Report Industry Investment Ratings - Not provided in the given content Core Views - **Domestic Economy**: In July, China's export performance was strong, with non-US countries supporting exports and electromechanical products showing competitive advantages. However, future export growth is expected to decline gradually, and the decision - makers' policies are expected to improve the price index [2]. - **RMB Exchange Rate**: The US dollar is weak, and non - US currencies are generally strong. The short - term exchange rate between the US dollar and the RMB is expected to be supported in the range of 7.15 - 7.23, with a likely anchor at 7.20 [3]. - **Stock Index**: The domestic economic data did not exceed market expectations, and the short - term market is expected to continue the trend of shrinking volume and oscillation. Wait for the release of domestic financial data and US inflation data [5]. - **Treasury Bonds**: The liquidity has improved, and the primary market situation is better than expected. It is recommended to hold long positions [6]. - **Container Shipping**: The SCFI European line continues to decline. The futures price is expected to be in a volatile or slightly declining trend in the short - to - medium term [8]. - **Precious Metals**: Gold and silver are expected to be bullish in the medium - to - long term and strong in the short term. It is recommended to buy on dips [12]. - **Aluminum Industry Chain**: Aluminum prices are expected to fluctuate at a high level, alumina is expected to be in a weak oscillation, and casting aluminum alloy is expected to oscillate [13][14][15]. - **Nickel and Stainless Steel**: The nickel and stainless - steel market is expected to oscillate in the range of 118,000 - 126,000 yuan/ton and 12,500 - 13,100 yuan/ton respectively [16]. - **Lithium Carbonate**: The supply of lithium resources is expected to tighten, and investors need to be cautious about holding positions [17]. - **Industrial Silicon and Polysilicon**: Industrial silicon is expected to be in a volatile and slightly upward state, and polysilicon is expected to be in a wide - range oscillation [21]. - **Black Metals**: Steel products are expected to be in a volatile and slightly upward state in the short term, and iron ore is in a narrow - range oscillation. Coal and coke are not pessimistic in the medium - to - long term, and ferroalloys are recommended to be lightly bought on dips [22][24][28]. - **Energy and Chemicals**: Crude oil is at risk of decline, LPG remains in a loose situation, PTA - PX is recommended to expand the processing fee, ethylene glycol is recommended to be bought on dips, methanol 09 is weak, PP and PE are in an oscillatory state, PVC is to be short - allocated, pure benzene and styrene have weak short - term unilateral drives, fuel oil is weak, low - sulfur fuel oil is dragged down by crude oil, asphalt is in a weak oscillation, urea is in a weak oscillation, and glass, soda ash, and caustic soda are in a game between reality and expectation [30][32][37][40][42][43][46][48][50] Summary by Relevant Catalogs Macro - **Domestic**: In July, China's CPI was flat year - on - year, and the decline of PPI narrowed. The export was strong, and the decision - makers introduced a series of livelihood policies [1][2]. - **Overseas**: The US non - farm payrolls data was revised downwards, and the market's expectation of the Fed's interest rate cut increased. There were various international events such as potential US - Russia cease - fire agreements and tariff policies [1] RMB Exchange Rate - **Market Performance**: The on - shore RMB against the US dollar depreciated. The US dollar index was weak, and non - US currencies were strong [2][3] - **Influencing Factors**: The market's expectation of the Fed's interest rate cut, the US domestic economic situation, China's export performance, and the central bank's guidance [3][4] Stock Index - **Market Review**: The stock index oscillated, and the trading volume decreased. The futures index volume decreased, and the bullish sentiment declined [5] - **Influencing Factors**: Domestic economic data, policy support, and the upcoming release of financial and inflation data [5] Treasury Bonds - **Market Performance**: Treasury futures opened high and closed low, then rebounded. The liquidity improved, and the primary market situation was better than expected [5][6] - **Influencing Factors**: Liquidity improvement, the issuance of local bonds, and the impact of VAT adjustment [6] Container Shipping - **Market Performance**: The container shipping index (European line) futures oscillated, and the SCFI European line continued to decline [7][8] - **Influencing Factors**: Shipping company performance, geopolitical risks, and shipping company price adjustments [8] Precious Metals - **Market Performance**: Gold and silver prices fluctuated, affected by tariff policies and Fed news. Fund positions and inventory changed [9][10][11] - **Influencing Factors**: US tariff policies, Fed interest rate cut expectations, and China's gold reserve increase [9][10] Aluminum Industry Chain - **Aluminum**: The price oscillated, affected by inventory and the approaching peak season [13] - **Alumina**: The supply was excessive, the price was under pressure, and the cost was the support [14] - **Casting Aluminum Alloy**: The supply and demand were good, and the price followed the aluminum price [15] Nickel and Stainless Steel - **Market Performance**: The prices oscillated, and the fundamentals provided some support [16] - **Influencing Factors**: Supply and demand of nickel ore, nickel iron, and stainless steel, and macro - level factors such as tariffs and interest rate cut expectations [16] Lithium Carbonate - **Market Performance**: The futures price rose, and the inventory increased [16][17] - **Influencing Factors**: Mine - end news, production and demand of the lithium battery industry chain, and the suspension of mining operations [16][17] Industrial Silicon and Polysilicon - **Market Performance**: The prices oscillated, and the production and demand of the industry changed [17][18][19] - **Influencing Factors**: Production capacity changes, market demand, and the adjustment of registered brands [18][19][20] Black Metals - **Steel Products**: The prices oscillated, and the supply and demand were affected by production restrictions and market demand [22] - **Iron Ore**: The price oscillated in a narrow range, and the supply and demand were affected by coal prices and steel demand [22][23][24] - **Coal and Coke**: The prices oscillated strongly, and the supply and demand were affected by production inspections, imports, and downstream demand [24][25] - **Ferroalloys**: The prices fluctuated with coal prices, and the supply and demand were affected by steel production and raw material supply [26][27][28] Energy and Chemicals - **Crude Oil**: The price declined, and the supply and demand were affected by seasonal factors and geopolitical events [28][29][30] - **LPG**: The price was under pressure, and the supply was loose while the demand was slightly improved [31][32] - **PTA - PX**: The price followed the cost, and there was a supply - demand gap in August [32][33] - **Ethylene Glycol**: The price oscillated, and the supply and demand were in a weak balance [36] - **Methanol**: The 09 contract was weak, and the port inventory increased [37][38] - **PP and PE**: The prices oscillated, and the supply and demand were in a state of change [39][40][42] - **PVC**: The price was high - valued and high - inventory, and it was recommended to be short - allocated [43] - **Pure Benzene and Styrene**: The short - term unilateral drive was weak, and the supply and demand situation was different [43][44][46] - **Fuel Oil and Low - Sulfur Fuel Oil**: The prices were affected by supply, demand, and inventory factors [46] - **Asphalt**: The price was in a weak oscillation, and the supply and demand were affected by weather and funds [47][48] - **Urea**: The price was in a weak oscillation, and the supply and demand were affected by export and agricultural demand [49][50] - **Glass, Soda Ash, and Caustic Soda**: The prices were in a game between reality and expectation, and the supply and demand were different [50][51][53]

1. Report Industry Investment Rating - No information provided in the content 2. Core Viewpoints of the Report - The commodity sentiment has cooled down, and the leading stocks have lost momentum. The market is dull, with a continuous oscillatory adjustment after a peak. The trading volume has been declining since last week's peak. There is no obvious driving force after the valuation repair, and there is no significant contradiction in the fundamentals. There are relatively more ship - buying activities recently, leading to short - term arrival pressure. The spot price has changed little, and the pressure from the delivery goods will be gradually digested by the market. The current futures price is slightly overvalued based on the warehouse receipt cost in Taicang, while the hedging profit is better when anchored to the warehouse receipt cost in Chongqing. Industry customers who are not optimistic about the future market can consider hedging after August to lock in the futures profit and quickly recover funds through delivery. According to the latest data from Steel Union, the CFR quotation remains unchanged at $114. There is no obvious contradiction in inventory and delivery volume. Due to cost support, the strategy can consider selling the lg2509 - p - 800 contract at an appropriate time [3] 3. Summaries According to Relevant Catalogs 3.1 Log Price Range Forecast - The monthly price range forecast for logs is 820 - 860, with a current 20 - day rolling volatility of 16.28% and a historical percentile of 67.4% over the past 3 years [2] 3.2 Log Hedging Strategy - **Inventory Management**: When the log import volume is high and the inventory is at a high level, and there are concerns about price drops, for long - position spot exposure, it is recommended to short log futures (lg2509) to lock in profits and cover production costs, with a hedging ratio of 25% and an advisable entry range of 850 - 875 [2] - **Procurement Management**: When the regular procurement inventory is low and procurement is to be made according to order situations, for short - position spot exposure, it is recommended to buy log futures (lg2509) at present to lock in procurement costs in advance, with a hedging ratio of 25% and an advisable entry range of 810 - 820 [2] 3.3 Core Contradictions - The commodity market is dull after a peak, with the trading volume declining. There is no obvious driving force after the valuation repair, and there is no significant fundamental contradiction. There is short - term arrival pressure, and the delivery pressure will be digested. The current futures price is slightly overvalued based on Taicang's warehouse receipt cost, while the hedging profit is better when anchored to Chongqing's cost. Industry customers can consider hedging after August. The CFR quotation remains unchanged, and there is no obvious contradiction in inventory and delivery volume. A strategy of selling the lg2509 - p - 800 contract at an appropriate time can be considered [3] 3.4 Spot and Basis - On July 29, 2025, the spot prices of different specifications of logs in various ports (such as 3.9 large (3.8A) in Rizhao Port, 4 large (3.8A) in Taicang Port, etc.) and their corresponding basis values are presented. Some spot prices have no change, while some have small fluctuations. The basis values vary according to different specifications and ports [5][8] 3.5利多解读 (Likely Positive Factors) - Traders are willing to jointly support prices due to continuous import losses; the import cost continues to rise; the overall commodity sentiment has improved; and there is an impact from funds [7] 3.6利空解读 (Likely Negative Factors) - The peak season fails to show strong performance; the foreign shipment volume continues to increase [7] 3.7 Log Data Overview - **Supply**: The radiation pine import volume in June 2025 was 1.61 million m³, a decrease of 80,000 m³ from the previous period but a 35.3% increase year - on - year [9] - **Inventory**: As of July 25, 2025, the national port inventory was 3.17 million m³, a decrease of 120,000 m³ from the previous week and a 3.4% decrease year - on - year. The port inventory in Shandong was 1,930,000 m³, a decrease of 2,000 m³ from the previous week but a 5.8% increase year - on - year. The port inventory in Jiangsu was 1,016,400 m³, a decrease of 91,169 m³ from the previous week and a 21.4% increase year - on - year [9] - **Demand**: As of July 25, 2025, the average daily log delivery volume at ports was 64,100 m³, an increase of 1,700 m³ from the previous week and a 27.2% increase year - on - year. The average daily delivery volume in Shandong was 33,900 m³, an increase of 300 m³ from the previous week and a 34.5% increase year - on - year. The average daily delivery volume in Jiangsu was 24,600 m³, an increase of 1,400 m³ from the previous week and a 31.6% increase year - on - year [9] - **Profit**: As of August 1, 2025, the radiation pine import profit was - 82 yuan/m³, a decrease of 1 yuan/m³ from the previous week. The spruce import profit was - 95 yuan/m³, an increase of 2 yuan/m³ from the previous week [9] - **Main Spot Prices**: On July 29, 2025, the spot prices of some log specifications (such as 3.9 medium (3.8A) in Rizhao Port, 4 medium (3.8A) in Taicang Port) showed no change compared to the previous period, with varying year - on - year decreases [9] - **External Market Quotation**: As of August 1, 2025, the CFR quotation was $114, unchanged from the previous period and a 3.4% decrease year - on - year [9]

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core View The commodity market has significant fluctuations, while the log market remains relatively stable with a 6 - day consecutive reduction in positions. The main contract of logs closed at over 830 (+2), with a reduction of 164 lots and a remaining position of 24,000 lots. The subsequent log market is expected to have low - volatility oscillations, and the current valuation is slightly high [3][4][5]. 3. Summary by Relevant Catalogs 3.1 Log Price Range Forecast - The monthly price range forecast for logs is 820 - 860, with a current 20 - day rolling volatility of 16.28% and a 3 - year historical percentile of 67.4% [2]. 3.2 Log Hedging Strategy - **Inventory Management**: When log imports are high and inventory is at a high level, to prevent inventory losses, enterprises can short log futures (lg2509) with a 25% hedging ratio at an entry range of 850 - 875 [2]. - **Procurement Management**: When the regular procurement inventory is low, to prevent rising log prices from increasing procurement costs, enterprises can buy log futures (lg2509) at present with a 25% hedging ratio at an entry range of 810 - 820 [2]. 3.3 Core Contradiction The log market has experienced 6 consecutive days of position - reduction, and the commodity market fluctuates greatly, while the log market is quiet [3]. 3.4 Market Conditions - The main contract closed at over 830 (+2), with a reduction of 164 lots and a remaining position of 24,000 lots [4]. - In the spot market, the price of 4 - meter small A in Taicang increased by 10 yuan/m³, and the price of 5.9 - meter small A in Lanshan decreased by 10 yuan/m³. The spot price of the delivery goods in Taicang increased by 10 yuan. There are no significant changes in the fundamentals. Newly registered warehouse receipts will be cancelled by the end of July if not matched for delivery, and they will not have a significant impact. Future attention should be paid to new warehouse receipts in August [5]. 3.5 Factors Affecting the Market - **Positive Factors**: Importers are willing to support prices jointly due to continuous import losses; import costs continue to rise; the overall sentiment in the commodity market is warming up [8]. - **Negative Factors**: The outflow of delivery goods from the 07 contract suppresses the spot price; the shipping volume of foreign suppliers continues to increase [8]. 3.6 Log Data Overview | Category | Indicator | Update Date | Value | MoM | YoY | Frequency | Unit | | --- | --- | --- | --- | --- | --- | --- | --- | | Supply | Radiata pine import volume | 2025 - 06 - 30 | 1.61 billion m³ | - 800,000 m³ | 35.3% | Monthly | m³ | | Inventory | Port inventory (China) | 2025 - 07 - 18 | 3.29 billion m³ | 700,000 m³ | 4.1% | Weekly | m³ | | | Port inventory (Shandong) | 2025 - 07 - 18 | 1,932,000 m³ | 38,000 m³ | 6.0% | Weekly | m³ | | | Port inventory (Jiangsu) | 2025 - 07 - 18 | 1,107,569 m³ | - 7,431 m³ | 33.9% | Weekly | m³ | | Demand | Average daily log port outbound volume | 2025 - 07 - 18 | 624,000 m³ | 36,000 m³ | 23.3% | Weekly | m³ | | | Average daily outbound volume (Shandong) | 2025 - 07 - 18 | 336,000 m³ | - 17,000 m³ | 31.8% | Weekly | m³ | | | Average daily outbound volume (Jiangsu) | 2025 - 07 - 18 | 232,000 m³ | 47,000 m³ | 32.6% | Weekly | m³ | | Profit | Radiata pine import profit | 2025 - 07 - 25 | - 83 yuan/m³ | 0 | - | Weekly | yuan/m³ | | | Spruce import profit | 2025 - 07 - 25 | - 44 yuan/m³ | - 1 yuan/m³ | - | Weekly | yuan/m³ | | Main Spot | 3.9 - meter medium (3.8A) in Rizhao Port | 2025 - 07 - 25 | 740 yuan/m³ | 0 | - 8.6% | Daily | yuan/m³ | | | 4 - meter medium (3.8A) in Taicang Port | 2025 - 07 - 25 | 760 yuan/m³ | 0 | - 7.3% | Daily | yuan/m³ | | | 5.9 - meter medium (5.8A) in Rizhao Port | 2025 - 07 - 25 | 770 yuan/m³ | 0 | - 7.2% | Daily | yuan/m³ | | | 6 - meter medium (5.8A) in Taicang Port | 2025 - 07 - 25 | 770 yuan/m³ | 0 | - 9.4% | Daily | yuan/m³ | [10]

Group 1: Report Overview - Report Name: Nanhua Log Industry Risk Management Daily Report [1] - Date: July 15, 2025 [1] - Analyst: Song Jipeng (Investment Consulting License No.: Z0016598) [1] - Investment Consulting Business Qualification: CSRC License [2011] No. 1290 [1] Group 2: Log Price Forecast and Hedging Strategies - Log Price Range Forecast (Monthly): 740 - 820 [2] - Current Volatility (20 - day Rolling): 16.28% [2] - Current Volatility Historical Percentile (3 - year): 67.4% [2] - Hedging Strategy for High Import Volume and High Inventory: Short log futures (lg2509) at 800 - 820 with a 25% hedging ratio to lock in profits and cover production costs [2] - Hedging Strategy for Low Standing Inventory: Long log futures (lg2509) at 750 - 800 with a 25% hedging ratio to lock in procurement costs [2] Group 3: Core Contradiction and Strategy - Current Situation: The position is awkward, the direction is unclear, and trading is challenging. The main driver of the current price decline is the disposal of delivery goods, and it's hard to judge how long it will take to digest them. There is a peak - season expectation and rising import costs in the future [3] - Strategy: Rest, observe, and wait [3] Group 4: Bullish Factors - Bullish Factor: Traders are willing to jointly support prices due to continuous import losses [4] Group 5: Bearish Factors - Bearish Factor 1: The outflow of delivery goods from the 07 contract suppresses the spot price [5] - Bearish Factor 2: The continuous increase in foreign shipments [5] Group 6: Spot and Basis - Spot Price and Basis Data: Presented for different specifications, ports, and dates, with the calculation formula for the basis (converted) provided [5][8][9] Group 7: Log Data Overview Supply - Radiation Pine Import Volume (May 31, 2025): 169 million m³, a month - on - month increase of 4 million m³ and a year - on - year decrease of 2.3% [9] Inventory - Port Inventory (China, July 11, 2025): 322 million m³, a week - on - week decrease of 1 million m³ and a year - on - year decrease of 3.0% [9] - Port Inventory (Shandong, July 11, 2025): 1,894,000 m³, a week - on - week decrease of 32,000 m³ and a year - on - year increase of 7.4% [9] - Port Inventory (Jiangsu, July 11, 2025): 1,115,000 m³, a week - on - week increase of 21,089 m³ and a year - on - year increase of 29.6% [9] - Log Port Daily Average Outbound Volume (July 11, 2025): 5.88 million m³, a week - on - week decrease of 0.81 million m³ and a year - on - year increase of 22.0% [9] Demand - Daily Average Outbound Volume (Shandong, July 11, 2025): 3.53 million m³, a week - on - week decrease of 0.37 million m³ and a year - on - year increase of 54.2% [9] - Daily Average Outbound Volume (Jiangsu, July 11, 2025): 1.85 million m³, a week - on - week decrease of 0.3 million m³ and a year - on - year decrease of 5.1% [9] Profit - Radiation Pine Import Profit (July 18, 2025): - 82 yuan/m³, no week - on - week change [9] - Spruce Import Profit (July 18, 2025): - 42 yuan/m³, a week - on - week decrease of 3 yuan/m³ [9] Main Spot - Spot Prices for Different Specifications and Ports on July 15, 2025 are provided, along with their week - on - week and year - on - year changes [9]

Core Viewpoint - The introduction of lumber futures in China aims to mitigate price volatility risks faced by timber enterprises, particularly in the context of high dependence on imports and fluctuating demand from the construction industry [1][2]. Market Overview - The real estate market's cyclical downturn has significantly impacted the demand for construction timber, leading to a nearly 48% decrease in the import volume of softwood logs from 49.88 million cubic meters in 2021 to 26.12 million cubic meters in 2024 [2]. - Increased environmental awareness has shifted the demand structure in the timber market, with industries like furniture manufacturing favoring sustainable wood options [2]. - Price volatility has exacerbated operational challenges for timber enterprises, complicating cost control for importers and squeezing profit margins for processing companies [2]. Measurement Standards - There are inconsistencies in measurement standards across different regions in China, leading to discrepancies in the volume of timber between futures and spot markets [3]. - The northern and southern markets have different practices regarding timber length and diameter measurements, which can affect pricing and cost estimation for downstream processing companies [3]. Futures Hedging Cases - Case 1: A timber processing company successfully executed a "futures to spot" transaction, allowing them to secure raw material supply and control procurement costs by facilitating early delivery of timber [4][5]. - Case 2: A large timber trading company utilized futures to hedge against price declines, locking in a sales price of 865.5 yuan per cubic meter for their timber, thus avoiding potential losses from market depreciation [6][8]. Implementation and Training - The futures company provided tailored training and support to clients, including risk assessments and mock delivery exercises, to enhance their understanding of the delivery process and compliance [7]. - A detailed delivery plan was developed for the trading company, considering various costs associated with delivery, which helped streamline the process and reduce storage costs [7]. Conclusion - The successful completion of the first lumber futures delivery marks a significant step towards maturity in the market, emphasizing the need for industry participants to adopt standardized practices and a hedging mindset to navigate price fluctuations effectively [8].