Summary of Key Points from the Conference Call Industry Overview - **Industry**: Lithium Market - **Company**: Morgan Stanley Research Core Insights and Arguments 1. **Lithium Supply/Demand Balance**: The lithium market is expected to move closer to balance due to better-than-expected demand from Electric Vehicles (EVs) and Energy Storage Systems (ESS), despite a larger surplus anticipated in 2026 unless supply discipline is maintained [5][44] 2. **Price Stabilization**: Lithium and spodumene prices have stabilized, with spodumene rebounding from a low of $610 per ton and lithium carbonate bouncing off $7,400 per ton, indicating a potential floor for prices [41] 3. **Supply Discipline**: Historical reluctance among lithium producers to cut production in response to falling prices has led to elevated inventories. Recent disruptions from CATL and potential shutdowns of lepidolite mines in Yichun may further impact supply [42][44] 4. **Demand Trends**: NEV sales in China are projected to rise by 22% YoY in 2025, with Battery Electric Vehicles (BEV) increasing by 8% and Plug-in Hybrid Electric Vehicles (PHEV) by 40%. However, some cities have paused vehicle trade-in programs due to funding issues [43][44] 5. **Future Risks**: Upside risks include more supply cuts and increased EV incentives in China, while downside risks involve smaller BEV pack sizes and potential rapid price rebounds that could incentivize other supply sources [44] Additional Important Information 1. **Interactive Model**: Morgan Stanley has developed an interactive model allowing investors to adjust variables such as auto sales, EV penetration, and battery types to assess impacts on the lithium market in real-time [1][2] 2. **Quarterly Updates**: The lithium supply/demand model will be updated quarterly to reflect the latest market conditions and forecasts [1] 3. **Market Dynamics**: The model includes various scenarios for committed, brownfield, and greenfield projects, which will significantly influence future supply and demand dynamics [19][21] 4. **Battery Technology Trends**: There is a growing interest in the proportion of NMC and LFP batteries, with LFP gaining traction due to cost improvements and range enhancements [26][28] 5. **Global EV Sales Forecast**: The model allows for adjustments in global auto sales forecasts, which are crucial for predicting lithium demand [34][35] This summary encapsulates the key points discussed in the conference call, focusing on the lithium market's current state, future outlook, and the tools provided by Morgan Stanley for investors to analyze market dynamics.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Basic Materials in China - **Key Trends**: Weakness in property indicators and slowing momentum in Fixed Asset Investment (FAI) observed in August 2025. Commodity prices for steel, coal, and lithium have rallied due to production cuts or halts [2][7][19]. Core Insights - **Property Market Weakness**: - New property starts decreased by 5.1% month-over-month (MoM) and 19.8% year-over-year (YoY) in August. Real estate investment hit a new low, with expectations of marginal improvement in September due to easing in tier-1 cities [2][24]. - J.P. Morgan's Property Analyst suggests that policymakers may need to consider stronger actions as data worsens, indicating potential for more policy support [2][24]. - **FAI Trends**: - FAI growth rate slowed to 0.5% in the first eight months of 2025, down from 1.6% in the previous seven months. Real estate investment worsened to -12.9% YoY [7][24]. - Manufacturing and infrastructure FAI also slowed, indicating continued downward pressure on domestic demand for industrial metals [7]. - **Commodity Price Movements**: - Copper prices have broken the US$10,000 mark, leading to upward earnings revisions for copper-related companies. The preference order for commodities is copper/gold > aluminum > steel > coal > lithium [2]. - Coal prices are expected to remain range-bound at approximately Rmb650/ton for the second half of 2025 [2]. - **Steel Production**: - Crude steel output in August was 77 million tons, down 0.7% MoM and 2.9% YoY. A production cut of 20-50 million tons is anticipated [8][12]. - 60% of steel mills are currently profit-making, with operating rates for blast furnaces remaining high at 84% [8]. - **Aluminum Production**: - Aluminum production was stable at 3.8 million tons, with exports decreasing slightly. Inventory levels are considered healthy despite an increase [19][20]. - **Coal Production**: - Raw coal output increased to 391 million tons in August, up 2% MoM but down 3.2% YoY. A production halt at a coal mine in Shanxi has led to a rise in coking coal futures [15][24]. - **New Energy Vehicle (NEV) Production**: - NEV production increased by 22.7% YoY in August, indicating a recovery in the auto sector. However, oversupply issues continue to pressure lithium prices [21]. Additional Important Insights - **Market Sentiment**: The spokesperson from the National Bureau of Statistics (NBS) indicated that "more efforts are needed to achieve market stabilization," suggesting that further policy support may be forthcoming [2]. - **Valuation Comparisons**: A detailed valuation comparison of global diversified mining companies was provided, highlighting various metrics such as PE ratios and market capitalization [27][29]. Conclusion The conference call highlighted significant challenges in the Chinese basic materials sector, particularly in real estate and FAI, while also noting some resilience in commodity prices and production in specific areas like copper and NEVs. The potential for policy intervention remains a critical factor for market stabilization moving forward.

Company Overview - Albemarle is one of the world's largest lithium producers, primarily serving the battery market, especially for electric vehicles. The company is fully integrated, with upstream resources including salt brine deposits in Chile and the US, and hard rock mines in Australia, which are joint ventures. Albemarle operates lithium refining plants in Chile, the US, Australia, and China. Additionally, it is a global leader in bromine production and a major producer of oil refining catalysts [9]. Options Activity - Recent options trading data indicates a bullish sentiment among investors, with 55% of trades being bullish and 38% bearish. A total of 18 trades were detected, comprising 4 puts valued at $202,893 and 14 calls valued at $814,705 [1]. - The major market movers are focusing on a price range between $40.0 and $110.0 for Albemarle over the last three months, indicating significant interest within this band [2]. - An analysis of the last 30 days shows the evolution of volume and open interest for calls and puts, providing insights into liquidity and investor interest [3][4]. Market Sentiment - Current trading volume for Albemarle stands at 1,225,541, with the stock price at $82.25, reflecting a 1.63% increase. RSI readings suggest the stock may be approaching overbought conditions [14]. - Expert opinions on Albemarle show a consensus target price of $78.5, with a recent upgrade from UBS to Neutral and a revised price target of $89, while Baird maintains an Underperform rating with a target price of $68 [11][12].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Lithium Industry in China - **Key Companies Discussed**: Ganfeng Lithium, Tianqi Lithium Core Insights and Arguments - **Lithium Futures Decline**: Lithium futures prices fell as CATL prepared to restart mining operations at the Jianxiawo site, with a resumption date set for November 2025. Lithium stocks dropped by 3-11% on September 10, 2025, indicating a market reaction to the earlier-than-expected timeline [3][5][54] - **Supply Risks**: Concerns remain regarding supply risks for China's lepidolite mines. The mining license for Jianxiawo may only cover clay, not lithium, and an audit report for remaining mines is due by September 30, 2025. This uncertainty contributes to a cautious outlook on the lithium sector [3][5] - **Price Trends**: Lithium carbonate prices have decreased by 3% year-to-date, while companies like Tianqi and Ganfeng have seen stock price increases of 33-69% [3][5] - **Solid State Battery Development**: Eve Energy's announcement of its Longquan II all-solid-state battery base achieving production capacity of nearly 500,000 battery cells has positively influenced investor sentiment, particularly benefiting Ganfeng over Tianqi [3] - **Market Dynamics**: The recent speculation about production halts among lithium producers led to a temporary price rally, but the report suggests that many of these tailwinds could become headwinds, particularly with the resumption of production by halted lithium producers [3][5] Additional Important Information - **Stock Performance**: - Ganfeng Lithium's A shares increased by 17.5% over the past week, while Tianqi Lithium's A shares rose by 4.3% [5] - The A/H premium for Ganfeng increased by 8.2 percentage points, while Tianqi's A/H premium remained stable [5] - **Lithium Price Movements**: - Lithium carbonate prices are currently at CNY 73,300 per ton, down from CNY 74,800 a week ago, reflecting a 2% decrease [5] - The futures price for lithium carbonate is around CNY 70,720 per ton, indicating a decline of 1.6% [5] - **Inventory Levels**: Lithium inventory remains high at 140,000 tons, only slightly down from 142,000 tons in early August, suggesting ongoing supply pressures [3][5] Conclusion - The lithium industry in China is facing a complex landscape with potential supply disruptions, fluctuating prices, and evolving market dynamics driven by technological advancements in battery production. Investors are advised to remain cautious as the market adjusts to these developments [3][5]

Group 1 - The author has a background in private credit and commercial real estate (CRE) mezzanine financing, indicating expertise in financial analysis and investment strategies [1] - The author has collaborated with prominent CRE developers, suggesting a strong network and understanding of the real estate market [1] - The author is a fluent Mandarin speaker, which may provide advantages in conducting business in China and Asia [1] Group 2 - The article expresses the author's personal opinions and research, emphasizing that it is not influenced by external compensation [2] - There is a beneficial long position in the shares of ALB.PR.A, indicating a positive outlook on this investment [2] - The content is intended for general informational purposes and should not be considered as financial advice [3]

Group 1 - The author has a background in private credit and commercial real estate (CRE) mezzanine financing, indicating expertise in financial analysis and investment strategies [1] - The author has collaborated with prominent CRE developers, suggesting a strong network and experience in the real estate sector [1] - The author is a fluent Mandarin speaker, which may provide advantages in understanding Asian markets and investment opportunities [1] Group 2 - The article expresses the author's personal opinions and research, highlighting a long position in ALB.PR.A shares, indicating a bullish outlook on this investment [2] - The author emphasizes that the information is for general informational purposes and should not be considered financial advice, which reflects a cautious approach to investment recommendations [3] - The article notes that past performance does not guarantee future results, underscoring the inherent uncertainties in investment decisions [4]

Summary of Key Takeaways from the Anti-Involution Trip in China Industry Overview - The report focuses on the **China Materials** sector, specifically analyzing the impacts of the **anti-involution** initiative on the **steel**, **lithium**, and **coal** industries [1][2][10]. Core Insights Anti-Involution Initiative - The anti-involution program aims to stabilize industry profits and curb deflation, with production levels being determined by the National Development and Reform Commission (NDRC) based on demand assumptions [2][3]. - The initiative is expected to lead to a recovery in industry profitability, although it will likely remain range-bound due to varying factors such as state ownership and current profitability levels [2]. Steel Industry - A production cut order has been issued by Beijing, but it has not yet reached Tangshan steel mills. Some mills believe production cuts are unnecessary due to positive margins, while others anticipate cuts in Q4 [3]. - Regions like Shandong, Jiangsu, and Liaoning are actively cutting production due to their lower GDP exposure to steel, while Tangshan mills have agreed to control production to maintain positive margins [3]. Lithium Industry - Demand for lithium is stronger than expected, driven by robust energy storage system (ESS) and electric vehicle (EV) demand [4]. - Potential supply cuts from lepidolite mines in Yichun could impact production, with a >50% chance of shutdowns lasting three to six months during license conversion, affecting approximately 150,000 tons per annum of lithium carbonate equivalent (LCE) [4]. Coal Industry - Coal production has decreased by 5% since overproduction inspections in July, with a slight decline in supply expected towards year-end [10]. - Total coal demand is projected to rise by 1-2% year-on-year in 2025, with thermal prices expected to fluctuate between RMB 640-700 per ton, indicating limited downside [10]. - Approximately 20% of coking coal mines are currently loss-making, and potential volume increases from Mongolia are limited by port inventory capacity and rising costs [10]. Additional Important Points - The pace of recovery in profitability across different segments will vary based on the mix of state ownership and market conditions [2]. - The report emphasizes the importance of monitoring production adjustments and demand trends in these sectors to identify potential investment opportunities and risks [2][4][10].

1. Report Industry Investment Ratings No specific industry investment ratings are provided in the report. 2. Core Viewpoints - The far - worse - than - expected US August non - farm payroll data makes a September interest rate cut almost certain, but the subsequent interest rate cut debate is more complex. The shift from full - time to part - time jobs indicates economic weakness [8][22]. - For the overall market, although the regulatory authorities have taken actions to cool down, the core drivers of the upward trend have not changed substantially, so the market is unlikely to have a trend - like callback. It is expected to show a volatile and slightly stronger trend later [11]. 3. Summary by Related Catalogs 3.1 US Economy and Interest Rate Expectations - US August non - farm employment increased by 22,000, far lower than the expected 75,000, and the unemployment rate was 4.3%, a nearly four - year high. The June employment data was revised down to negative growth, the first since 2020. The market expects a September interest rate cut, and there are debates about the magnitude and subsequent cuts [7][8][22]. 3.2 Sector - specific Analysis 3.2.1 Index Futures - The upward logic is gradually shifting to earnings. It is recommended to pay attention with a high attention index [9]. 3.2.2 Glass - Short - term rebound is difficult to continue, and it is more likely to have a weak and volatile market. The core pressure comes from the weak real estate background and the high premium of the futures main contract over the spot. It is a volatile market in the medium - term, and caution is needed at low levels [12]. 3.2.3 Natural Rubber - With macro and fundamental support, the market's bullish sentiment is rising. Overseas raw material prices are high, domestic inventory is slightly decreasing, and the price is expected to remain strong. Attention should be paid to arrival and inventory reduction [14]. 3.2.4 Copper - There is no trend - like opportunity, and the price will maintain a volatile trend. The supply of raw materials is tight, and the production of electrolytic copper is expected to be under pressure. The trading strategy is to buy at low prices [15][27]. 3.2.5 Other Commodities - Each commodity has different trends. For example, gold shows an upward trend due to the non - farm data; zinc, tin, etc. are in a range - bound state; aluminum needs to pay attention to the de - stocking inflection point; etc. Specific trends can be found in the corresponding commodity analysis parts [18][21][27].

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call was on the lithium and aluminum value chains within the China Materials sector, specifically during the "Anti-Involution Trip" [1] Lithium Sector Insights - Yongxing confirmed that a revised mineral reserves report will be submitted by September 30, as required by the local government. The previous report was based on a 0.2% Li2O cutoff grade, aligning with current standards [2] - Management anticipates minimal impact on lithium carbonate production costs, estimating an increase of several hundred RMB per ton if the mineral classification changes to lithium [2] - There is a potential risk of temporary shutdowns for other Yichun lepidolite mines due to mining license issues, with a possibility of a 1-2 year delay in reclassification processes [3] Aluminum Sector Insights - Chalco projects a ~3% increase in China's total aluminum demand for 2025, with potential upward revisions due to stronger-than-expected demand in July and August. Demand is particularly robust in the wire, automotive, and energy storage markets [4] - The long-term growth forecast for aluminum demand is expected to decline slightly to 1.5-2% annually in the domestic market and 1-1.5% globally [4] - The Chinese government is considering controlling alumina capacity, which may support prices, although no specific measures have been announced yet [5] - Limited overseas aluminum supply increases are anticipated in the next three years due to underdeveloped industry environments and infrastructure in Southeast Asia, the Middle East, and Africa [6] Additional Considerations - The local government is expected to standardize mineral type classifications and provide a grace period for compliance, reducing the likelihood of production curbs or suspensions [2] - Both Yongxing and another converter associated with the suspended Jianxiawo mine have approximately two weeks of lepidolite inventory, indicating a short-term buffer against supply disruptions [2] Conclusion - The conference highlighted the dynamics of the lithium and aluminum markets in China, with a focus on regulatory impacts, demand forecasts, and potential supply constraints. The insights provided are crucial for understanding the investment landscape in these sectors.

Summary of Tianqi Lithium Conference Call Company Overview - **Company**: Tianqi Lithium (002466.SZ) - **Industry**: Lithium production and supply Key Financial Highlights - **1H25 Net Profits**: Reported at Rmb84 million, indicating a challenging 2Q25 with a loss of approximately Rmb19 million, which, excluding foreign exchange gains, translates to a loss of around Rmb280 million [1][2][3] - **Revenue Trends**: Average lithium carbonate price decreased by 38% year-over-year and 13% quarter-over-quarter, reflecting a volatile market environment [1][9] - **Gross Profit Margins**: Spodumene contributed 67% to total gross profit in 1H25, up from 53% in 2024, with gross profit margins of 54% for spodumene and 26% for lithium [2][9] Operational Insights - **Free Cash Flow**: Barely breakeven at Rmb10 million in 1H25, with operating cash flow of Rmb1.8 billion and capital expenditures also at Rmb1.8 billion [3] - **Net Gearing Ratio**: Increased to 20% in 1H25 from 15% at the end of 1H24, indicating a rise in leverage [3] Market Position and Valuation - **Current Share Price**: Rmb43.96 as of August 29, 2025, with a target price set at Rmb26.26, suggesting a potential downside of 40.3% [4][11] - **Valuation Metrics**: Trading at 1.6x and 1.4x 2025E price-to-book ratios for A and H shares respectively [3][11] Risks and Opportunities - **Market Dynamics**: Recent price rallies in lithium and spodumene (up 15% and 11% respectively) could benefit Tianqi Lithium, especially if the company resumes its OEM process to reduce inventory [1] - **Upside Risks**: Stronger-than-expected demand for lithium-ion batteries and favorable government supply reform policies could positively impact the company's stock price [12] Additional Considerations - **Investment Ratings**: The company is currently rated as a "Sell" by analysts, reflecting concerns over profitability and market conditions [4][11] - **Future Projections**: Expected net profit for 2025 is projected at Rmb1.2 billion, with a significant recovery anticipated in subsequent years [6][11] This summary encapsulates the critical financial and operational insights from the conference call, highlighting both the challenges and potential opportunities for Tianqi Lithium in the current market landscape.