Continued in the following section China Materials | Asia Pacific Anti-Involution Trip: Key Takeaways We hosted a five day trip in China to check on the progress of anti-involution across multiple segments. Here we summarize overall intentions of the effort, along with impact on steel, lithium, and coal fundamentals. Anti-involution is intended to stabilize industry profits and help curb deflation: We expect that eventually, after this program is completed, annual production will be decided based on the NDR ...

September 8, 2025 08:45 AM GMT China Express | Asia Pacific "Anti-Involution": Update #5 - Widespread Price Hikes, What's Next? Key Takeaways We talked to management from key players and summarize recent developments in "anti-involution" initiatives. Recent price hikes: Market share lock-up period: Industry volume growth: ZTO and YTO both mentioned industry volume growth decelerated in August. M Update Morgan Stanley Asia Limited+ Qianlei Fan, CFA Equity Analyst Qianlei.Fan@morganstanley.com +852 2239-1875 ...

Specialist Sales APAC Specialist Sales 04 September 2025 J P M O R G A N JPM | CHINA - Cooling measures… Positioning headwinds vs Cyclical tailwinds Matthew See +852 2800 8889 matthew.see@jpmorgan.com Headlines that China's financial regulators are considering some stock market cooling measures, is raising questions about whether China's +50% 1-year and +30% YTD rally (in USD) is set for a breather? Looking out the next 1-3 months, a period of consolidation looks likely - as authorities tap the breaks on th ...

September 5, 2025 03:40 PM GMT China Materials | Asia Pacific Anti-Involution Trip Day 5 On the last day of our anti-involution trip, we focus on steel, coal, copper, and macro conditions. Nuanced impact of anti-involution – complex on the macro level, larger companies likely to benefit: Broader supply consolidation would weigh on demand in the form of lower investment, job losses, and the recognition and allocation of losses. After all, exit from or lower utilization of capacities – particularly relatively ...

Some believe lithium supply faces further shutdown risk with the September 30 submission deadline approaching: There is a possibility that the other seven Yichun lepidolite mines with mining license issues may face temporary shutdown by year- end. Change in mining license mineral type could take as long as 1-2 years based on historical cases of other minerals, but this process might speed up in the case of Yichun given heavy pressure regarding local GDP. Chalco expects China's total aluminum demand to incre ...

September 1, 2025 11:07 PM GMT Global Solar China's Anti-Involution: Implications for the Global Solar Value Chain We think the consolidation of China's main solar value chain will be achieved in a more commercial and market-oriented way, with moderate government guidance. We believe the recovery pace will largely hinge on the progress of the polysilicon industry consolidation. We do not expect a substantial price recovery and profitability turnaround along the value chain in the medium term amid the lacklu ...

September 3, 2025 10:48 AM GMT China Materials | Asia Pacific Anti-Involution Trip Day 3 On the third day of our anti-involution Trip, we focused on the coal industry in Shanxi. Price rebound in July and August not making all coal mines profitable. Despite the price for both coking and thermal coal rebounding over the last two months, some ~40-50% of SOE mines are still running at a loss, with loss-making coking coal mines now representing ~20% of industry capacity. Overproduction inspection and anti-involu ...

J P M O R G A N Global Markets Strategy 31 August 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Tim Huang AC (852) 2800-4323 tim.huang@jpmorgan.com J.P. Morgan Securities (Asia Pacific) Limited/ J.P. Morgan Broking (Hong Kong) Limited Erin Zhang, CFA ...

Global Markets Strategy 31 August 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. China/Hong Kong Equity Strategy Dashboard Wendy Liu AC (852) 2800 1087 wendy.m.liu@jpmorgan.com J.P. Morgan Securities (Asia Pacific) Limited/J.P. Morgan Broking (Hong Kon ...

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the base metals industry, specifically focusing on copper and aluminum markets, and their price forecasts and dynamics [1][2][3][4]. Core Insights and Arguments - **Copper Price Forecast**: The year-end LME copper price forecast is maintained at $9,700 per ton, which is $100 below current levels. The market is expected to remain stable due to a surplus [1][10]. - **Aluminum Price Dynamics**: The support for aluminum prices from anti-involution policies in China is expected to be short-lived. Although SHFE alumina futures increased by nearly 30% from May to July, this was primarily due to market speculation regarding domestic alumina refining capacity cuts [2][3]. - **Alumina Production Capacity**: In July, 3 million tons of alumina refining capacity were added, increasing domestic capacity by over 3%. Despite expectations of reduced investments due to anti-involution policies, no cuts to existing capacity have been observed, leading to rising inventories [3][4]. - **Global Bauxite Exports**: Global bauxite exports are up 18% year-over-year year-to-date, despite a decrease in Guinean bauxite exports in the second half of the year due to seasonality and mining license cancellations [3]. - **Steel Sector Stability**: There are no signs of reduced production in the steel sector, and the weak labor market complicates the implementation of significant production cuts [4]. - **China's Economic Activity**: Broad activity data in China is weakening, with apparent consumption growth of copper and aluminum slowing in recent months [8]. - **COMEX vs. LME Copper Pricing**: Despite a 25% drop in COMEX copper prices in July, the COMEX price continues to trade at a ~1% premium to LME prices, driven by potential tariff risks on refined copper [9][51]. Additional Important Insights - **European Defense Spending**: An increase in European defense spending could boost global base metals demand, with estimates suggesting a cumulative 6% increase in European industrial metals demand by 2027 [11]. - **Copper Inventory Trends**: Global copper stocks have increased by over 500,000 tons year-to-date, indicating a substantial surplus. The estimated stock build is 290,000 tons based on supply and demand models [10][34]. - **Aluminum Demand Growth**: Global aluminum demand growth is slowing, with primary aluminum consumption in China and the rest of the world showing a decline [79][80]. - **Speculative Positioning**: Speculative positioning in the COMEX copper market remains higher compared to LME markets, indicating differing market sentiments [113][118]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the base metals industry, particularly copper and aluminum.