Core Viewpoint - The recent Central Financial Committee meeting emphasized the need to regulate low-price disorderly competition among enterprises, guide companies to improve product quality, and promote the orderly exit of outdated production capacity. This policy signal has led to a noticeable recovery in the sentiment of the bulk commodity market, with some investors anticipating market benefits similar to those from the supply-side structural reforms of 2016 [3][4]. Policy Impact Analysis - Different periods may have varying policy focuses, necessitating an in-depth analysis of the core impact range of policies. Attention should be directed towards industries with severe overcapacity, widespread losses, high proportions of outdated capacity, and strong policy constraints [4]. - Industries such as polysilicon, industrial silicon, and PVC currently exhibit persistently low profit levels, aligning with the main objectives of policy regulation. The sustainability of profit improvement in these industries hinges on the enforcement strength of policies and the effectiveness of actual capacity clearance [4][5]. Historical Context - The aluminum industry serves as an example where strong policy constraints successfully led to sustained profit improvements during the last capacity reduction phase. Historical experience indicates that there is a certain lag between policy issuance and market rebound, ultimately relying on strict enforcement to achieve profit redistribution within the industry chain [4]. Current Industry Status - Leading companies in industries like polysilicon are beginning to formulate capacity optimization plans. However, due to differences in company nature, interest conflicts, and market constraints, the realization of substantial capacity clearance in the industry will require more time for validation [5]. Profit and Capacity Overview - A summary of key indicators for various bulk commodities, including profit levels, capacity concentration, and the nature of enterprises, has been compiled for reference [6]. - For example, the profit margins and capacity concentration for several commodities are as follows: - PVC: -13% profit margin, 40% capacity concentration, state-owned enterprises [9] - Polysilicon: -13.5% profit margin, 82.23% capacity concentration, private enterprises [10] - Urea: 20% profit margin, 28% capacity concentration, state-owned enterprises [9] - Copper products show varying profit margins, with electrolytic copper at 0.31% and lithium battery copper foil at 26.07% [10].

Industry Overview Investment Rating The report does not mention the industry investment rating. Core View The report provides an overview of various industries, including production, service, upstream,中游, downstream, and market pricing, highlighting recent trends and developments in each sector. Summary by Category Production and Service Industries - Shanghai plans to build a world - class ship and offshore engineering equipment industrial cluster, aiming for an industry added - value of over 45 billion yuan by 2030 and a localisation rate of over 85% for large LNG carriers [1]. - The memory market, led by DDR4, is rapidly warming up, with DDR4 particle prices doubling in just two weeks [1]. - Six departments have issued a guidance on financial support for consumption, setting up a 500 - billion - yuan re - loan for service consumption and elderly care [1]. - Retirement pensions are exempt from personal income tax in Beijing [1]. Upstream - International oil prices decreased significantly compared to the previous day [2]. - Coal inventory in Qinhuangdao decreased [2]. - Egg prices have rebounded recently [2]. Midstream - The polyester operating rate declined, while the PX operating rate increased [3]. - The coal consumption of power plants dropped to a three - year low, and the power plant operating rate decreased [3]. Downstream - The sales of commercial housing in first - and second - tier cities have seasonally declined to a near - three - year low [4]. - The number of domestic flights has decreased cyclically [4]. Market Pricing - The credit spread of the entire industry has slightly declined recently [5]. Industry Credit Spread - The credit spreads of multiple industries, such as agriculture, forestry, animal husbandry and fishery, mining, and chemical industry, have declined this week [48]. Key Industry Price Indicators - The prices of various commodities, including agricultural products, metals, energy, and chemicals, have shown different trends, with some rising and some falling [49].

Market Overview - The A-share market is currently lacking catalysts, leading to increased volatility pressure. The downward space for large-cap stocks is relatively limited under the support of the Central Huijin Investment. Short-term focus is recommended on defensive sectors such as banks and low-volatility dividend stocks [2][4] - New consumption and innovative pharmaceuticals are facing higher adjustment risks in the short term, suggesting that investors should wait for risk release before seeking more cost-effective investment opportunities [2][4] Stock Market Factors - The large-cap value style remains dominant in the market, while the volatility of both large and small-cap styles has decreased. The volatility of value and growth styles is at a near-year low [6][8] - The excess return dispersion of industry indices is at a near-year low, with a decrease in the proportion of rising constituent stocks and an increase in industry rotation speed [6][8] - Market activity remains low, with the market volatility at a near-year low and a slight increase in turnover rate [7][8] Commodity Market Factors - In the commodity market, the trend strength of black and precious metals has decreased, while the trend strength of agricultural products has increased. The basis momentum of precious metals and non-ferrous metals has rapidly declined [19][22] - The volatility of energy and precious metals has slightly increased, while other sectors remain at near-year low volatility levels. Liquidity performance is mixed across sectors, with the energy sector at a near-year high in liquidity [19][22] Options Market Factors - The implied volatility levels of the SSE 50 and CSI 1000 show no significant trend, with the implied volatility of CSI 1000 remaining at historically low levels. The skewness of put options for CSI 1000 has increased, indicating a temporary alleviation of market concerns regarding small-cap stocks [28] Convertible Bond Market Factors - In the convertible bond market, valuations continue to rise, with the premium rate for bonds converting at 100 yuan increasing and approaching the peak seen in May. The proportion of bonds with low conversion premiums has significantly decreased, while market transaction volume remains stable within a fluctuating range [31]

Report Industry Investment Ratings - Not provided in the given content Core Views - The index of the stock index sector has stable support below and needs a driver to break through above. The A - share market opened lower and rebounded, showing a phased stabilization. The international situation is changeable in the short - term, and the index will mainly fluctuate within a range. The bond market may be affected by the central bank's bond - buying situation at the end of the month. Precious metals are affected by factors such as the Middle - East geopolitical situation and the Fed's monetary expectations, with gold and silver prices fluctuating in certain ranges. Various industrial and agricultural products are affected by factors such as supply and demand, geopolitical risks, and seasonal factors, showing different price trends and market outlooks [2] Summary by Related Catalogs Stock Index - The index has stable lower support and needs a driver for upward breakthrough. A - shares opened lower and rebounded, showing phased stabilization. It is recommended to try to buy the deeply - discounted 09 contract of the CSI 1000 on dips and sell the 09 call option around 6300 to form a covered combination [2] Treasury Bonds - Pay attention to the central bank's bond - buying situation at the end of the month. If bond - buying restarts, the 10 - year Treasury bond interest rate may break through 1.6%. Otherwise, the bond market may face phased callback pressure. In the unilateral strategy, appropriate long positions can be configured on adjustments for Treasury bond futures. In the cash - and - carry strategy, pay attention to the positive - carry strategy of the TS2509 contract [2] Precious Metals - Short - term news affects gold prices to fluctuate widely between $3300 - $3400. It is recommended to continue selling out - of - the - money call options. Silver prices are fluctuating in the range of $35.5 - $37. Try the double - selling strategy of out - of - the - money options for Shanghai silver [2] Shipping Index (European Line) - Low airline quotes drive the EC futures to fall. The 08 main contract fluctuates narrowly between 1900 - 2200. Unilateral operations should be on the sidelines for now. Pay attention to the long - materials and short - raw - materials arbitrage operation [2] Steel - Industrial material demand and inventory are deteriorating. Pay attention to the decline in apparent demand. For the iron ore market, iron - making water remains at a high level, and terminal demand shows resilience. Try short - selling on rebounds, with the upper pressure level around 720. For coking coal, the market auction non - successful bid rate has decreased, coal mine production has declined from the high level, and spot prices are weakly stable. Consider going long on coking coal at low prices or long coking coal and short coke. For coke, the fourth round of price cuts by mainstream steel mills on June 23 has been implemented, and the price is close to the phased bottom. Consider long coking coal and short coke [2] Non - ferrous Metals - Copper, aluminum, zinc, nickel, stainless steel, and other non - ferrous metals show different price trends and market characteristics. For example, copper has a narrow - range fluctuation in the main contract, and it is recommended to pay attention to the supply - side recovery rhythm and adopt a high - selling strategy for tin based on inventory and import data inflection points [2] Energy - For crude oil, geopolitical risks are still uncertain in the short - term, and fundamental factors need to be considered in the long - term. Unilateral operations should wait for the situation to become clearer. For urea, short - term demand cannot support high prices, and pay attention to agricultural demand and export conditions in July. For PX and PTA, they may be dragged down by the fall in oil prices due to the decline in geopolitical premiums [2] Chemicals - Different chemical products have different market outlooks. For example, short - fiber has an expected repair of processing fees under the expectation of factory production cuts. Bottle - chip is in the demand peak season, with an expected production cut and processing fees bottoming out [2] Agricultural Products - Different agricultural products such as soybeans, corn, palm oil, cotton, and eggs show different price trends and market characteristics. For example, soybeans follow the decline of US soybeans, and pay attention to subsequent weather - related speculation. Pig prices have rebounded due to hoarding and second - fattening, and the market sentiment is strong [2] Special Commodities - For soda ash, the surplus logic continues, and maintain a high - selling strategy on rebounds. For glass, the spot market's goods - moving situation has improved, and the short - term futures price has support [2] New Energy - For polysilicon, supply has increased, and the futures price has fallen with increased positions. For lithium carbonate, the futures price remains weak, and the fundamental pressure continues [2]

Group 1: Overall Market Performance - The commodity market saw an overall increase of 2.29% last week, with significant gains in the energy sector at 4.11% [1] - Agricultural products and black metals rose by 2.10% and 0.91% respectively, while precious metals and non-ferrous metals experienced declines of 1.76% and 0.09% [1] Group 2: Specific Commodity Movements - Crude oil, methanol, and short fibers had the highest closing price increases at 8.82%, 5.86%, and 5.31% respectively [1] - Precious metals like gold, pulp, and silver saw notable declines of 1.99%, 1.50%, and 1.44% respectively [1] Group 3: Market Outlook and Influencing Factors - The evolving situation in the Middle East, particularly the U.S. attack on Iranian nuclear facilities, is expected to influence short-term asset pricing and market direction [1] - There are expectations of Iranian responses that could impact energy prices, with a focus on monitoring implied volatility in energy markets and offshore dollar liquidity [1] Group 4: Precious Metals and Investment Trends - International gold prices are stabilizing at high levels, supported by dovish signals from Federal Reserve officials and rising expectations for interest rate cuts [1] - Geopolitical tensions and ongoing global central bank gold purchases continue to provide support for gold prices, while silver is affected by fluctuations in manufacturing data [1] Group 5: Non-Ferrous Metals and Market Dynamics - The non-ferrous metals sector is experiencing narrow fluctuations, with copper prices stabilizing due to tight overseas inventories and ongoing global investment in new energy [1] - Aluminum prices are supported near the cost line for electrolytic aluminum, with market attention on electricity costs and inventory depletion [1] Group 6: Black Metals and Policy Impacts - Steel futures are rebounding, driven by expectations of "stabilizing growth" policies and production restrictions in Tangshan [1] - Iron ore prices are influenced by seasonal rainfall in Brazil, leading to decreased port inventories and price stabilization alongside steel [1] Group 7: Energy Sector Developments - Crude oil futures have surged significantly due to geopolitical tensions in the Middle East and unexpected declines in U.S. oil inventories [1] - OPEC+ production cuts are being effectively implemented, with positive expectations for summer oil demand driving prices higher [1] Group 8: Chemical and Agricultural Products - The chemical sector is generally strong, buoyed by rising energy prices, with methanol, PTA, and fuel oil seeing price increases [1] - Agricultural products show a mixed performance, with oilseeds and oils experiencing strength due to domestic production cuts and policy support, while corn faces pressure from import competition [1]

Market Overview - The commodity market saw an overall increase of 2.29% last week, with significant gains in the energy sector at 4.11% [1] - Agricultural products and black metals rose by 2.10% and 0.91% respectively, while precious metals and non-ferrous metals experienced declines of 1.76% and 0.09% [1] Specific Commodity Performance - Crude oil, methanol, and short fibers had the highest closing price increases at 8.82%, 5.86%, and 5.31% respectively [1] - Precious metals like gold, pulp, and silver saw notable declines of 1.99%, 1.50%, and 1.44% respectively [1] Capital Flow and Market Sentiment - There was a decrease in capital flow, primarily influenced by outflows from precious metals [1] - The evolving situation in the Middle East, particularly the U.S. attack on Iranian nuclear facilities, is expected to impact short-term asset pricing and market dynamics [1] Energy Sector Insights - Oil prices surged due to tensions in the Middle East and a larger-than-expected drop in U.S. inventories, with OPEC+ effectively executing production cuts [1] - Positive expectations for summer oil demand have led to increases in fuel and asphalt prices [1] Chemical Sector Trends - The chemical sector generally strengthened due to rising energy prices, with methanol and other products experiencing a rebound [1] - However, the recovery of downstream demand remains uncertain, indicating a market driven by trading rather than sustained growth [1] Agricultural Sector Analysis - The oilseed and oil sector showed a strong upward trend, supported by domestic production cuts and policy expectations, despite weak soybean exports [1] - Corn prices faced pressure due to import substitution and declining profitability, while the hog market experienced fluctuations amid seasonal consumption declines [1]

Core Viewpoint - The main contradiction in futures pricing is the basis, which is currently significantly misaligned, indicating that futures are undervalued compared to spot prices [6][12][46]. Group 1: Basis Analysis - The basis is derived from the relationship between futures and spot prices, influenced by supply and demand dynamics reflected in inventory levels [7][8]. - Different commodities have their own basis, and the Wenhua Commodity Index should also have a corresponding basis rate [9][10]. - In June, the Wenhua Index's basis rate reached nearly 4%, suggesting a substantial misalignment where futures are undervalued relative to spot prices [12]. Group 2: Inventory and Profit Dynamics - The direction of inventory changes will determine whether commodities will continue to deplete or not, which is linked to profit margins and operating rates [15]. - The non-ferrous sector shows minor contradictions, while the black and chemical sectors exhibit significant basis discrepancies, with futures prices lagging behind spot prices [17][20][23]. Group 3: Future Basis Reversion - The reversion of the 2509 contract basis will depend on the ongoing contradictions in overseas demand and upstream-downstream profit distribution [26][28]. - If upstream prices stabilize, it could lead to an overall increase in industrial products, causing futures prices to rise faster than spot prices, thus narrowing the basis [42][44]. Group 4: Research and Strategy Development - Understanding the basis is crucial for researchers and traders to differentiate between spot and futures logic, enabling effective arbitrage strategies [49][50]. - The basis serves as a fundamental principle for futures, and its analysis can lead to better insights into market dynamics and trading strategies [52].

Report Summary 1) Report Industry Investment Rating No information provided regarding the industry investment rating. 2) Core Viewpoints - Keep an eye on the impact of the new US tariff policy on upstream prices and the advancement of pension - service - related programs [1] - Observe the trends of prices,开工率, sales volume, and credit spreads across different industries [2][3][4][5] 3) Summary by Directory A. Mid - view Event Overview - **Production Industry**: The US has raised the tariffs on imported steel, aluminum, and their derivatives from 25% to 50, and China will build 10 national data element comprehensive experimental zones [1] - **Service Industry**: The ISO has released an international standard on the inclusive digital economy for an aging society led by China [1] B. Industry Overview - **Upstream**: The price of soda ash in the chemical industry has dropped significantly, and the price of glass in the black industry has continued to decline [2] - **Mid - stream**: The PX operating rate in the chemical industry and the asphalt operating rate in the infrastructure industry have both increased [3] - **Downstream**: The sales of commercial housing in the real - estate industry have seasonally declined to a near - three - year low, and the number of domestic flights in the service industry has cyclically decreased [4] - **Market Pricing**: The credit spreads across all industries are fluctuating [5] C. Data Graphs - There are 24 graphs showing various indicators such as coal consumption, inventory, operating rates of different industries, traffic congestion indices, movie box - office, and flight execution [6] D. Industry Credit Spread Tracking - Credit spreads of different industries have different trends, with some increasing and some decreasing compared to previous periods [45] E. Key Industry Price Index Tracking - Prices of various products in key industries have different changes, including increases and decreases in prices of agricultural products, metals, energy, and chemical products [46]

Core Insights - The May 2023 China Commodity Price Index (CCPI) stands at 110.3 points, reflecting a month-on-month increase of 0.3% but a year-on-year decrease of 7.2% [1][3] - The index indicates a stabilization trend in commodity prices, with specific sectors showing varied performance, such as a slight increase in non-ferrous metal prices and a rebound in chemical prices [1][6] Price Index Summary - The non-ferrous price index rose to 127.7 points, up 0.9% month-on-month but down 5.2% year-on-year [3][4] - The agricultural product price index increased to 98.2 points, with a month-on-month rise of 0.5% and a year-on-year increase of 2% [3][4] - The chemical price index rebounded to 102.8 points, up 0.5% month-on-month but down 13.7% year-on-year [3][4] - The black metal price index fell to 78.7 points, down 0.8% month-on-month and down 11.4% year-on-year [3][4] - The energy price index decreased to 96.3 points, down 2.1% month-on-month and down 14.9% year-on-year [3][4] - The mineral price index dropped to 75.6 points, down 2.2% month-on-month and down 8.3% year-on-year [3][4] Commodity Price Movements - Among 50 monitored commodities, 32 (64%) saw price declines while 17 (34%) experienced price increases [4][6] - The top three commodities with price increases were PTA (up 9.5%), ethylene glycol (up 4.6%), and corn (up 4.3%) [4][6] - The largest price declines were observed in industrial silicon (down 10.2%), lithium carbonate (down 10%), and soybean meal (down 9.9%) [4][6] Market Analysis - Analysts attribute the rise in non-ferrous prices to improved demand expectations due to easing US-China tariff policies [5][6] - The agricultural price index's increase is linked to stable downstream consumer demand, with corn prices rising due to increased market demand and short-term supply constraints [6][7] - The overall market sentiment remains cautious due to persistent external uncertainties and insufficient effective demand in certain sectors [1][7]

Group 1 - The core viewpoint is that there is a mixed performance in the prices of major commodities in China, with some sectors showing recovery while others continue to decline [1][2][3] - In May, the China Commodity Price Index was reported at 110.3 points, reflecting a month-on-month increase of 0.3%, indicating a slight recovery in the market [3] - Among 50 monitored commodities, 17 showed a month-on-month price increase, with the non-ferrous price index at 127.7 points, up 0.9%, and the chemical price index rebounding by 0.5% [1] Group 2 - Agricultural product prices have risen for five consecutive months, demonstrating resilience in the agricultural sector and its role in stabilizing supply and prices [1] - Conversely, black, mineral, and energy price indices continue to decline, highlighting persistent issues of insufficient effective demand in certain industries [1] - Experts suggest that to solidify economic recovery, the government should increase public investment in infrastructure and services to boost market demand and enterprise orders [2]