ab 16 December 2025 Global Research Mining Strategy China Demand: Signals slow in Nov-25 China's commodity demand indicators weaken in Nov-25 November's commodity demand metrics deteriorated further. Retail sales significantly underperformed expectations, marking the weakest result in three years, while the downturn in the property sector worsened. Sustained weakness from here may present downside risks to demand expectations and prices, especially given economic decision makers in China may delay policy un ...

Core Insights - Freeport-McMoRan's Q3 2025 revenues rose to approximately US$6.97 billion, a modest increase from US$6.79 billion in Q3 2024, despite a decline in production and sales due to operational disruptions at the Grasberg Mine [2][3] - The company reported a net income of around US$674 million, or US$0.46 per share, up from US$0.36 in the same quarter last year, driven by higher realized commodity prices [2][3] - Copper production decreased by roughly 13.2% year-over-year to 912 million pounds, with consolidated copper sales dropping to 977 million pounds from 1,035 million pounds a year ago [2][3] Production and Operational Challenges - A significant safety incident at the Grasberg Mine in September 2025 led to a halt in operations, resulting in a force-majeure declaration for exports from Indonesia [3][5] - Despite reduced production volumes, Freeport maintained profitability due to higher average commodity prices, with copper averaging US$4.68 per pound (up ~9% year-over-year) and gold at approximately US$3,539 per ounce [3][5] Financial Performance and Cost Management - The consolidated unit net cash cost for copper remained stable at approximately US$1.40 per pound, below guidance expectations, indicating effective cost management [4] - Operating cash flow for Q3 reached over US$1.6 billion, despite a decrease compared to the previous quarter, showcasing the company's financial resilience [4] Geographic Diversification and Future Outlook - Freeport's operations in the Americas continue to produce copper, gold, and molybdenum, providing geographic diversification that mitigates the impact of the Grasberg disruption [4][6] - The company commenced the quarter with strong cash reserves and manageable debt, allowing flexibility to navigate current challenges and sustain investments [5][6] - Future performance will depend on the speed of restoring output at Grasberg and the strength of global demand for copper and gold, driven by infrastructure and renewable energy projects [5][7] Investment Valuation - Freeport's stock is valued at $46, approximately 7% above the current market price, reflecting a solid opportunity for rebound given its global presence and balanced mix of metals [7]

Group 1 - Brinker has been significantly impacted by the decline in cattle prices, but it is showing signs of recovery and has been upgraded [1][2] - Texas Roadhouse and other companies have faced rising commodity costs, which have increased by 8% [2] - Companies like Walmart and Costco are praised for maintaining their prices and not engaging in price gouging, which is seen as a positive business practice [3][4] Group 2 - Agelant, a company previously associated with HP, is performing well and has reached a 52-week high, indicating strong movement in the drug sector [5] - The banking sector and non-tech companies are also showing positive trends, suggesting a shift in market dynamics [5] - There is a focus on helping investors make money rather than engaging in speculative trading [6]

Summary of Key Points from Conference Call Industry Overview Basic Materials - China - **Copper Prices**: LME copper rose 1.5% WoW to US$10,856/t, while the China price increased 1.3% WoW to RMB87,200/t [1][31] - **Aluminum Prices**: LME aluminum slipped 0.2% WoW to US$2,830/t, while the China aluminum price increased 1.7% WoW to RMB21,910/t. Domestic aluminum margins improved by RMB395/t WoW to RMB6,094/t due to lower power costs [1][31][52] - **Gold Prices**: COMEX gold climbed 2% WoW to US$4,084/oz [1][11] - **Lithium Prices**: Average price of domestic battery-grade lithium carbonate (99.5%) rose 5.9% WoW to RMB85.2k/t [1][55] - **Uranium Prices**: Uranium U₃O₈ spot prices settled at US$77.7/lb, down 2.7% WoW [1][57] - **Cobalt Prices**: China cobalt spot price edged up 1% WoW to RMB395,000/t [1][63] Steel Industry - **Finished Steel Prices**: Rebar prices edged up 0.2% WoW to RMB3,218/t, and HRC rose 0.2% WoW to RMB3,298/t [2][66] - **Inventory and Consumption**: Finished steel inventory fell 1.7% WoW to 14.8 million tons, while apparent consumption slipped 0.7% WoW to 8.6 million tons [2][66] - **Iron Ore Prices**: Iron ore prices declined 1% WoW to USD104/t [2][66] - **Profit Margins**: Higher coke costs pressured margins, with rebar narrowing by RMB28/t WoW to –RMB392/t and HRC contracting by RMB36/t to –RMB380/t [2][66][75] Cement Industry - **Cement Prices**: Average national cement price traded higher by 0.6% WoW to RMB345/t. Prices in various provinces showed mixed trends [3][88] - **Demand Recovery**: National cement demand slightly recovered amid favorable weather conditions, with producers planning to push prices higher by year-end [3][88] - **Shipment and Inventory Ratios**: Nationwide shipment ratio decreased by 0.3 percentage points WoW to 40.0%, while inventory ratio was at 69.4%, down 0.2 percentage points WoW [3][20] Paper and Glass Industries - **Paper Prices**: Paper price rose by 1.76% WoW to RMB3,669/t, supported by supply shrinkage and low inventory [3][99] - **Glass Prices**: National average float glass price settled lower by 0.16% WoW to RMB1,195/t amid lukewarm demand. Xinyi float glass GPM was down 0.5 percentage points to 10.8% [3][22][98] Solar Materials - **Polysilicon Prices**: N-type polysilicon and granular silicon prices remained stable at RMB53/kg and RMB51/kg, respectively [3][109] - **Solar Glass Capacity**: Solar glass daily capacity climbed 1.43% WoW to 88,590t/day, with inventory days expanding 6.5% WoW to 25.63 [3][122] Additional Insights - **Market Sentiment**: The end of the U.S. government shutdown eased risk-off sentiment, supporting copper prices [1][31] - **Cement Producers' Strategy**: Cement producers are looking to increase prices to secure more profit by year-end [3][88] - **Steel Mill Margins**: Spot cash margins at steel mills indicate a challenging environment with negative margins for both rebar and HRC [2][75][81] This summary encapsulates the key points from the conference call, highlighting the performance and trends across various sectors within the basic materials industry in China.

Market Overview - U.S. stocks experienced a decline, with the Nasdaq Composite falling over 350 points, Dow down 0.60% to 47,053.04, Nasdaq down 1.65% to 23,441.48, and S&P 500 down 1.05% to 6,780.03 [1] - European shares were mostly lower, with the eurozone's STOXX 600 declining 0.30% and Germany's DAX 40 dipping 0.76% [6] - Asian markets closed lower, with Japan's Nikkei 225 falling 1.74% and Hong Kong's Hang Seng declining 0.79% [7] Company Performance - Uber Technologies reported a 20% year-over-year revenue growth to $13.47 billion, exceeding analyst estimates of $13.28 billion, and adjusted EPS of 81 cents, beating the consensus estimate of 69 cents, yet its stock fell over 6% [2] - Evoke Pharma shares surged 133% to $10.71 following an acquisition agreement with QOL Medical [8] - Denny's Corporation shares rose 50% to $6.16 after announcing an all-cash acquisition deal valued at approximately $620 million [8] - Norwegian Cruise Line Holdings Ltd shares dropped 15% to $18.86 after a revenue miss in the third quarter [8] - JELD-WEN Holding, Inc. shares fell 28% to $3.01 after reporting disappointing third-quarter results and lowering FY25 guidance [8] - Sarepta Therapeutics Inc shares decreased 31% to $16.82 after reporting third-quarter results and announcing that its ESSENCE study did not meet its primary endpoint [8] Commodities - Oil prices fell 0.5% to $60.77, gold decreased by 1.1% to $3,970.20, silver dropped 1.5% to $47.345, and copper fell 2.5% to $4.9450 [5] Economic Indicators - The Logistics Manager's Index remained unchanged at 57.4 in October, matching the previous month's reading [9]

Market Overview - A technology-themed selloff in the U.S. is negatively impacting Australian investors, with the ASX 200 expected to decline by -0.32% at the market open on Thursday [1] - The dip in Wall Street is contributing to a generally damp mood among Australian shares, despite the ASX not being heavily exposed to tech [2] Commodity Performance - Gold, silver, and platinum have seen significant declines, causing investor unease, although the exodus from gold appears to be slowing down [2][3] - In the commodities market, iron ore increased by +0.57% to $104.15 per tonne, while Brent crude rose by +3.5% to $63.45 per barrel [7] Company News - Rio Tinto (ASX: RIO) is considering a deal with its largest shareholder, Chinalco, which would allow the company to buy back its London-listed stock, potentially requiring the divestment of projects like Simandou and Oyu Tolgo [4] - Rox Resources (ASX: RXL) has received underground mining permits for its Youanmi Gold Project in Western Australia, marking a significant development for the explorer [5] - Companies such as BHP Group (ASX: BHP), Cochlear (ASX: COH), and Brambles (ASX: BXB) are scheduled for annual general meetings, with Genesis Energy (ASX: GMD) reporting a strong first quarter [6]

Market Overview - U.S. stocks experienced gains, with the Nasdaq Composite increasing by over 100 points, the Dow up 0.06% to 46,299.96, the NASDAQ climbing 0.52% to 22,639.61, and the S&P 500 rising 0.33% to 6,666.08 [1] - Communication services shares rose by 1.6%, while health care stocks saw a slight increase of 0.1% [1] Company Performance - Abbott Laboratories' stock fell approximately 2.6% after reporting third-quarter sales of $11.37 billion, slightly below the consensus estimate of $11.40 billion [2] - The company reported adjusted earnings of $1.30, aligning with Wall Street estimates and within the management guidance of $1.28-$1.32 [2] - Abbott narrowed its fiscal 2025 adjusted earnings guidance from a range of $5.10 to $5.20 per share to $5.12 to $5.18 per share, compared to the consensus of $5.15 per share [3] Notable Stock Movements - Veritone, Inc. shares surged 68% to $9.19 following new contract wins and an updated Q3 financial outlook [9] - Genprex, Inc. saw a significant increase of 269% to $0.9208 due to upcoming presentations at a major conference [9] - Omeros Corporation's shares rose 131% to $9.49 after Novo Nordisk acquired its global rights to Zaltenibart [9] - Yueda Digital Holding's shares plummeted 86% to $0.2001 after announcing a $28 million registered direct offering [9] - Largo Inc. shares dropped 43% to $1.43 following the pricing of a $23.4 million registered direct offering and private placement [9] - Aqua Metals, Inc. fell 39% to $18.11 after raising $13 million from an institutional investor [9] Commodity Market - Oil prices increased by 0.3% to $58.89, while gold rose by 1.2% to $4,213.60 [6] - Silver traded up 1.6% to $51.405, and copper saw a slight increase of 0.1% to $5.0250 [6] Economic Indicators - The NY Empire State Manufacturing Index rose by 19.4 points to a reading of 10.7 in October, exceeding market expectations of -1.0 [11]

Market Indicators - Value stocks 表明市场预期货币政策将放松 [1] - Commodity prices 表明市场预期货币政策将放松 [1] - Yield curve 表明市场预期货币政策将放松 [1]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Mining and Commodities - **Region**: China Core Insights 1. **China's Commodity Demand**: - Commodity demand indicators in China showed broad weakness in July, with industrial production growth missing expectations at +5.7% y/y compared to +6.8% prior, and retail sales significantly weaker at +3.7% y/y versus consensus of +4.6% [1][3] - The overall economic weakness raises the risk of stimulus measures, which could positively impact sentiment and commodity prices if implemented meaningfully [1][6] 2. **Iron Ore Market**: - The property market in China remains weak, with new starts and sales down -19% and -5% y/y respectively. The real estate climate index is deteriorating [2] - A recent policy announcement of Rmb300 billion for inventory purchases is a positive step, but more support is needed to stabilize iron ore prices, which are expected to remain in the US$90-100/t range [2] - Crude steel output decreased by -4% y/y in June, indicating domestic demand weakness, consistent with reduced construction activity [2] 3. **Base Metals**: - Industrial production growth has lost momentum, and retail sales are below expectations, suggesting that stimulus efforts are losing effectiveness [3] - Despite the bearish indicators, there is a constructive outlook if further stimulus is introduced [3] 4. **Coal Sector**: - Coal production in China fell by -4% y/y, while coke production increased by +1% y/y. The introduction of the 276-Working Day Rule may ease oversupply in the coal market [4] - Spot met coal prices have risen by +12% over the past month to approximately US$192/t [4] 5. **Battery Raw Materials and EV Market**: - Electric vehicle (EV) output and sales remain strong, with a +19% y/y increase in output. Exports of EVs have reached new highs [5] - Continued robust domestic EV sales and open trade relationships are expected to support demand for battery raw materials [5] Additional Insights 1. **Investment Outlook**: - UBS remains cautious about large-scale stimulus but acknowledges potential upside risks for commodity prices if meaningful stimulus occurs [6] - Companies most leveraged to potential upside scenarios include MIN and FMG, while RIO and BHP are seen as neutrals that would also benefit [6] 2. **Economic Indicators**: - Key economic indicators from China show a mixed picture, with manufacturing PMI at 49.2, indicating contraction, and retail sales growth slowing significantly [8] - The overall economic environment suggests a need for careful monitoring of trade developments and potential policy responses [6][8] 3. **Risks in the Mining Sector**: - The mining sector faces inherent risks, including volatility in commodity prices and currencies, as well as political, financial, and operational risks that could impact performance [51] This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current state of the mining industry and its outlook in China.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Economics** sector, specifically analyzing inflation trends in July 2025 and their implications for the economy and investment landscape [1] Core Insights - **PPI Improvement**: The Producer Price Index (PPI) showed a modest month-over-month improvement to **-0.2%** in July from **-0.4%** in June, driven by a rebound in upstream prices despite continued weakness in downstream prices [2][11] - **CPI Trends**: The Consumer Price Index (CPI) remained stable, with core inflation at approximately **1%** month-over-month seasonally adjusted annual rate (SAAR) since the policy pivot in September 2024, supported by strong demand for manufactured goods [4][11] - **Commodity Prices**: There is an expectation for continued outperformance of commodity prices in the near term, although downstream pricing improvements may be limited due to subdued final demand [5][11] Detailed Data Analysis - **CPI and PPI Breakdown**: - July CPI YoY was **0.0%**, with food prices declining by **-1.6%** and non-food prices increasing by **0.3%** [7] - Core CPI (excluding food and energy) rose to **0.8%** YoY, indicating resilience in manufactured goods [7] - PPI YoY showed a decline of **-3.6%**, with specific sectors like mining and quarrying experiencing a significant drop of **-14.0%** [7] Future Outlook - **Inflation Expectations**: The low base effect in August and September is expected to support both core CPI and PPI YoY figures, although a high base will eventually constrain growth [5][11] - **Gradual Reflation**: The overall reflation process is anticipated to be gradual, influenced by anti-involution measures, rebalancing efforts, and export challenges [11] Additional Considerations - **Consumption Goods Support**: The consumption goods trade-in program is highlighted as a key support for goods CPI, while services inflation, particularly in tourism, is losing momentum [4][11] - **High-Frequency Data**: High-frequency data indicates a continued rise in commodity prices towards the end of July, suggesting a firm footing for August's MoM figures [3] This summary encapsulates the essential insights and data from the conference call, providing a comprehensive overview of the current economic conditions and future expectations in the China Economics sector.