year increase of 13.26%. In April 2025, the import of copper scrap and waste was 204,700 tons, a month - on - month increase of 7.92% and a year - on - year decrease of 9.46%. From January to April, the cumulative import was 777,000 tons, a year - on - year slight decrease of 0.81% [46]. Refined - Scrap Spread - This week, the operating rate of recycled copper rods was 24.12%, a decrease of 4.91 percentage points from last week and a year - on - year decrease of 16.86 percentage points. The average spread between refined and scrap copper rods was 1,174 yuan per ton this week, a decrease of 154 yuan month - on - month. The market shows a two - way suppression pattern of "shrinking terminal demand - tightening raw material supply" [49]. Consumption - end - Power and Grid Investment: In 2024, from January to December, the cumulative power investment was 1.168722 trillion yuan, a year - on - year increase of 12.14%, and the grid investment was 608.258 billion yuan, a year - on - year increase of 15.26%. In 2025, from January to April, the cumulative power investment was 193.3 billion yuan, a year - on - year increase of 1.1%, and the grid investment was 140.8 billion yuan, a year - on - year increase of 14.6% [53]. - Air - conditioning: In December 2024, the monthly air - conditioning output was 23.695 million units, a year - on - year increase of 12.9%. From January to December 2024, the cumulative air - conditioning output was 265.9844 million units, a year - on - year increase of 9.7%. From January to May 2025, the air - conditioning output was 134.909 million units, a year - on - year increase of 5.9%, and the industry entered the off - production season [55]. - Automobiles: In May 2025, China's automobile production and sales were 2.649 million and 2.686 million units respectively, a month - on - month increase of 1.1% and 3.7%, and a year - on - year increase of 11.6% and 11.2%. From January to May, the production and sales were 12.826 million and 12.748 million units respectively, a year - on - year increase of 12.7% and 10.9%. For new energy vehicles, in May, the production and sales were 1.27 million and 1.307 million units respectively, a year - on - year increase of 35% and 36.9%. From January to May, the production and sales were 5.699 million and 5.608 million units respectively, a year - on - year increase of 45.2% and 44% [60]. - Real Estate: In 2024, from January to December, the real - estate completion area was 737 million square meters, a year - on - year decrease of 27.7%, and the new construction area decreased by 23% year - on - year. In May 2025, the real - estate completion area was 184 million square meters, a year - on - year decrease of 17.3%, and the new construction area decreased by 22.8% year - on - year [62]. Other Elements Inventory - As of June 20, the total inventory of the three major exchanges was 401,200 tons, a weekly decrease of 11,200 tons. The LME copper inventory decreased by 15,000 tons to 99,200 tons, the SHFE inventory decreased by 1,129 tons to 100,800 tons, and the COMEX copper inventory increased by 5,150 tons to a five - year high of 201,200 tons. As of June 19, the domestic bonded - area inventory was 64,300 tons, an increase of 4,600 tons from last week [67]. CFTC Non - commercial Net Position - As of June 10, the CFTC non - commercial long net position was 26,351 lots, a weekly increase of 2,257 lots. The non - commercial long position was 72,101 lots, a weekly increase of 852 lots, and the non - commercial short position was 45,750 lots, a weekly decrease of 1,405 lots [69]. Premium and Discount - As of June 20, the LME copper spot premium was 274.99 US dollars per ton. After the contract change of SHFE copper on June 20, the spot premium continued to decline. Next week, the SHFE copper spot premium will be further pressured [79]. Basis - As of June 20, 2025, the basis between the Shanghai Non - ferrous Average Price of Copper No. 1 and the continuous third - month contract was 740 yuan per ton [81].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week, copper prices retreated from their highs, facing resistance around 79,500. The spot premium was under pressure, and the destocking of social inventories slowed down. The increase in steel and aluminum tariffs in the US did not strongly drive up the copper market. The US economy awaits "hard data," with the manufacturing sector declining, and employment changes should be monitored. The Fed's previous three interest rate cuts were "preventive," but there is a chance the next one could be a "recessionary" cut. [5][84] - In terms of the industrial fundamentals, the issue of low refining processing fees due to raw material supply remains severe, but it has not restricted the actual output of refined copper, with May's refined copper production hitting a new high. Domestic demand is seasonally weakening, the copper product operating rate is declining, and the momentum for further destocking of social inventories is weakening. Currently, the copper fundamentals mainly focus on international trade games, and the siphon effect of US copper prices is leading to continuous destocking of LME copper inventories. [5][84] - Overall, after copper prices faced resistance at high levels and reduced positions to decline, the macro - situation remains under pressure, and fundamental demand has weakened. Consider taking profit on near - month sold CALL options next week and continue to hold far - month bought PUT options. [5][84] 3. Summary According to the Directory Macro - level - In May 2025, the European manufacturing PMI remained stable, and the US manufacturing PMI rebounded. The eurozone's May manufacturing PMI preliminary value was 49.4%, up 0.4% from the previous month; Germany's manufacturing increased by 0.4% to 48.8%, and France's by 0.8% to 49.5%. The US May S&P Global manufacturing PMI preliminary value was 52.3%, up 2.1 percentage points month - on - month. China's May manufacturing PMI was 49.5%, up 0.5 percentage points month - on - month, but still below the boom - bust line for two consecutive months. New orders and new export orders were still weak, and demand was under pressure due to tariff games. [12] - Although the US raised steel and aluminum tariffs to 50%, which strengthened the tariff expectation for copper in the 232 investigation, the impact on the copper market was not as strong as the previous time, and it was not enough to continuously drive up the market. The US economy awaits "hard data," with the manufacturing sector declining, and employment changes should be monitored. [5][13][84] Industry Fundamentals Copper Concentrate Supply - In December 2024, global copper mine production was 2.096 million tons, a year - on - year increase of 4.96%. From January to December 2024, global copper concentrate production was 22.835 million tons, a year - on - year increase of 2.54%. In March 2025, global copper mine production was 1.969 million tons, a year - on - year increase of 3.69%. In March 2025, the global refined copper market had a supply surplus of 17,000 tons, and in February, it was 180,000 tons. [21] - In December 2024, China imported 2.522 million tons of copper concentrates and their ores, a month - on - month increase of 12.3% and a year - on - year increase of 1.7%. From January to December 2024, China's cumulative imports of copper ores and concentrates were 28.114 million tons, a cumulative year - on - year increase of 2.1%. In April 2025, China imported 2.924 million tons of copper ores and concentrates; from January to April, China imported 10.031 million tons, a year - on - year increase of 7.8%. [24] TC (Treatment and Refining Charges) - As of June 13, the copper concentrate index (weekly) was reported at - 44.75 US dollars per dry ton, a decrease of 1.46 US dollars per dry ton from the previous period. The spot market trading of copper concentrates was inactive this week. [29] Refined Copper Production - In May, SMM's domestic electrolytic copper production increased by 12,600 tons month - on - month, an increase of 1.12%, and a year - on - year increase of 12.86%. From January to May, the cumulative production increased by 544,800 tons, an increase of 11.09%. In June, it is expected that the domestic electrolytic copper production will decrease by 7,200 tons month - on - month, a decrease of 0.63%, and a year - on - year increase of 126,100 tons, an increase of 12.55%. From January to June, the cumulative production is expected to increase by 670,900 tons, an increase of 11.34%. [37] Refined Copper Imports - In 2024, China imported 3.7388 million tons of refined copper, a cumulative year - on - year increase of 6.49%. In December 2024, imports were 370,400 tons, a month - on - month increase of 2.93% and a year - on - year increase of 18.88%. In 2024, China exported 457,500 tons of refined copper, a cumulative year - on - year increase of 63.86%. In December 2024, exports were 16,700 tons, a month - on - month increase of 44.06% and a year - on - year increase of 55.61%. In April 2025, China imported 250,000 tons of electrolytic copper, a month - on - month decrease of 19.06% and a year - on - year decrease of 11.97%. [43] Scrap Copper Supply - In December 2024, China's imports of copper scrap and fragments were 217,500 tons, a month - on - month increase of 25% and a year - on - year increase of 9%. In April 2025, China's imports of copper scrap and fragments showed a "month - on - month recovery and year - on - year contraction" trend, with a single - month import of 204,700 tons, a month - on - month increase of 7.92% but a year - on - year decrease of 9.46%. From January to April, cumulative imports were 777,000 tons, a year - on - year slight decrease of 0.81%. The supply of recycled copper raw materials in the market is still very tight. [46] Consumption - end - **Power and Grid Investment**: In 2024, from January to December, power investment was 1.168722 trillion yuan, a year - on - year increase of 12.14%, and grid investment was 608.258 billion yuan, a year - on - year increase of 15.26%. In 2025, from January to April, power investment was 193.3 billion yuan, a year - on - year increase of 1.1%, and grid investment was 140.8 billion yuan, a year - on - year increase of 14.6%. [52] - **Air - conditioners**: In December 2024, the monthly air - conditioner production was 23.695 million units, a year - on - year increase of 12.9%. From January to December 2024, the cumulative air - conditioner production was 265.9844 million units, a year - on - year increase of 9.7%. In 2025, from January to April, the air - conditioner production was 105.314 million units, a year - on - year increase of 7.2%, and the year - on - year growth rate of monthly production slowed down. [56] - **Automobiles**: In May 2025, China's automobile production and sales were 2.649 million and 2.686 million units respectively, a month - on - month increase of 1.1% and 3.7%, and a year - on - year increase of 11.6% and 11.2%. From January to May, automobile production and sales were 12.826 million and 12.748 million units respectively, a year - on - year increase of 12.7% and 10.9%. In May 2025, new energy vehicle production and sales were 1.27 million and 1.307 million units respectively, a year - on - year increase of 35% and 36.9%. From January to May, new energy vehicle production and sales were 5.699 million and 5.608 million units respectively, a year - on - year increase of 45.2% and 44%. [60] - **Real Estate**: In 2024, from January to December, the real estate completion area was 737 million square meters, a year - on - year decrease of 27.7%, and the new construction area decreased by 23% year - on - year. In May 2025, the real estate completion area was 184 million square meters, a year - on - year decrease of 17.3%, and the new construction area decreased by 22.8% year - on - year. [62] Other Elements Inventory - As of June 13, the total inventory of the three major exchanges was 412,400 tons, a weekly decrease of 15,200 tons. LME copper inventory decreased by 18,000 tons to 114,500 tons, SHFE inventory increased by 5,461 tons to 101,900 tons, and COMEX copper inventory increased by 8,170 tons to 196,000 tons. As of June 12, the domestic bonded - area inventory was 59,700 tons, an increase of 1,700 tons from last week. [64] CFTC Non - commercial Net Positions - As of June 10, the CFTC non - commercial long net position was 26,351 lots, a weekly increase of 2,257 lots. The non - commercial long position was 72,101 lots, a weekly increase of 852 lots, and the non - commercial short position was 45,750 lots, a weekly decrease of 1,405 lots. [68] Premiums and Discounts - As of June 13, the LME copper spot premium was 73.41 US dollars per ton. The LME copper spot turned to a premium and rose. The LME copper inventory is shifting in two directions, with some Asian copper inventory flowing to the US market and some European Russian copper inventory flowing to the Chinese market. [78] - During the week, copper prices first rose and then fell, and the spot premium stopped falling and rebounded. Next week, it is expected that there will be concentrated arrivals of goods such as those from Russia. After the contract change, the spot will still start with a high - premium quote, but the transaction is expected to gradually fall back to around 100 yuan per ton. [78] Basis - As of June 13, 2025, the basis between the Shanghai Non - ferrous average price of Copper 1 and the continuous third - month contract was 1,080 yuan per ton. [80] Market Outlook - Macro - level: Copper prices retreated from their highs this week, facing resistance around 79,500. The spot premium was under pressure, and the destocking of social inventories slowed down. The increase in steel and aluminum tariffs in the US was not enough to continuously drive up the market. The US economy awaits "hard data," with the manufacturing sector declining, and employment changes should be monitored. There is a chance that the Fed's next interest rate cut could be a "recessionary" cut. [5][84] - Industry fundamentals: The issue of low refining processing fees due to raw material supply remains severe, but it has not restricted the actual output of refined copper, with May's refined copper production hitting a new high. Domestic demand is seasonally weakening, the copper product operating rate is declining, and the momentum for further destocking of social inventories is weakening. The copper fundamentals mainly focus on international trade games, and the siphon effect of US copper prices is leading to continuous destocking of LME copper inventories. [5][84] - Strategy: Overall, after copper prices faced resistance at high levels and reduced positions to decline, the macro - situation remains under pressure, and fundamental demand has weakened. Consider taking profit on near - month sold CALL options next week and continue to hold far - month bought PUT options. [5][84]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - Copper prices strengthened at the end of the week after fluctuations, with tariff expectation pricing disturbing the market again. The increase in US steel and aluminum tariffs to 50% has led to stronger tariff expectations for copper, but this driver is not strong enough to sustain the upward trend of the market. The US economy is waiting for "hard data", with the manufacturing sector declining, and attention should be paid to changes in employment conditions. The Fed's previous three interest rate cuts were "preventive", but the interest rate is still at a restrictive level, and the next rate cut may be a "recessionary rate cut" [5][85]. - The problem of low refining processing fees due to raw material supply remains severe, but it has not restricted the actual output of refined copper, and the refined copper output in May reached a new high. Domestic demand has seasonally weakened, the copper product operating rate has declined, and the momentum for further destocking of social inventories has weakened. Currently, the copper fundamentals mainly focus on international trade games. After the price increase of COMEX copper, the price relationship is COMEX copper > LME copper > Shanghai copper, and the domestic spot buying has weakened [6][86]. - It is recommended to consider selling CALL options for the near - month contracts and buying PUT options for the far - month contracts [6][86]. Summary by Directory Macro - level - In May, the European manufacturing PMI was stable, and the US manufacturing PMI rebounded. The eurozone's May manufacturing PMI preliminary value was 49.4%, up 0.4% from the previous month; Germany's manufacturing increased by 0.4% to 48.8%, and France's manufacturing increased by 0.8% to 49.5%. The US May S&P Global manufacturing PMI preliminary value was 52.3%, up 2.1 percentage points month - on - month. China's May manufacturing PMI was 49.5%, up 0.5 percentage points month - on - month, but it has been below the boom - bust line for two consecutive months, and the demand side is under pressure due to tariff games [12]. - The increase in US steel and aluminum tariffs to 50% has led to stronger tariff expectations for copper, and the price difference between COMEX copper and LME copper has widened to over $1000, but the driving force is not as strong as the previous time [5][13][85]. Industry Fundamentals Copper Concentrate Supply - In December 2024, the global copper mine output was 2.096 million tons, a year - on - year increase of 4.96%, and the annual output in 2024 was 22.835 million tons, a year - on - year increase of 2.54%. In March 2025, the global copper mine output was 1.969 million tons, a year - on - year increase of 3.69%. The global refined copper market had a supply surplus of 17,000 tons in March 2025 and 180,000 tons in February [21]. - In December 2024, China imported 2.522 million tons of copper concentrates and its ores, a month - on - month increase of 12.3% and a year - on - year increase of 1.7%. From January to December 2024, the cumulative import was 28.114 million tons, a cumulative year - on - year increase of 2.1%. In April 2025, China imported 2.924 million tons of copper concentrates and its ores; from January to April 2025, the cumulative import was 10.031 million tons, a year - on - year increase of 7.8% [24]. TC (Treatment and Refining Charges) - As of June 6, the copper concentrate index (weekly) was reported at - $43.29 per dry ton, an increase of $0.27 from the previous period. The second mid - year negotiation between Chinese smelters and Antofagasta has not started yet [28]. Refined Copper Output - In May, SMM's electrolytic copper output in China increased by 12,600 tons month - on - month, a rise of 1.12%, and a year - on - year increase of 12.86%. From January to May, the cumulative output increased by 544,800 tons, a rise of 11.09%. It is estimated that the output in June will decrease by 7,200 tons month - on - month, a decline of 0.63%, but a year - on - year increase of 126,100 tons, a rise of 12.55% [36]. Refined Copper Imports - In 2024, China imported 3.7388 million tons of refined copper, a cumulative year - on - year increase of 6.49%; in December 2024, the import was 370,400 tons, a month - on - month increase of 2.93% and a year - on - year increase of 18.88%. In 2024, China exported 457,500 tons of refined copper, a cumulative year - on - year increase of 63.86%; in December 2024, the export was 16,700 tons, a month - on - month increase of 44.06% and a year - on - year increase of 55.61%. In April 2025, China imported 250,000 tons of electrolytic copper, a month - on - month decrease of 19.06% and a year - on - year decrease of 11.97% [42]. Scrap Copper Supply - In December 2024, China imported 217,500 tons of copper scrap and waste, a month - on - month increase of 25% and a year - on - year increase of 9%. In 2024, the cumulative import was 2.25 million tons, a cumulative year - on - year increase of 13.26%. In April 2025, the import of copper scrap and waste was 204,700 tons, a month - on - month increase of 7.92% but a year - on - year decrease of 9.46%. From January to April 2025, the cumulative import was 777,000 tons, a year - on - year slight decrease of 0.81% [45]. Refined - Scrap Spread - In May, the operating rate of recycled copper rod enterprises was 29.92%, lower than the expected 32.74%, a month - on - month decrease of 3.97% and a year - on - year decrease of 12.13%. In June, as orders approach the delivery period, the operating rate of recycled copper rod enterprises may increase slightly [48]. Consumption - end - **Power and Grid Investment**: In 2024, the cumulative power investment from January to December was 1.168722 trillion yuan, a year - on - year increase of 12.14%, and the grid investment was 608.258 billion yuan, a year - on - year increase of 15.26%. From January to April 2025, the cumulative power investment was 193.3 billion yuan, a year - on - year increase of 1.1%, and the grid investment was 140.8 billion yuan, a year - on - year increase of 14.6% [52]. - **Air - conditioners**: In December 2024, the monthly output of air - conditioners was 23.695 million units, a year - on - year increase of 12.9%; from January to December 2024, the cumulative output was 265.9844 million units, a year - on - year increase of 9.7%. From January to April 2025, the output was 105.314 million units, a year - on - year increase of 7.2%, with a decreasing growth rate [56]. - **Automobiles**: In April 2025, the production and sales of automobiles were 2.619 million and 2.59 million units respectively, a year - on - year increase of 8.9% and 9.8% respectively. From January to April 2025, the production and sales were 10.175 million and 10.06 million units respectively, a year - on - year increase of 12.9% and 10.8% respectively. In April 2025, the production and sales of new energy vehicles were 1.251 million and 1.226 million units respectively, a year - on - year increase of 43.8% and 44.2% respectively. From January to April 2025, the production and sales were 4.429 million and 4.3 million units respectively, a year - on - year increase of 48.3% and 46.2% respectively [60]. - **Real Estate**: In 2024, the cumulative real estate completion area from January to December was 737 million square meters, a year - on - year decrease of 27.7%, and the new construction area decreased by 23% year - on - year. In April 2025, the completion area was 156 million square meters, a year - on - year decrease of 16.9%, and the new construction area decreased by 23.8% year - on - year [62]. Other Elements Inventory - As of June 6, the total inventory of the three major exchanges was 427,600 tons, a weekly decrease of 8,614 tons. LME copper inventory decreased by 17,000 tons to 132,400 tons; SHFE inventory increased by 1,613 tons to 107,400 tons; COMEX copper inventory increased by 7,250 tons to 187,900 tons. The domestic bonded - area inventory was 58,000 tons as of June 5, an increase of 3,800 tons from the previous week [65]. CFTC Non - commercial Net Position - As of June 3, the CFTC non - commercial long net position was 24,094 lots, a weekly increase of 1,513 lots. The non - commercial long position was 71,249 lots, a weekly increase of 1,305 lots, and the non - commercial short position was 47,155 lots, a weekly decrease of 208 lots [69]. Premium and Discount - As of June 6, the LME copper spot premium was $69.84 per ton. The LME copper spot has turned to a premium and is rising. Attention should be paid to the potential risk of a short squeeze in the LME market. The domestic spot market has a large price difference between different brands, and attention should be paid to the risk of an expanded monthly spread next week [79]. Basis - As of June 6, 2025, the basis between the average price of Shanghai Non - ferrous 1 copper and the continuous third - month contract was 80 yuan per ton [81].

Group 1 - The Federal Reserve is unlikely to cut interest rates in the short term, especially not preemptively, with future rate cuts depending on tariff negotiations [1] - If tariff negotiations do not yield substantial progress, the Fed may be forced to initiate "recession-style" rate cuts, potentially reducing rates by 100 basis points by the end of the year [1] - Conversely, if effective results are achieved in tariff negotiations, rate cuts may be delayed until December, with a more moderate reduction [1] Group 2 - Huatai Securities maintains a configuration suggestion focused on mid-term dividends, domestic demand, and technology, indicating a moderately positive short-term outlook [2] - The recent announcement of a comprehensive financial policy to stabilize the market is expected to support risk appetite among market participants [2] - The focus on technology and consumption sectors is reaffirmed as key areas for policy support [2] Group 3 - China Galaxy Securities continues to view the banking sector as having strong configuration value, supported by a series of financial policies including reserve requirement ratio cuts and interest rate reductions [3] - The release of liquidity and innovation in structural tools are expected to optimize the credit structure of banks [3] - The accumulation of positive fundamental factors in the banking sector is anticipated to accelerate the realization of its dividend value [3]

Core Viewpoint - The Federal Reserve's decision to maintain interest rates in May aligns with market expectations, indicating a cautious approach amid rising risks of both unemployment and inflation, suggesting a potential "stagflation" scenario [1][2] Monetary Policy Outlook - The absence of new dot plots and economic forecasts means the monetary policy statement is the only document to consider, highlighting the Fed's awareness of the dual risks of rising unemployment and inflation [2] - Fed Chair Powell's comments suggest that despite the rising risks, economic data has not shown significant deterioration, allowing the Fed to remain patient and avoid preemptive rate cuts [3] Economic Conditions - Current economic indicators, such as a stable labor market and low unemployment, do not warrant immediate action from the Fed, with Powell emphasizing that the policy is "well-positioned" [3] - The Fed's ability to support the economy is constrained by potential inflationary pressures from tariffs, contrasting with the more favorable conditions during the previous trade tensions in 2019 [3] Future Rate Cut Scenarios - The Fed's future rate cut decisions will largely depend on the outcomes of tariff negotiations, with two potential scenarios outlined: 1. If trade talks fail and tariffs remain high, the Fed may be forced into a "recession-style" rate cut of up to 100 basis points by year-end [4] 2. If effective results from trade negotiations are achieved, the first rate cut may be delayed until December, with a more moderate reduction [4] Market Implications - The uncertainty surrounding tariff negotiations and the rising "stagflation" risks create a challenging macroeconomic environment for capital markets, as the Fed adopts a wait-and-see approach rather than proactive rate cuts [5]

Core Viewpoint - The Federal Reserve's decision to maintain interest rates in May aligns with market expectations, indicating a cautious approach amid rising unemployment and inflation risks, suggesting a potential "stagflation" environment [1] Summary by Relevant Sections - **Monetary Policy Outlook** - The Federal Reserve is not expected to cut interest rates in the short term, particularly not preemptively [1] - Future rate cuts will depend on the progress of tariff negotiations, with a potential for a "recession-style" cut of 100 basis points by year-end if negotiations do not yield substantial results [1] - **Economic Conditions** - Current economic data remains robust, which contributes to the Fed's reluctance to act hastily [1] - If effective outcomes from tariff negotiations are achieved, the Fed may delay rate cuts until December, with a more moderate reduction expected [1]