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

2025年，全国焦炭产量50412万吨，同比增2.9%。其中12月焦炭产量为4274万吨，同环比分别增长1.9% 和2.5%；不过，据此测算，12月份焦炭日均产量环比下降0.8%至138万吨。 2025年，全国钢材产量达到144612万吨，同比增长3.1%。但12月钢材产量同环比分别下降3.8%和 0.5%，至11531万吨；12月份钢材日均产量372万吨，环比下降3.7%。 国家统计局最新数据显示，2025全年，全国焦炭和钢材产量同比呈现增长，粗钢和生铁产量则同比呈 降，且降至多年来低位。具体来看： 2025年，全国生铁产量同比下降3.0%，至83604万吨，降至2020年以来最低水平。其中12月生铁产量同 环比分别下降9.9%和2.6%至6072万吨，环比连续第七月下降；当月生铁日均产量196万吨，环比降 5.7%。 2025年，全国粗钢产量96081万吨，同比降4.4%，为2019年以来低位。12月粗钢产量为6818万吨，同环 比分别下降10.3%和2.4%，同样是连续第七月环比下降；12月粗钢日均产量220万吨，环比降5.6%。 ...

We came across a bullish thesis on Nucor Corporation on r/Valueinvesting by ahlornjtvn139. In this article, we will summarize the bulls’ thesis on NUE. Nucor Corporation's share was trading at $174.39 as of January 16th. NUE’s trailing and forward P/E were 24.49 and 15.22 respectively according to Yahoo Finance. industry steel Photo by ant rozetsky on Unsplash Nucor Corporation engages in the manufacture and sale of steel and steel products. NUE’s current share price of around $173 reflects a premium dr ...

Core Insights - POSCO Holdings Inc. has enhanced its partnership with Yaskawa Electric to promote advanced automation in its global mobility-parts operations [1] Group 1: Partnership and Agreement - POSCO Mobility Solutions, Yaskawa, and POSCO DX signed a three-way agreement on January 14 to implement integrated robotic systems for producing drive motor cores, essential components for EVs and hybrid vehicles [2] - The collaboration will extend to POSCO Mobility Solutions' facilities in Cheonan, Pohang, and international locations in Poland, Mexico, and India [2] Group 2: Automation and Production Improvements - The planned robotic systems will automate material handling and real-time quality sorting, aiming to enhance safety, reduce manual labor, and increase production speed [3] - POSCO DX will manage system design and integration, while Yaskawa will provide high-precision robots and technical support [3] Group 3: Strategic Alignment - This initiative builds on successful pilot applications at the Pohang facility and aligns with POSCO's long-term strategy to enhance robotics, automation, and AI-driven manufacturing across its steel, battery, and industrial sectors [4] - The partnership supports the group's goal of advancing physical AI and transitioning to next-generation intelligent factories [4] Group 4: Stock Performance - Shares of POSCO Holdings Inc. (PKX) have increased by 22.6% over the past year, compared to a 48.7% rise in the industry [6]

Core Viewpoint - Jinan aims to implement an industrial strong city strategy by 2026, focusing on building a modern industrial system Group 1: Strengthening Advantageous Industries - The city will focus on electronic information, automotive, high-end software, and modern medicine industries, aiming to enhance scale, extend chains, and grow enterprises [2] - In the electronic information sector, Jinan plans to achieve an industry scale of 240 billion yuan by accelerating the construction of semiconductor and micro-display projects [2] - The automotive industry aims for a scale of 180 billion yuan, supporting companies like BYD and Geely in introducing high-end models and promoting collaborative development [2] - The high-end software sector targets a scale of 130 billion yuan, emphasizing the development of industrial software and AI applications [2] - The modern medicine industry, relying on key enterprises, aims for a scale of 52 billion yuan by enhancing various pharmaceutical sectors [2] Group 2: Cultivating Characteristic Industries - Jinan will focus on high-end CNC machine tools, robotics, specialized equipment, steel, advanced materials, and food and bio-manufacturing, aiming to create competitive industrial clusters [4] - The high-end CNC machine tools and robotics sector targets a scale of 55 billion yuan, with key projects like the industrial mother machine park [4] - The specialized equipment industry aims for a scale of 115 billion yuan, with support for leading companies and project expansions [4] - The steel industry will focus on green low-carbon transformation, targeting a scale of 165 billion yuan by developing high-value products [4] - The advanced materials sector aims for a scale of 35 billion yuan, promoting innovation and expansion in chemical and metal materials [4] - The food and bio-manufacturing industry targets a scale of 77.5 billion yuan, supporting innovative development of key enterprises [4]

Core Viewpoint - VanEck Vectors Steel ETF (SLX) offers targeted exposure to global steel producers and related businesses, focusing on companies with revenues closely linked to the steel value chain [1] Group 1: Investment Strategy - The strategy captures operating leverage to industrial production, construction, and infrastructure activity while being sensitive to raw-material input costs and environmental policy [1] - SLX serves as a tactical overlay for cyclical tilts, a satellite allocation for inflation-sensitive exposures, or a thematic sleeve aligned with infrastructure and re-shoring narratives [1] Group 2: Portfolio Behavior - Portfolio behavior typically reflects high cyclicality and factor tilts toward value and commodity beta, with quality dispersion driven by balance-sheet strength and cost positions [1] - Returns can be influenced by shifts in trade policy, currency moves, energy prices, and capital-expenditure cycles across regions [1] Group 3: Investor Profiles - Suitable investor profiles include macro allocators seeking targeted cycle expression and diversified multi-asset portfolios using sector satellites to complement broad equities [1] Group 4: Market Conditions - Regimes with improving leading indicators, supportive fiscal investment, and steepening curves tend to be favorable, while global slowdowns and margin pressure challenge results [1] Group 5: Risks - A key risk to monitor is concentration, which can amplify stock-specific and policy-related shocks [1]

Company Overview - Cleveland-Cliffs stock experienced a nearly 10% increase this week after a downgrade led to a previous drop, indicating investor interest in the stock despite recent valuation concerns [1][2] - The current stock price is $14.01, with a market capitalization of $8.0 billion [3] Stock Performance - The stock has risen over 50% in the last six months, reflecting strong market performance prior to the downgrade [2] - The stock's 52-week range is between $5.63 and $16.70, showing significant volatility [4] Industry Context - The steel industry is benefiting from increased demand in infrastructure, construction, and automotive sectors, which is driving up prices and profit margins for domestic producers [4] - Anticipation of economic recovery, potential interest rate reductions, and robust government infrastructure investment are contributing to positive sentiment in the steel sector [4] Peer Comparison - Nucor, a domestic peer, has also seen its stock rise nearly 7% since the beginning of the year, indicating a broader trend in the steel industry [5] - The upcoming earnings season will be crucial to determine if the demand is benefiting all domestic steelmakers or if the gains are specific to certain companies [5]

Core Points - Metallus has reached a new tentative agreement for a four-year contract with the United Steelworkers Local 1123 after previous agreements were rejected [1][2] - The new contract aims to balance employee needs and company priorities, ensuring job stability and supporting future success [2] - The current labor contract has been extended for an additional 14 days until February 12, 2026, allowing time for the union to communicate with its members [2] Company Overview - Metallus (NYSE: MTUS) specializes in high-performance specialty metals, manufactured components, and supply chain solutions, primarily serving industrial, automotive, aerospace & defense, and energy markets [4] - The company employs approximately 1,850 people and reported sales of $1.1 billion in 2024 [4] - Metallus has over 100 years of experience in producing high-quality steel, including alloy steel bars and seamless mechanical tubing [4] Labor Relations - The contract covers around 1,200 bargaining employees at Metallus' Canton, Ohio operations [3] - The CEO of Metallus emphasized the importance of constructive cooperation among all parties to reach a beneficial solution for employees and the company [2]

Market Overview - Major European markets closed lower due to geopolitical tensions and uncertainty surrounding French budget negotiations, with investors taking profits from recent gains [1][2] - The pan-European Stoxx 600 edged down 0.03%, with the U.K.'s FTSE 100 down 0.04%, Germany's DAX down 0.22%, and France's CAC 40 down 0.65% [3] Company Performance - In the UK market, BAE Systems, Natwest Group, Smiths Group, Schroders, National Grid, Standard Chartered, British Land Company, and The Sage Group gained between 1.4% to 2.3% [4] - Conversely, Pearson, Metlen Energy & Metals, Entain, Antofagasta, Endeavour Mining, Glencore, Anglo American Plc., and Pershing Square Holdings lost between 2% to 4% [4] - Daimler Truck Holding reported a decline in 2025 sales, contributing to its stock decline [5] - Siemens Energy saw a significant increase of over 5%, while Zalando, RWE, and Fresenius Medical Care gained between 1.5% to 1.7% [6] Notable Transactions - Kloeckner & Co shares soared over 28% following Worthington Steel's announcement of a $2.4 billion acquisition of the German steel processor [6] French Market Insights - In the French market, Kering and Essilor closed down by 4.7% and 4%, respectively, while LVMH, Stellantis, TP, and Renault lost between 2.7% to 3.1% [6][7]

Industry Overview - Earnings season is approaching for major North American steel companies, with results expected in the coming weeks [1] - Steel equities have outperformed, rising 17% over the past three months compared to the State Street SPDR S&P Metals & Mining ETF's 15%, driven by a supply-driven rally in Hot Rolled Coil (HRC) prices, which increased by 17% despite weak underlying demand [1] Market Dynamics - HRC metal margins have expanded over 20% relative to pre-tariff levels, and post-tariff mill utilization is approximately 160 basis points above historical norms [2] - Forward demand indicators are mixed as medium- and smaller-scale buyers adjust to trade uncertainty [2] Regulatory Environment - Clarity on the United States-Mexico-Canada Agreement (USMCA) and International Emergency Economic Powers Act (IEEPA) tariffs is needed to trigger larger steel-intensive projects, as the Supreme Court of the US recently deferred these matters [3] Company Projections - Price momentum is expected to continue through at least the first quarter, with projected HRC prices at $955 per ton, although upside is limited by a narrowing import arbitrage and a seasonal slowdown anticipated in summer [4] - Fourth-quarter results are expected to show weaker earnings due to seasonally lighter shipments and lagging sheet contracts, with a potential decline of up to 8% quarter-over-quarter [4] Company-Specific Insights - Nucor Corporation (NUE) is expected to outperform due to a conservative mid-quarter guide, while Cleveland-Cliffs (CLF) may report weakness from elevated costs [5] - Reliance, Inc. (RS) could exceed its fourth-quarter/first-quarter EPS guidance due to stronger pricing and lower customer pushback, despite risks from unplanned outages at Steel Dynamics's Butler mill and a transformer fire at Sinton [5] - Commercial Metals Company (CMC) reported that many large construction projects remain on hold but noted positive momentum in rebar fabrication, an area where NUE has exposure [6]