Group 1 - Rheinmetall will be the first defense equipment manufacturer to utilize decarbonized steel in its production [1]

Economic Performance - South Korea's GDP contracted by 0.3% in the fourth quarter of 2025, a significant slowdown from the revised 1.3% growth in the previous quarter, missing the median estimate for a 0.2% expansion [5][6][10] - The economy expanded by 1% for the entirety of 2025, aligning with estimates [5] Trade and Exports - Net exports fell by 2.1% from the previous quarter, reversing a 2.1% advance in the three months through September, likely influenced by the won's depreciation and rising import costs [1][12] - Despite the recent contraction, nominal shipments remained strong, and the country recorded a current-account surplus of approximately $118 billion in 2025, expected to rise to $135 billion in 2026 [12][14] Consumption and Investment - Private consumption growth slowed to 0.3% from a previous 1.3% gain, while government spending increased modestly by 0.6% [9] - Construction and facilities investment saw declines of 3.9% and 1.8%, respectively, indicating a broad pullback in demand [9] Market Dynamics - The Kospi index has shown resilience, briefly crossing the 5,000 mark, reflecting strong performance in export-oriented sectors, particularly in semiconductors [6][4] - The housing market has also seen a rally, with apartment prices in Seoul rising for 50 consecutive weeks, despite government efforts to cool the market [8][14] Monetary Policy and Currency - The Bank of Korea's recent shift to a neutral policy stance suggests that rate cuts are unlikely in the near term due to concerns over currency depreciation and financial stability risks [2][11] - The won has depreciated over 8% since late June, complicating the central bank's ability to ease monetary policy [11][16] Future Outlook - The government remains optimistic, forecasting 2% growth for 2026, driven by firmer consumption and stronger exports, while also focusing on managing household debt and enhancing foreign capital attraction [17][18] - Analysts suggest that domestic demand will play a crucial role in 2026, with potential upside from fiscal policy but also downside risks from increased loan repayment burdens for households [19]

Core Viewpoint - Steel Dynamics (STLD) is expected to report quarterly earnings of $1.72 per share, reflecting a 26.5% increase year-over-year, with revenues projected at $4.54 billion, a 17.2% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 0.4% in the last 30 days, indicating analysts' reassessment of their initial estimates [2]. - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3]. Revenue and Sales Projections - Analysts estimate 'External Net Sales- Steel Fabrication' to reach $362.78 million, a decrease of 8.4% from the year-ago quarter [5]. - 'External Net Sales- Steel' is projected at $3.21 billion, representing a 21.3% increase year-over-year [5]. - 'External Net Sales- Metals Recycling' is expected to be $471.84 million, a decline of 2.1% from the previous year [5]. - The consensus for 'External Net Sales- Other' is $317.61 million, indicating a 10.4% increase year-over-year [6]. Pricing and Shipment Metrics - The average external sales price for steel is projected at $1,092 per tonne, up from $1,011 per tonne a year ago [6]. - 'Steel Fabrication - Average sales price' is expected to be $2,558 per tonne, down from $2,718 per tonne in the same quarter last year [7]. - 'Steel - External Shipments' are forecasted to reach 2,939 thousand tons, compared to 2,618 thousand tons in the previous year [7]. - 'Steel Fabrication - Shipments' are estimated at 142 thousand tons, slightly down from 146 thousand tons year-over-year [8]. - 'Steel - Flat Roll shipments' are projected at 1,997 thousand tons, an increase from 1,842 thousand tons year-over-year [9]. - 'Metals Recycling - Ferrous shipments' are expected to be 1,440 thousand tons, compared to 1,421 thousand tons in the same quarter last year [9]. - 'Steel - Flat Roll shipments - Steel Processing Divisions' are estimated at 494 thousand tons, up from 460 thousand tons year-over-year [10]. Stock Performance - Steel Dynamics shares have decreased by 3% over the past month, while the Zacks S&P 500 composite has seen a decline of 0.4%. The company holds a Zacks Rank 2 (Buy), indicating expected outperformance in the near term [11].

Core Viewpoint - Analysts project that Nucor (NUE) will report quarterly earnings of $1.95 per share, reflecting a 59.8% year-over-year increase, with revenues expected to reach $7.68 billion, an 8.5% increase from the same quarter last year [1]. Earnings Estimates - The consensus EPS estimate has been revised 0.3% higher over the last 30 days, indicating a collective reevaluation by analysts [2]. - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3]. Revenue Projections - Analysts estimate 'Net sales to external customers - Steel products' will be $2.54 billion, a 7.3% increase from the previous year [5]. - The consensus for 'Net sales to external customers - Steel mills' is projected at $4.73 billion, reflecting an 11.4% year-over-year change [5]. - 'Net sales to external customers - Raw materials' are expected to reach $497.01 million, an 8.3% increase from the prior year [6]. - 'Net sales to external customers - Structural' are projected at $625.62 million, indicating a 9.6% year-over-year change [6]. Sales Volume and Pricing - Total steel products sales are projected to reach 1,070 thousand tons, up from 968 thousand tons in the same quarter last year [7]. - The estimated 'Average Steel Product Price per ton' is $2,374, compared to $2,448 in the same quarter last year [7]. - The average sales price per ton for total steel mills is expected to be $1,013, up from $926 a year ago [8]. - Sales tons to outside customers for total steel mills are projected at 4,796 thousand tons, compared to 4,580 thousand tons in the same quarter last year [8]. - Sales tons for steel sheets are expected to be 2,234 thousand tons, slightly up from 2,210 thousand tons last year [9]. - Sales tons for steel bars are projected at 1,499 thousand tons, compared to 1,445 thousand tons in the same quarter last year [9]. - Sales tons for structural steel are estimated at 461 thousand tons, up from 441 thousand tons last year [10]. - Sales tons for steel plates are expected to be 604 thousand tons, compared to 484 thousand tons in the same quarter last year [10]. Market Performance - Nucor shares have returned +6.6% over the past month, contrasting with the Zacks S&P 500 composite's -0.4% change, indicating a stronger performance relative to the market [11].

Core Insights - The article provides an overview of the performance of various mutual funds, highlighting the top and bottom performers based on net asset value changes [2][3]. Group 1: Top Performing Funds - The top 10 mutual funds with the highest net value growth on January 20 include: 1. 富国价值发现混合C with a net value of 1.2962 and a growth of 3.92% 2. 富国价值发现混合A with a net value of 1.3122 and a growth of 3.92% 3. 国投瑞银白银期货(LOF)A with a net value of 2.6095 and a growth of 3.88% 4. 富国研究精选灵活配置混合C with a net value of 2.9810 and a growth of 3.65% 5. 富国研究精选灵活配置混合D with a net value of 3.0400 and a growth of 3.61% 6. 景顺长城中国回报混合A with a net value of 1.7070 and a growth of 3.58% 7. 工银价值精选混合C with a net value of 1.1350 and a growth of 3.56% 8. 工银价值精选混合A with a net value of 1.1364 and a growth of 3.55% 9. 景顺长城中国回报混合C with a net value of 1.6810 and a growth of 3.51% 10. 景顺长城资源垄断混合(LOF)C with a net value of 0.5720 and a growth of 3.44% [2]. Group 2: Bottom Performing Funds - The bottom 10 mutual funds with the lowest net value growth on January 20 include: 1. 东财景气驱动C with a net value of 1.6980 and a decline of 6.34% 2. 东财景气驱动A with a net value of 1.7190 and a decline of 6.34% 3. 前海开源沪港深强国产业混合 with a net value of 1.7195 and a decline of 5.83% 4. 东方阿尔法瑞丰混合发起A with a net value of 1.1021 and a decline of 5.21% 5. 东方阿尔法瑞丰混合发起C with a net value of 1.0906 and a decline of 5.21% 6. 平安高端装备混合发起式A with a net value of 1.3687 and a decline of 5.02% 7. 平安高端装备混合发起式C with a net value of 1.3672 and a decline of 5.02% 8. 中加优势企业混合C with a net value of 1.9189 and a decline of 4.98% 9. 中加优势企业混合A with a net value of 2.0087 and a decline of 4.98% 10. 长城久嘉创新成长混合C with a net value of 2.7860 and a decline of 4.77% [3]. Group 3: Market Overview - The Shanghai Composite Index experienced a slight decline after a peak, while the ChiNext Index showed a significant drop. The total trading volume reached 2.80 trillion, with a ratio of advancing to declining stocks at 2233:3102 and a limit-up to limit-down ratio of 62:23. The leading sectors included real estate, chemical fiber, and water utilities, each with gains exceeding 2% [5].

Core Insights - ArcelorMittal has significantly outperformed the market, with its stock value more than doubling over the past year, driven by financial enhancements and strategic changes [2] - The company has transformed from a sluggish industrial entity into a prominent turnaround narrative in the materials sector [2] Financial Performance - For the first nine months of 2025, ArcelorMittal reported a net income of $3.0 billion, up from $1.7 billion in the same period of 2024 [4] - Adjusted net income was $2.3 billion, leading to an adjusted basic EPS of approximately $3.00, while reported basic EPS increased to about $3.90 [4] - Revenues for 9M 2025 totaled around $46.4 billion, slightly below the $47.7 billion recorded in the previous year, reflecting weaker steel prices [5] - Operating income improved to about $3.3 billion, up from $2.8 billion in 9M 2024, indicating stronger cost management [5] - Iron-ore production increased to roughly 35.7 million tonnes from 29.8 million tonnes, contributing positively to earnings [5] Strategic Focus - Management has emphasized long-term strategic themes that resonate well with market expectations, including transitioning towards higher-margin, lower-carbon products [6] - The company is committed to optimizing its portfolio by divesting underperforming assets and enhancing its global presence [9] Industry Dynamics - Global steel demand, particularly outside of China, showed resilience in 2025, with expectations of a 2.5%–3.5% increase in consumption [7] - Trade protections and policy support in Europe, such as carbon border adjustments and stricter import quotas, are seen as structural positives for local producers like ArcelorMittal [8] Future Outlook - The outlook for ArcelorMittal hinges on its ability to navigate macro uncertainties, regulatory challenges, and cyclical demand fluctuations [12] - Key pillars for future performance include continued earnings and cash flow growth, favorable policy and trade dynamics, and successful execution of strategic investments [14]

Core Insights - Aperam has launched an innovative "slinky" production method that utilizes an in-plane helical winding process for creating slinky stators and rotors, enhancing efficiency in electric motor production [1][2]. Group 1: Technology and Innovation - The "slinky" method adapts existing technology from the electrical steel industry to iron-cobalt (FeCo) alloys, known for their superior magnetic performance but difficult formability, thus enabling new design possibilities and material savings [2]. - This method significantly reduces material waste in production, cutting metal scrap to just 10–30% compared to conventional methods that can waste up to 70% [3]. Group 2: Market Applications - The "slinky" production method supports the future of carbon-neutral mobility, particularly in sectors such as aviation, eVTOL aircraft, and hypercars [3]. - The combination of Aperam's AFK family of iron-cobalt alloys with the "slinky" process leads to substantial performance improvements, aligning with aviation's goal of achieving net-zero carbon emissions by 2050 [5]. Group 3: Performance Metrics - The new method results in a 35% increase in power density for eVTOL aircraft, a 25% increase in torque for hypercars, and a 15% reduction in motor size, which is crucial for meeting aviation weight constraints [6].

Summary of China Basic Materials Monitor - January 2026 Industry Overview - The report focuses on the **China Basic Materials** industry, highlighting the impact of high commodity prices on demand and supply dynamics across various sectors. Key Points Demand Trends - End-user orderbooks are mostly in line with past seasonal trends as of mid-January, with **solar and machinery** sectors showing weakness while **battery** demand remains strong [1] - The surge in metal prices has led to notable changes in downstream demand across sectors such as **consumer electronics**, **hardware manufacturing**, **copper cables**, and **aluminum** in industrial and construction areas, resulting in weaker or delayed orderbooks and rising metal inventories [1] - High-frequency data indicates that in the first two weeks of January, Chinese demand is down **1-9% year-over-year (YoY)** for cement and construction steel, and **3-10% YoY** for aluminum and copper, while flat steel demand is up **3% YoY** [1] Supply Dynamics - Supply conditions remain heterogeneous, with consistent feedback on **cement capacity** cleaning up and ongoing capacity discipline in **coal**, but lackluster control in **steel production** [1] - Margin and pricing for **steel**, **copper**, **aluminum**, and **lithium** have improved, while **cement** and **coal** prices have remained stable [1] Sector-Specific Insights - **Cement**: Demand is lower, with a **1-9% YoY** decline noted [1] - **Aluminum and Copper**: Demand has deteriorated significantly amid high prices, with a **3-10% YoY** decline reported [1] - **Steel**: Margins have improved, but production control remains weak [1] - **Battery Materials**: Strong demand persists, leading to price hikes in solar modules, AC, LFP cathodes, and battery cells [1] Producer Feedback - A proprietary survey indicates a mixed month-over-month (MoM) trend in forward orderbooks, with **19%** of respondents reporting a pickup in January for downstream sectors and **6%** for basic materials [2] Additional Observations - The report notes that in regions with strong demand or better supply structures, price hikes have begun in specific materials, indicating a potential shift in market dynamics [1] - The overall sentiment reflects caution due to high commodity prices suppressing demand, particularly in sectors sensitive to price fluctuations [1] Conclusion - The China Basic Materials industry is currently experiencing a complex interplay of high commodity prices affecting demand and supply across various sectors. While some areas like battery materials show resilience, others like aluminum and copper are facing significant demand challenges. The mixed feedback from producers suggests a cautious outlook moving forward, with potential opportunities in regions with strong demand dynamics.

Core Insights - In 2025, national coke and steel production showed an increase year-on-year, while crude steel and pig iron production declined to multi-year lows [1] Group 1: Coke Production - In 2025, national coke production reached 50,412 million tons, a year-on-year increase of 2.9% [1] - December coke production was 4,274 million tons, with year-on-year and month-on-month growth of 1.9% and 2.5% respectively; however, the average daily production in December decreased by 0.8% to 1,380 thousand tons [1] Group 2: Steel Production - National steel production in 2025 was 144,612 million tons, reflecting a year-on-year growth of 3.1% [1] - In December, steel production was 11,531 million tons, showing a month-on-month decline of 3.8% and a year-on-year decline of 0.5%; the average daily production in December fell by 3.7% [1] Group 3: Pig Iron Production - National pig iron production in 2025 decreased by 3.0% to 83,604 million tons, marking the lowest level since 2020 [1] - December pig iron production was 6,072 million tons, with year-on-year and month-on-month declines of 9.9% and 2.6% respectively; this marked the seventh consecutive month of decline, with average daily production dropping by 5.7% [1] Group 4: Crude Steel Production - National crude steel production in 2025 fell by 4.4% to 96,081 million tons, reaching the lowest level since 2019 [1] - December crude steel production was 6,818 million tons, with year-on-year and month-on-month declines of 10.3% and 2.4% respectively; this also represented the seventh consecutive month of decline, with average daily production decreasing by 5.6% [1]

Core Thesis - Nucor Corporation is viewed positively due to its strong operational flexibility, robust demand fundamentals, and potential for attractive entry points amid a favorable supply-demand setup [1][5][7] Company Overview - Nucor Corporation manufactures and sells steel products, currently trading around $173, reflecting a premium from strong December guidance [2] - As the largest U.S. domestic steel producer, Nucor utilizes a scrap-based production model through Electric Arc Furnaces, enhancing efficiency and cost discipline [2][3] Demand Fundamentals - Demand fundamentals are strong, with a significantly higher backlog year-over-year, particularly in rebar and joists and decks, while limited exposure to the automotive sector mitigates downside risk [4] - Structural tailwinds from data center construction, grid expansion, and infrastructure investment are expected to drive incremental steel demand, positioning Nucor to capture this growth [4] Financial Health - Nucor's balance sheet is strong, characterized by ample liquidity, moderate leverage, and ongoing capital returns through buybacks [5] - Strategic investments, including in small modular reactor technology, indicate a focus on long-term cost reduction and optionality [5] Valuation and Market Position - Current valuation appears modestly elevated, but a temporary earnings-related pullback could present an attractive entry point ahead of a favorable multi-year supply-demand scenario [5] - Nucor's stock price has appreciated approximately 10% since previous coverage, driven by improved guidance and stronger demand visibility [6][7]