Report Industry Investment Rating - The report gives a "neutral" rating to the black building materials industry, with a mid - term outlook of "oscillation" [5] Core Viewpoints - Affected by tariff expectations, the prices of most black building materials varieties fluctuated weakly during the day. The panic in the market was relatively limited due to the uncertainty of tariff increases and the weaker intensity compared to April. The prices continued to fluctuate weakly at night. In mid - October, the terminal demand of the industry remained poor, and the reduction of hot metal production limited the support for prices. In the fourth quarter, the influence of macro and policy factors increased, and attention should be paid to the possibility of positive signals from the macro and policy levels [1] - The current fundamental situation can hardly provide clear upward support for the prices of the sector's varieties. The tariff issue drags down the market sentiment and slightly affects the price performance of the sector. However, there are still expectations for overseas interest rate cuts and positive signals from domestic important meetings [5] Summary by Related Catalogs 1. Overall Industry Analysis - **Iron Element**: Iron ore demand is supported at a high level, supply is expected to be stable, and the price is expected to oscillate in the short term. Scrap steel has insufficient fundamental drivers and is expected to follow the price of finished products [2] - **Carbon Element**: Coke has rigid demand support from hot metal, and its price is expected to remain stable. Coking coal's fundamental contradictions are not prominent, and its price is expected to oscillate [2] - **Alloys**: Manganese silicon and ferrosilicon prices are supported in the short term but have downward pressure after the peak season [2] - **Others**: Glass may have a rebound space if post - holiday production and sales are good; otherwise, the price may be under pressure. Soda ash is in a supply - surplus pattern and is expected to oscillate widely [2][5] 2. Individual Variety Analysis - **Steel**: The inventory is at a moderately high level, the fundamentals are weak, and the overseas risks are increasing. The short - term price is under pressure, but the downward space is limited [7] - **Iron Ore**: The supply is stable, the demand is supported at a high level, and the price is expected to oscillate in the short term due to limited upside space [7][8] - **Scrap Steel**: The fundamental drivers are insufficient, and the price is expected to follow the finished products in the short term [9] - **Coke**: The fundamentals are healthy in the short term, and the price is expected to remain stable [10] - **Coking Coal**: The fundamental contradictions are not prominent, and the price is expected to oscillate [11] - **Glass**: If the post - holiday production and sales are good, there is a rebound space; otherwise, the price may decline. In the long term, it needs market - oriented capacity reduction [11][12] - **Soda Ash**: The supply - surplus pattern remains unchanged, and the price is expected to oscillate widely and decline in the long term [14] - **Manganese Silicon**: There is short - term support, but the price may decline after the peak season [15] - **Ferrosilicon**: There is short - term support, but the price may decline after the peak season [16] 3. Other Data - **Commodity Index**: On October 13, 2025, the comprehensive index of commodities, the commodity 20 index, and the industrial products index changed by +0.01%, +0.17%, and - 0.64% respectively [100] - **Steel Industry Chain Index**: On October 13, 2025, the steel industry chain index had a daily decline of - 0.33%, a 5 - day increase of +0.07%, a 1 - month decline of - 0.83%, and a decline of - 5.54% since the beginning of the year [102]

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core Viewpoints - The overall sentiment in the commodity market was weak, and the prices of finished steel products trended downwards. Although the direct impact of tariffs on steel is small, steel prices may decline in the context of a weakening commodity market. The current weak reality pattern is difficult to reverse in the short term, and attention should be paid to the policy strength during the Fourth Plenary Session [2]. - For the black sector, the research team is not pessimistic. Instead of short - selling, it believes that finding callback positions to do long may be more cost - effective. The key time point may be around the "Fourth Plenary Session" in mid - October [9]. 3. Summary by Commodity Steel Products (including rebar and hot - rolled coil) - **Rebar**: The closing price of the rebar main contract was 3083 yuan/ton, down 20 yuan/ton (-0.64%) from the previous trading day. The registered warehouse receipts decreased by 10910 tons, and the open interest increased by 26595 lots. The terminal demand dropped to a new low, inventory continued to accumulate, and the inventory - to - sales ratio increased significantly [1]. - **Hot - rolled coil**: The closing price of the hot - rolled coil main contract was 3261 yuan/ton, down 24 yuan/ton (-0.73%) from the previous trading day. The registered warehouse receipts increased by 2058 tons, and the open interest increased by 24873 lots. The production decreased slightly, but the apparent demand decreased more significantly, and the inventory increase was prominent [1]. Iron Ore - **Market Information**: The main contract (I2601) closed at 804.50 yuan/ton, up 1.19% (+9.50). The open interest increased by 9148 lots to 48.53 million lots. The spot price of PB powder at Qingdao Port was 796 yuan/wet ton, with a basis of 42.15 yuan/ton and a basis ratio of 4.98% [4]. - **Strategy Viewpoint**: Overseas iron ore shipments decreased seasonally. The daily average pig iron output was 241.54 million tons, down 0.27 million tons. The profitability of steel mills continued to decline. If the finished steel situation weakens after the holiday, the iron ore price may adjust accordingly [5]. Manganese Silicon and Ferrosilicon - **Manganese Silicon**: The main contract (SM601) closed down 0.24% at 5746 yuan/ton. The spot price in Tianjin was 5680 yuan/ton, with a premium of 124 yuan/ton over the futures. Its fundamentals are not ideal, and it is likely to follow the black sector [8][10]. - **Ferrosilicon**: The main contract (SF511) closed down 0.55% at 5406 yuan/ton. The spot price in Tianjin was 5650 yuan/ton, with a premium of 244 yuan/ton over the futures. Its supply - demand fundamentals have no obvious contradictions, and it is also likely to follow the black sector [8][10]. Industrial Silicon and Polysilicon - **Industrial Silicon**: The main contract (SI2511) closed at 8805 yuan/ton, up 1.38% (+120). The open interest increased by 13950 lots to 429365 lots. The supply - demand situation has no immediate concerns, and the far - month contract valuation is expected to rise [12][14]. - **Polysilicon**: The main contract (PS2511) closed at 48740 yuan/ton, down 0.46% (-225). The open interest decreased by 107 lots to 246615 lots. The market may enter a fundamental correction stage, and the price is under pressure in the short term [15][16]. Glass and Soda Ash - **Glass**: The main contract closed at 1179 yuan/ton, down 2.32% (-28). The inventory of float glass sample enterprises increased by 346.9 million cases (+5.84%). The short - term price is expected to continue the stable and narrow - range oscillation pattern [18][19]. - **Soda Ash**: The main contract closed at 1247 yuan/ton, up 0.56% (+7). The inventory of soda ash sample enterprises increased by 5.99 million tons (+5.84%). The short - term market is expected to continue the stable and weak trend [20][21].

Group 1: Glass Fiber Industry - The leading companies in the glass fiber sector, such as Chongqing International and Linzhou Guangyuan, have raised prices for G75 electronic yarn by 150-300 CNY/ton and for 7628 electronic cloth by 0.2 CNY/meter, indicating a positive price trend due to supply-demand dynamics [4] - The inventory in the glass fiber industry decreased to 860,000 tons by the end of September, reflecting a 5% month-on-month decline, suggesting a tightening supply situation [4] - The overall supply-demand balance for coarse yarn is expected to improve in Q4 2025, as new production capacity is limited, primarily coming online in the first half of 2025 [4] Group 2: Cement Industry - Post-National Day, the cement market has seen a decline in demand due to factors such as funding shortages and adverse weather conditions, with average shipment rates for major regions falling below 45% [5] - In East China, cement prices have decreased, with prices in Nanjing dropping by 20 CNY/ton, and the current price for P.O42.5 cement in Nanjing is between 200-210 CNY/ton [5] - Despite the current weak demand, companies are still inclined to raise prices to improve profitability, although the implementation of such price increases remains to be monitored [5] Group 3: Glass Industry - As of October 9, the total inventory of glass in monitored provinces increased by 6.96 million weight boxes, a rise of 13.71% compared to September 30, indicating a significant accumulation of stock [6][7] - The production volume was recorded at 16.88 million weight boxes, with a consumption volume of 9.92 million weight boxes, resulting in a production-sales rate of 58.78% [7] - The market has experienced a slowdown in trading activity, with many companies showing a cautious approach to pricing despite plans for potential increases [7]

Investment Rating - Non-metallic building materials: Buy (Maintain) [5] - Construction and engineering: Overweight (Maintain) [5] Core Views - The report indicates that the electronic yarn and fabric prices have increased, with expectations for improved supply and demand in the fiberglass sector in Q4 [1] - The cement market is experiencing weak demand post-National Day, with prices in East China declining due to insufficient demand support [2] - The glass industry is facing low production and sales rates, with inventory levels rising significantly compared to pre-holiday levels [3] - Investment suggestions include companies in new materials and infrastructure sectors, highlighting key players such as China Jushi, Guoen Co., Puyang Huicheng, and China State Construction [3] Summary by Sections Fiberglass - Electronic yarn prices have increased by 150-300 RMB/ton, and electronic fabric prices have risen by 0.2 RMB/meter, with expectations for improved supply-demand dynamics in Q4 [1] - The overall inventory in the fiberglass industry decreased to 860,000 tons, a 5% decline month-on-month [1] Cement - Post-holiday, cement demand has weakened, with average shipment rates for key regions falling below 45% [2] - Prices in East China have decreased by 20 RMB/ton, with specific regions reverting to pre-increase levels [2] Glass - As of October 9, total inventory reached 57.74 million weight boxes, an increase of 6.96 million weight boxes (13.71%) from September 30 [3] - The production and sales rate stands at 58.78%, indicating a slowdown in market activity [3] Investment Recommendations - Suggested companies include: - China Jushi (fiberglass leader entering specialty electronic fabric market) - Guoen Co. (leader in modified plastics, strategic layout in PEEK and robotics) - Puyang Huicheng (active magnesium oxide business) - Keda Manufacturing (expansion in African building materials and lithium carbonate business) - Hongrun Construction (robotics business layout) - Jiemai Technology (release of release film business, entering PCB carrier copper foil) [3]

Report Date - The report is dated October 13, 2025 [1] Industry Investment Ratings - No industry investment ratings are provided in the report. Core Views Steel - The current overseas macro - environment is under pressure. Whether the Sino - US trade negotiation can ease will be the core factor affecting asset prices. The overall situation is bearish, and asset prices may face pressure. With the weakening of steel fundamentals and the weakening support of iron ore, steel prices are more likely to decline. Short - term macro - level changes will have a higher impact than fundamental changes, and market volatility may increase [3] Iron Ore - In the short term, the fundamentals of iron ore are under marginal pressure. Shipments are high, inventory is accumulating seasonally, downstream hot metal has support, but steel demand is weak, inventory is accumulating, and profits are declining. The price is expected to rise first and then fall, still oscillating within a range [22] Coal and Coke - In the short term, the supply - demand contradiction of downstream finished products has deteriorated, the profitability of steel mills is under pressure, and the second round of coke price increase is difficult. In the medium - to - long term, under the policy constraints of "anti - involution" and "over - production inspection", the supply elasticity of coking coal in the fourth quarter is limited. The winter storage scale this year is expected to be better than last year, which will support coal and coke prices. However, the rebound height and sustainability of coal and coke prices depend on whether the supply - demand balance sheet of the downstream steel can achieve a "soft landing" [34] Ferroalloys - There is a contradiction between high supply and weak demand in ferroalloys. The production of ferrosilicon remains high, while the production of silicomanganese has declined for many weeks. The cost support is challenged due to the continuous decline of coking coal prices [53] Soda Ash - Market sentiment and focus will fluctuate, increasing the volatility of soda ash. The second - phase of Yuanxing has been ignited and is in the commissioning stage, and the long - term supply pressure of soda ash persists. The inventory of upstream alkali plants is starting to accumulate. The overall high inventory of the upper - and middle - reaches restricts the price of soda ash, but there is limited downward space due to cost support [64] Glass - The implementation of the coal - to - gas project in Shahe may be postponed to November. Glass production and sales are average, and the upstream inventory accumulation exceeds expectations. Some glass production lines still have the intention to ignite. The high inventory of the upper - and middle - reaches and weak real - world demand limit the price increase [89] Summary by Directory Steel Futures Prices - On October 13, 2025, the closing prices of rebar 01, 05, and 10 contracts were 3083, 3139, and 2986 yuan/ton respectively; the closing prices of hot - rolled coil 01, 05, and 10 contracts were 3261, 3274, and 3437 yuan/ton respectively [4] Spot Prices - On October 13, 2025, the aggregated rebar price in China was 3237 yuan/ton, and the aggregated hot - rolled coil price in Shanghai was 3320 yuan/ton [8] Basis and Spreads - On October 13, 2025, the 01 rebar basis in Shanghai was 137 yuan/ton, and the 01 hot - rolled coil basis in Shanghai was 59 yuan/ton. The 01 roll - rebar spread was 182 yuan/ton [8][14] Iron Ore Futures Prices - On October 13, 2025, the closing prices of 01, 05, and 09 iron ore contracts were 804.5, 781, and 759 yuan/ton respectively [23] Fundamental Data - As of October 10, 2025, the daily average hot metal output was 241.54 tons, the 45 - port inventory was 14024.5 tons, and the global iron ore shipment volume was 3207.5 tons [28] Coal and Coke Futures Prices and Basis - On October 13, 2025, the coking coal warehouse receipt cost (Tangshan Mongolian 5) was 1200 yuan/ton, and the main coking coal basis (Tangshan Mongolian 5) was 38.5 yuan/ton. The coke warehouse receipt cost (Rizhao Port wet - quenched) was 1583 yuan/ton, and the main coke basis (Rizhao Port wet - quenched) was - 83.1 yuan/ton [39] Spot Prices - On October 13, 2025, the ex - factory price of Anze low - sulfur main coking coal was 1530 yuan/ton, and the ex - factory price of Jinzhong quasi - first - grade wet coke was 1330 yuan/ton [40] Ferroalloys Ferrosilicon - On October 13, 2025, the ferrosilicon basis in Ningxia was 94 yuan/ton, and the ferrosilicon spot price in Ningxia was 5230 yuan/ton [54] Silicomanganese - On October 13, 2025, the silicomanganese basis in Inner Mongolia was 270 yuan/ton, and the silicomanganese spot price in Ningxia was 5600 yuan/ton [56] Soda Ash Futures Prices and Spreads - On October 13, 2025, the closing prices of soda ash 05, 09, and 01 contracts were 1336, 1406, and 1247 yuan/ton respectively. The 5 - 9 month spread was - 70 yuan/ton [65] Spot Prices - On October 13, 2025, the market price of heavy soda ash in North China was 1300 yuan/ton [68] Glass Futures Prices and Spreads - On October 13, 2025, the closing prices of glass 05, 09, and 01 contracts were 1313, 1392, and 1179 yuan/ton respectively. The 5 - 9 month spread was - 79 yuan/ton [89] Production and Sales - On October 10, 2025, the production - sales ratio of glass in Shahe was 61%, in Hubei was 82%, in East China was 82%, and in South China was 100% [90]

Core Insights - The report maintains a positive outlook on the building materials sector, highlighting a divergence in performance among companies, with demand being a central theme [2][4] - The report emphasizes that the construction materials industry is experiencing a mixed performance, with some companies benefiting from improved competitive dynamics while others face challenges due to demand and pricing pressures [7][10] Group 1: Consumer Building Materials - The consumer building materials segment shows a divergence in performance, with companies like Sanhe Tree and Oriental Yuhong expected to achieve significant growth due to improved competition and reduced pricing pressures [10][11] - The revenue for Q3 is anticipated to remain flat or decline for most building materials companies, but some may see slight year-on-year increases due to favorable competitive conditions [10][11] - Cost factors such as stable or declining prices for key materials like asphalt and PVC positively impact margins for waterproofing and coating companies [10][11] Group 2: Cement Industry - The cement industry faces weak demand from both real estate and infrastructure sectors, with production volumes declining by 5.6% and 6.2% year-on-year in July and August respectively [12][13] - The average price of cement in Q3 2025 was 343.86 RMB/ton, reflecting a decrease of 8.74% quarter-on-quarter and 10.55% year-on-year, indicating significant pricing pressure [12][13] - The report notes that the industry is currently at a low profitability level due to high inventory and rising production costs driven by coal prices [13] Group 3: Glass Industry - The glass industry is experiencing downward pressure on prices and profitability due to declining demand from the real estate sector, with the average price in Q3 2025 at 68.25 RMB/weight box, down 4.42% quarter-on-quarter [19] - High inventory levels persist in the glass sector, with 5,329 million weight boxes reported by the end of September, exacerbating the pricing challenges [19][20] - The report indicates that while raw material costs have decreased, the overall impact on profitability remains negative due to significant price declines [19] Group 4: Glass Fiber Industry - The glass fiber industry is characterized by structural demand differentiation, with high-end products performing better than low-end offerings, leading to a mixed profitability landscape [21] - The average price for non-alkali glass fiber yarn in Q3 2025 was 4,270 RMB/ton, reflecting a year-on-year decline of 44 RMB/ton, indicating pricing challenges [21] - The report highlights that the industry is facing high inventory levels, with 860,000 tons reported by the end of September, contributing to ongoing profitability pressures [21] Group 5: Company Performance Forecast - The report provides a forecast for various companies in the building materials sector, with Oriental Yuhong expected to achieve a net profit of 374-442 million RMB in Q3 2025, reflecting a year-on-year growth of 12%-32% [26] - Sanhe Tree is projected to see a significant increase in net profit, with estimates ranging from 329-366 million RMB, indicating a growth of 64%-83% year-on-year [26] - Other companies like Huaxin Cement and Conch Cement are also highlighted for their potential profitability improvements, with net profit forecasts indicating positive growth trends [26]

Industrial Sector - Daily average pig iron production and cement clinker capacity utilization rate have shown a marginal decline due to the holiday disruptions[2] - The apparent demand for steel has decreased, while the operating rate for polyester in textiles has increased[2] - The operating rates for automotive tires have decreased, indicating seasonal fluctuations[2] Real Estate - New home sales in 30 major cities have decreased by 28.7% year-on-year as of October 10, influenced by the holiday and base effects[2] - The second-hand housing listing price index has dropped by 0.83% month-on-month as of September 29[2] Domestic Demand - Retail sales of automobiles increased by 6% year-on-year in September, while major home appliance retail sales fell by 6.7%[2] - Domestic flight operations increased by 3% year-on-year, with the Baidu migration index rising by 31.6%[2] - The total number of people moving across regions during the holiday reached 2.432 billion, a historical high, with a daily average of 304 million, up 6.2% year-on-year[2] External Demand - Port cargo throughput increased by 7.8% year-on-year, while container throughput rose by 6.9%[2] - Export container freight rates have shown a decline of 6.7% week-on-week, although rates from Shanghai and Ningbo have increased since the end of September[2] Price Trends - The South China black raw materials index rose by 1.8%, while the futures price of rebar increased by 1%[2] - The futures price of coking coal rose by 3.1%, while the spot price in Shanxi fell by 1.1%[2]

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [1] Core Views - The report highlights that the recent escalation in China-US trade tensions may shift market risk preferences, leading to increased attention on defensive sectors within the building materials industry that have strong domestic demand and high dividends. Segments such as cement, glass, and consumer building materials, which have lagged in performance this year, are expected to benefit if market sentiment shifts towards "high cutting low" [3][4] - Cement demand is gradually recovering but remains limited, with production in August 2025 at 148 million tons, down 6.2% year-on-year. The implementation of policies to limit overproduction is expected to enhance capacity utilization in the medium term [3][8] - The glass industry is experiencing a downward trend in demand due to real estate impacts, but recent policy catalysts have led to price increases and inventory replenishment in the midstream sector. The report anticipates that environmental regulations will not lead to a drastic reduction in capacity but will increase costs and accelerate maintenance [4][13] - The fiberglass sector is benefiting from demand driven by the AI industry, with expectations for significant growth in low-dielectric products. The report is optimistic about the continued upward trend in both volume and price [4] - The consumer building materials sector has reached a profitability bottom, with no further downward price pressure expected. The report notes a strong demand for price increases and profitability improvements, particularly among leading companies [4] Summary by Sections Cement - The cement market is entering its peak season, with overall demand showing slow recovery. The construction sector is affected by weather and demand release timing, leading to a weak recovery in housing construction [8] - The report emphasizes the importance of monitoring companies like Conch Cement and Huaxin Cement [3] Glass - The glass industry is facing a continuous decline in demand influenced by real estate, but recent policy changes have led to price increases and midstream inventory replenishment [4][13] - Companies to watch include Qibin Group [4] Fiberglass - The fiberglass sector is experiencing a boom driven by AI-related demand, with expectations for explosive growth in low-dielectric products [4] Consumer Building Materials - The sector's profitability has bottomed out, with strong calls for price increases and profitability improvements. Companies like Dongfang Yuhong and Sankeshu are highlighted for potential recovery [4]

Investment Rating - The report maintains an "Overweight" rating for the construction materials industry [1] Core Views - The construction materials sector is expected to see a gradual improvement in profitability, particularly in the fiberglass segment, as supply pressures ease and demand remains resilient [6][15] - The report highlights the importance of domestic demand policies and the potential for recovery in the housing market, which could positively impact the demand for home improvement materials [17] Summary by Sections 1. Bulk Construction Materials - Fiberglass profitability is anticipated to improve in the medium term as supply shocks diminish and industry price stabilization efforts gain traction [15] - The cement market is experiencing a temporary decline in demand due to seasonal factors, but a rebound is expected as supply-side discipline strengthens [20][21] - The average cement price in China is currently 349.2 RMB/ton, reflecting a decrease of 1.3 RMB/ton from the previous week and a significant drop of 53.2 RMB/ton compared to the same period last year [21][22] 2. Industry Dynamics - The report notes that the construction materials sector has shown resilience despite external uncertainties such as trade tensions, with government policies aimed at boosting domestic consumption expected to support recovery [17] - The report emphasizes the need for industry self-discipline to manage supply and maintain profitability, particularly in the cement sector [14][20] 3. Market Performance - The construction materials sector outperformed the broader market indices, with a weekly gain of 2.66% compared to declines in the CSI 300 and Wind All A indices [5] - The report suggests that the valuation of leading companies in the sector is at historical lows, indicating potential for recovery as industry policies take effect [14][17] 4. Recommendations - The report recommends focusing on leading companies in the sector, such as China National Building Material and Conch Cement, which are expected to benefit from improved market conditions and policy support [14][18] - It also highlights the potential for growth in companies involved in advanced materials and technology applications, particularly in the context of domestic demand recovery [6][17]

Core Insights - The report highlights the current trends in the non-metallic building materials sector, including price changes, inventory levels, and production rates across various materials [1][4][5]. Group 1: Price Trends and Market Performance - The national average price for high-standard cement is 349 RMB/ton, down 53 RMB/ton year-on-year and down 2 RMB/ton month-on-month, with an average shipment rate of 44.5%, a decrease of 1.9 percentage points from the previous month [1][4]. - The average price of float glass is 1289.81 RMB/ton, which represents an increase of 65.07 RMB/ton or 5.31% month-on-month [1][4]. - The average price for 2.0mm coated panels remains stable at around 13 RMB/square meter [1][4]. Group 2: Inventory and Production Metrics - The inventory days for key monitored provinces in the glass production sector are approximately 24.8 days, a decrease of 1.38 days from the previous week [1][4]. - The concrete mixing station's capacity utilization rate is reported at 7.48%, down 0.19 percentage points month-on-month [4]. - The average price for domestic 2400tex alkali-free winding direct yarn is 3524.75 RMB/ton, remaining stable, while the mainstream price for electronic cloth is between 4.3-4.5 RMB/m, reflecting a 6% increase [4]. Group 3: Company Developments and Recommendations - China National Materials Technology announced plans to raise no more than 4.48 billion RMB for projects related to low dielectric fiber cloth production and to repay government funds [6]. - Huaxin Cement plans to grant 257,800 restricted stocks to 11 incentive targets and intends to repurchase shares worth between 32.25 million and 64.5 million RMB, with a maximum repurchase price of 25 RMB/share [6]. - The report continues to recommend investment in African building materials, fiberglass, and electrolytic aluminum sectors, highlighting companies like Keda Manufacturing and Huaxin Cement as key players in international competition [2].