Core Viewpoint - The recent fluctuations in the national carbon emission trading market prices are normal and influenced by multiple factors such as supply-demand relationships, market expectations, trading behaviors, and market psychology [1][4]. Group 1: Market Expansion and Impact - The State Council approved the inclusion of the steel, cement, and aluminum smelting industries into the carbon emission trading market, marking a significant step in promoting green and low-carbon transformation in these sectors [3]. - The carbon market's expansion is expected to enhance emission reduction responsibilities for enterprises, transitioning from intensity control to total volume control during the 14th Five-Year Plan period, with a focus on stable carbon emission industries by 2027 [3][5]. Group 2: Low-Carbon Investment and Innovation - The carbon market has driven low-carbon investments and accelerated the innovation and promotion of green low-carbon technologies, with enterprises integrating carbon asset management into their daily operations [4]. - The carbon trading has reportedly reduced the overall emission reduction costs in the power generation sector by approximately 35 billion RMB during the first two compliance cycles, indicating a positive impact on cost-effectiveness in the newly included industries [4]. Group 3: Future Directions - The Ministry of Ecology and Environment plans to further expand the coverage of the carbon market, prioritize total volume control in stable carbon emission industries, and enhance the pricing function of the carbon market to reflect true emission reduction costs [5].

Core Viewpoint - The recent fluctuations in the national carbon emissions trading market are normal and influenced by multiple factors, including supply and demand, market expectations, and trading behavior [3] Group 1: Carbon Market Developments - The Ministry of Ecology and Environment plans to expand the coverage of the carbon market, prioritizing total quota control in stable carbon emission industries by 2027 [4] - The inclusion of the steel, cement, and aluminum industries in the carbon market aims to enhance emission reduction responsibilities and support national greenhouse gas emission control goals [4][5] - The carbon market has already reduced overall emission reduction costs by approximately 35 billion RMB during the first two compliance periods, with further reductions expected as more industries participate [5][6] Group 2: CCER Market Progress - As of October 28, the voluntary greenhouse gas reduction trading market has registered 31 projects and achieved a cumulative transaction volume of 3.25 million tons of CCER, with a transaction value of 27 million RMB [7] - The CCER market is expanding its support to various projects, including afforestation carbon sinks and offshore wind power, with ongoing efforts to develop new methodologies [8] - Future efforts will focus on expanding market support areas, improving data quality supervision, and enhancing international cooperation to increase the carbon market's global influence [8]

Core Points - The national carbon emissions trading market will gradually shift from intensity control to total control during the "14th Five-Year Plan" period, with a goal to cover major industrial emission sectors by 2027 [1][2] - The Ministry of Ecology and Environment aims to expand the coverage of the national carbon emissions trading market and implement total quota control and paid allocation [1][2] - The inclusion of the steel, cement, and aluminum industries in the carbon emissions trading market is expected to enhance corporate responsibility for emissions reduction [2][4] Summary by Sections Carbon Market Development - The central government has issued its first document on carbon market construction, demonstrating a strong commitment to addressing climate change [1] - The Ministry of Ecology and Environment will accelerate the establishment of the national carbon market and expand its coverage to major emission industries by 2027 [1][2] Voluntary Emission Reduction Market - The development of a voluntary emission reduction trading market is being expedited, with a focus on creating a comprehensive methodological system to support social voluntary reductions [2][5] - As of October 28, the voluntary emission reduction trading market has registered 31 projects and achieved a total transaction volume of 3.25 million tons, with a transaction value of 270 million yuan [5] Industry Impact - Since the launch of the national carbon market, the power generation sector has established internal carbon management systems, leading to reduced emissions costs by approximately 35 billion yuan during the first two compliance periods [4] - The diversification of industry participants following the inclusion of steel, cement, and aluminum is expected to facilitate cross-industry resource allocation and lower overall emissions reduction costs [4]

Core Viewpoint - Rio Tinto's Tomago Aluminium smelter is facing significant pressure from high electricity prices, leading to discussions about the potential cessation of operations after the current power supply contract expires in December 2028 [2][3] Group 1: Operational Challenges - Tomago Aluminium has been exploring viable energy solutions since 2022 but has not found a sustainable path for operations beyond 2028 [2] - Electricity costs currently account for over 40% of Tomago's operational expenses, and proposals received indicate that energy prices will significantly increase starting January 2029, affecting the economic viability of the smelter [2][3] - The consultation process with employees and union representatives will continue until November 21, allowing for feedback before any final decisions are made [3] Group 2: Company Background - Tomago Aluminium, established in 1983, is Australia's largest aluminium smelter, producing up to 590,000 tonnes of aluminium annually, which constitutes nearly 40% of Australia's total aluminium production [3] - The smelter is a joint venture, with Rio Tinto holding a 51.55% stake, Gove Aluminium Finance Ltd at 36.05%, and Norwegian company Hydro at 12.40% [4] - The facility is located in Tomago, approximately 13 kilometers west of Newcastle, New South Wales [5] Group 3: Current Power Supply Contract - Tomago Aluminium's existing power supply contract with AGL is set to expire in December 2028 [6]

Core Viewpoint - The alumina market is facing multiple bearish factors, leading to a weak price trend, with a focus on smelting cost support and the willingness of the smelting industry to reduce operating capacity in the future [1] Group 1: Alumina Supply and Demand - In September, China's bauxite imports reached 15.88 million tons, a year-on-year increase of 38.14%, but a month-on-month decrease of approximately 2.41 million tons, indicating a seasonal decline [1] - Cumulatively, 157 million tons of bauxite were imported in the first nine months of the year, a year-on-year increase of 32%, with Guinea accounting for 75% of total imports [1] - As of October 17, domestic bauxite port inventory was 28.69 million tons, a week-on-week increase of 653,000 tons, indicating ample supply [1] Group 2: Alumina Production and Inventory - As of October 17, domestic alumina production capacity was 112.55 million tons, with an operating capacity of 96.8 million tons, a week-on-week decrease of 1.4 million tons [1] - The weekly alumina production was 1.861 million tons, significantly higher than the same period last year, while the electrolytic aluminum weekly production was 852,900 tons, maintaining a supply surplus [1][3] - Domestic alumina inventory reached 4.639 million tons as of October 17, with a week-on-week increase of 63,000 tons, indicating ongoing accumulation since late May [3] Group 3: Pricing and Profitability - The FOB price for Australian alumina was $323 per ton as of October 17, unchanged from the end of September but down $45 from the end of August, reflecting weaker overseas pricing [3] - The production cost of alumina was 2,854.3 yuan per ton as of October 3, with an average profit of 135.4 yuan per ton, indicating a contraction in smelting profits since early August [3][6] - The expectation is that as alumina prices continue to decline, smelting losses may occur, particularly in high-cost regions, potentially leading to voluntary production cuts [3][6] Group 4: Market Outlook - The alumina market is expected to remain under pressure due to ample supply, high operating capacity, and increasing registered warehouse receipts, which are significantly higher than the same period last year [8] - Short-term alumina prices are unlikely to recover, with a focus on smelting cost support and the potential for production cuts if smelting profits enter a loss zone [8]

Market Overview - The Hong Kong stock market saw a rebound with the Hang Seng Index rising by 0.72% to close at 25,967 points, the National Enterprises Index up 0.83% returning to 9,300 points, and the Hang Seng Technology Index increasing by 0.48% to 5,951 points [1] - Major technology stocks experienced gains, with Meituan leading at a 4.06% increase, Alibaba up 1.67%, Tencent and JD.com both up 1.5%, and Baidu rising by 1.22% [1][3] - Financial stocks also contributed to the market's rise, with Agricultural Bank of China increasing by approximately 2% to reach a new high [1] Technology Sector - Alibaba announced the pre-sale of its AI-powered smart glasses, Quark AI Glasses, priced at 4,699 RMB, set to start delivery in December [3] - The technology sector showed a mixed performance, with major players like Meituan, Alibaba, Tencent, and JD.com seeing positive movements, while Apple-related stocks remained sluggish [1][3] Energy Sector - The energy sector saw a broad increase, with notable gains in oil and gas stocks, particularly Yanchang Petroleum International rising over 6% [6] - The U.S. government imposed sanctions on Russian oil companies, which may impact global oil supply dynamics [5] Gambling Sector - The gambling sector showed strong performance, with Sands China rising over 4% and other companies like MGM China and Galaxy Entertainment also experiencing gains [8] - Sands China reported a 7.5% increase in net revenue for Q3 2025 compared to Q3 2024, with total gaming revenue in Macau expected to grow by 9% and 5% in the next two years [7] Aluminum Sector - The aluminum sector was active, with companies like China Hongqiao and Nanshan Aluminum International both rising over 4% [10] - Citic Securities noted supply constraints in the aluminum industry, particularly due to production cuts at Century Aluminum's Grundartangi smelter, which could lead to increased prices [9] Semiconductor Sector - The semiconductor sector faced declines, with stocks like Qorvo and North Sea Kangcheng dropping significantly [12] - Ansys Semiconductor China issued a statement opposing misinformation from its current management and reaffirmed compliance with Chinese regulations [11] Biopharmaceutical Sector - The biopharmaceutical sector underperformed, with stocks like Qianxin Biopharmaceutical dropping over 13% [14] - Analysts noted that the pharmaceutical index lagged behind the market due to tariff impacts and underwhelming external authorizations [13] Apple-Related Stocks - Apple-related stocks declined, with companies like FIH Mobile and Lens Technology experiencing significant drops [16] - Analyst Ming-Chi Kuo indicated that demand for iPhone Air is below expectations, leading to reduced shipments and production capacity [15] Investment Trends - Southbound funds recorded a net inflow of 5.345 billion HKD, indicating strong interest in Hong Kong stocks [19] - Goldman Sachs projected a fundamental shift in investment logic in the Chinese stock market, predicting a potential 30% increase in key indices by the end of 2027 [21]

Group 1: NDC Goals and Climate Commitments - The new NDC targets announced by China aim for a 7% to 10% reduction in net greenhouse gas emissions from peak levels by 2035, with non-fossil energy consumption exceeding 30% of total energy consumption [1][2] - The NDC goals represent a shift from "phase-based reduction" to "systematic transformation," indicating a comprehensive approach to climate governance [2][3] - The updated NDC includes a broader scope covering all greenhouse gases, a shift from relative intensity targets to absolute total emission targets, and an extended timeline that includes post-peak reduction phases [3] Group 2: Industry Implications and Actions - The transition to total emissions control means that more industries must actively engage in carbon reduction efforts, with a focus on systematic management across all economic sectors [5][6] - The national carbon market is set to expand, with plans to include major industrial sectors by 2027, increasing the number of monitored entities and the total carbon emissions under management [6] - Different industries will face varying costs for carbon reduction, with some sectors like steel and electricity having higher costs compared to others, necessitating a phased approach to implementation [7] Group 3: International Context and Challenges - The global progress on emission reductions is lagging, with significant gaps between national commitments and the efforts needed to meet climate goals, particularly in light of the U.S. withdrawal from the Paris Agreement [8][9] - China's NDC commitments are seen as crucial for setting a roadmap for carbon reduction in the next five years, especially given the challenges posed by the current international climate cooperation landscape [8][9]

Core Points - China's new round of Nationally Determined Contributions (NDCs) aims for a 7%-10% reduction in greenhouse gas emissions from peak levels by 2035, with a focus on achieving even better results [1][2] - Non-fossil energy consumption is targeted to exceed 30% of total energy consumption, with wind and solar power capacity expected to reach over 360 million kilowatts, six times the 2020 level [1][2] - The new NDCs include qualitative goals such as making new energy vehicles the mainstream of new vehicle sales and establishing a nationwide carbon trading market covering major high-emission industries [2][3] Summary by Categories Emission Reduction Goals - The NDCs represent a significant shift from intensity control to total emission control, marking the first time China has set absolute reduction targets for all greenhouse gases across the entire economy [2][3] - The new targets reflect China's commitment to addressing climate change and provide a clear direction for the country's green and low-carbon transformation [2][3] Energy and Renewable Resources - China aims to increase the share of non-fossil energy in primary energy consumption to over 30% and achieve a total installed capacity of wind and solar power that is six times that of 2020 [2][5] - The country has built the world's largest and fastest-growing renewable energy system, supplying over 80% of global photovoltaic components and 70% of wind power equipment [5] Carbon Trading and Market Development - China has established the largest carbon trading market globally, covering over 60% of national carbon emissions, with recent expansions to include industries such as steel, cement, and aluminum [5] - The carbon market's development is seen as a crucial step in enhancing the effectiveness of carbon emission management [5] International Cooperation and Climate Governance - The new NDCs are expected to boost international confidence in global climate governance and highlight China's leadership role in international climate action [4][7] - Achieving these goals will require a fair international environment, stable cooperation, and mutual trade relations, emphasizing the need for global collaboration in addressing climate change [7]

Group 1: Investment Rating of the Report - The report does not explicitly provide an overall industry investment rating. However, it offers mid - term outlooks for each metal variety, including "oscillating strongly", "oscillating", etc. [8][11] Group 2: Core Viewpoints of the Report - After the Fed restarts interest rate cuts, investors have a positive macro - outlook. There is a linkage between the stock and futures markets of non - ferrous metals, with copper leading the rise among base metals. In the short - to - medium term, supply disruptions and stock - futures linkage speculation lead to a pulse rise in some varieties, but there is a risk of price decline after a rapid increase. In the long term, potential domestic stimulus policies and supply disruptions in copper, aluminum, and tin will push up base metal prices [1]. - For different metal varieties, the supply - side contraction logic of copper continues to drive up prices; the fundamentals of alumina are weak with price pressure; aluminum prices are boosted by macro - sentiment; aluminum alloy prices are supported by cost; zinc prices rebound with non - ferrous metals despite inventory accumulation; lead prices also rebound with non - ferrous metals with a loosening supply - demand outlook; nickel prices fluctuate widely due to the repeated progress of RKAB quotas; stainless steel prices rise with the strengthening of nickel prices; tin prices oscillate at a high level due to continuous supply disruptions [2]. Group 3: Summary by Variety (According to the Catalog) Copper - **Viewpoint**: The supply - side contraction logic continues to ferment, and copper prices maintain a strong trend. The Grasberg mine in Indonesia has production disruptions, and there are also issues such as the US government shutdown, domestic production changes, and policy - induced production cuts in the recycled copper market. The supply is expected to decrease, while the demand has resilience, and copper prices are expected to oscillate strongly [8][10]. - **Information Analysis**: The production of the Grasberg mine in Indonesia is expected to be severely affected in 2026, with a 35% drop in annual output; the US government shutdown affects economic data release; in August, SMM China's electrolytic copper production decreased slightly month - on - month but increased year - on - year; the spot price of electrolytic copper had a certain premium; the copper inventory increased; the "770 - document" led to production cuts in the recycled copper market; the labor union of Los Pelambres copper mine rejected the contract, increasing the strike risk [8][9]. - **Main Logic**: Macroscopically, the US government shutdown affects data release. On the supply side, mine production disruptions, low processing fees, and policy - induced production cuts lead to a supply reduction expectation. On the demand side, the peak season is approaching, and downstream stocking demand may increase. If the inventory continues to decline, copper prices may remain strong [10]. Alumina - **Viewpoint**: The fundamentals are still weak, and the upward price movement is under pressure. It is expected to oscillate in the short term [11][13]. - **Information Analysis**: On October 9, the domestic and overseas spot prices of alumina changed, with a certain decline in domestic prices; the estimated supply in September exceeded demand by about 430,000 tons; the price of a tender by an electrolytic aluminum plant in Xinjiang decreased; the alumina warehouse receipts increased [11][12]. - **Main Logic**: The macro - sentiment in the non - ferrous sector amplifies price fluctuations. Fundamentally, although some smelters are close to the cost line, the operating capacity is still high, and the strong inventory accumulation trend continues. The price is under pressure, but the limited decline in ore prices in the fourth quarter restricts the downward space. Potential production cuts and Guinea - related disturbances may affect prices [12]. Aluminum - **Viewpoint**: Boosted by macro - sentiment, aluminum prices oscillate strongly. In the short term, they are expected to oscillate, and in the medium term, the price center may rise [13][14]. - **Information Analysis**: On October 9, the price of SMM AOO aluminum increased, and the inventory of aluminum ingots and aluminum rods increased; some aluminum production projects were completed or planned to be put into production [13]. - **Main Logic**: The short - term interest rate cut boosts macro - expectations. On the supply side, replacement capacities are being put into production, and the operating capacity is high. On the demand side, as the peak season approaches, the order outlook improves. The post - holiday demand and inventory trends need to be observed [14]. Aluminum Alloy - **Viewpoint**: Supported by cost, the price oscillates. In the short term, there are opportunities for cross - variety arbitrage, and in the medium term, it is expected to oscillate within a range [14][15]. - **Information Analysis**: On October 9, the price of ADC12 increased, and the price difference between ADC12 and AOO aluminum changed; the registered warehouse receipts increased; the EU may impose a 30% tax on scrap metal exports; the growth rate of the auto market in September slowed down [14][15]. - **Main Logic**: On the cost side, the supply of scrap aluminum is tight, and the cost reduction space is limited. On the supply side, the operating rate is increasing, and the implementation of policies needs to be observed. On the demand side, there is a marginal improvement, but the peak - season effect needs to be verified. The inventory is accumulating, and the price is expected to oscillate within a range [15]. Zinc - **Viewpoint**: Zinc prices rebound with non - ferrous metals despite inventory accumulation. In the short term, they may oscillate at a high level, and in the long term, there is a downward risk [16][17]. - **Information Analysis**: The spot price of zinc has a certain discount; the inventory of zinc ingots increased; a mine in Australia had a seismic event, delaying high - grade zinc ore mining [16]. - **Main Logic**: The non - ferrous sector rebounds with the rise of copper prices. The macro - environment is slightly negative. The short - term zinc ore supply is loose, and smelters have strong production willingness. The demand is in the off - peak to peak transition period, and the overall demand outlook is average. The fundamentals are in surplus, but the Fed's interest rate cut expectation and the "soft squeeze" of LME zinc support short - term prices [17]. Lead - **Viewpoint**: The supply - demand loosening expectation remains unchanged, and lead prices rebound with non - ferrous metals, showing an oscillating trend [17][20]. - **Information Analysis**: The price of waste electric vehicle batteries and the price difference between primary and recycled lead remained stable; the price of lead ingots was stable, and the spot premium decreased; the social inventory of lead ingots decreased, and the warehouse receipts increased; lead smelters had production cuts in September, and downstream enterprises stocked up before the holiday [17][19]. - **Main Logic**: On the spot side, the premium and price difference are stable; on the supply side, the profit of recycled lead smelters improves, and the production increases; on the demand side, the operating rate of lead - acid battery factories is high. After the battery factory's stocking is completed, the demand may decline, and the supply may loosen [19][20]. Nickel - **Viewpoint**: Due to the repeated progress of RKAB quotas, nickel prices fluctuate widely. In the short term, they oscillate widely, and in the long term, it is advisable to wait and see [20][24]. - **Information Analysis**: The LME nickel inventory increased, and the domestic inventory was partially exported; Antam and CATL signed cooperation agreements; the application process of the 2026 RKAB quota was delayed; a nickel - iron plant in Brazil increased its production capacity [20][22]. - **Main Logic**: Market sentiment dominates the market, and the industrial fundamentals are slightly weak. The mine end is relatively stable, but the intermediate product output recovers, and the nickel salt price weakens slightly. The inventory accumulates, and the price pressure is significant. Short - term trading is recommended [22]. Stainless Steel - **Viewpoint**: Stainless steel prices rise with the strengthening of nickel prices and are expected to oscillate within a range in the short term [25]. - **Information Analysis**: The futures warehouse receipts of stainless steel decreased; the spot price had a certain premium; the stainless steel production in September increased [25]. - **Main Logic**: The prices of nickel - iron and chrome - iron are stable. The production increase in September is driven by price and season. The supply - demand imbalance has been alleviated, and the future price trend depends on inventory and cost changes [25]. Tin - **Viewpoint**: Due to continuous supply disruptions, tin prices oscillate at a high level. The supply - side tightness provides strong support for prices, and they are expected to oscillate [26]. - **Information Analysis**: The inventory and trading volume of tin changed; the spot price increased; Indonesia took measures to regulate the tin market, affecting supply [26]. - **Main Logic**: During the National Day, there were continuous supply disruptions in the tin market, including Indonesia's crackdown on illegal mines and quota system adjustments. The supply in key areas such as the Wa State and Indonesia is restricted, and the supply - side tightness supports prices [26].

Core Viewpoint - The issuance of the "Opinions on Promoting Green and Low-Carbon Transition and Strengthening National Carbon Market Construction" marks a significant step towards the comprehensive deepening and acceleration of the national carbon market, providing direction for institutional innovation and operational optimization, which is crucial for achieving carbon neutrality goals and enhancing China's carbon governance system [1] Group 1: Carbon Market Structure - The national carbon market consists of a mandatory carbon trading market and a voluntary emission reduction market, which are interconnected through quota clearing and offset mechanisms, each focusing on different aspects while complementing each other [2] - The carbon pricing mechanism is central to the carbon trading market policy, with quota allocation being a key factor influencing carbon pricing [2] Group 2: Quota Allocation and Management - Current quota allocation primarily uses a free distribution method based on carbon emission intensity and actual production volume, avoiding negative impacts on economic growth [2] - As more emission entities are included in the carbon market, the focus will gradually shift from controlling carbon intensity to controlling total carbon emissions, transitioning from free allocation to a mixed approach of "free + paid" allocation [2] Group 3: Monitoring and Verification - A robust monitoring, reporting, and verification (MRV) system is essential for accurately determining historical carbon emissions and their intensity, which supports the effective functioning of the carbon market [3] - Enhancing data quality through comprehensive regulation and automated monitoring is crucial for achieving national emission reduction targets [3] Group 4: Low-Carbon Transition Strategies - Companies can achieve green and low-carbon transformation through energy-saving renovations and clean energy alternatives, fostering a virtuous cycle of emission reduction, revenue generation, and reinvestment in research and development [4] - The development of low-carbon industry clusters, such as clean energy and carbon consulting, can drive industrial structure upgrades and promote economic transition towards a green high-end model [4]