Manufacturing Sector - March manufacturing PMI improved to 50.4%, up 1.4 percentage points month-on-month, indicating a return to expansion[3] - The production index rose by 1.8 percentage points to 51.4%, while new orders increased by 3.0 percentage points to 51.6%[14] - Industrial raw material prices have rebounded significantly, with March PPI expected to rise by approximately 0.3% year-on-year[20] Non-Manufacturing Sector - Construction PMI increased by 1.1 percentage points to 49.3%, benefiting from the gradual resumption of projects post-holiday[22] - Service sector PMI rose to 50.2%, a 0.5 percentage point improvement, although new orders remain weak[30] Economic Outlook - Q1 GDP is projected to grow by approximately 5.0% year-on-year, supported by AI demand and fiscal spending[6] - The growth forecast includes primary, secondary, and tertiary industries at approximately 3.5%, 5.2%, and 5.0% respectively[34] - Input inflation may pressure profits in downstream enterprises, necessitating timely policy responses to support economic recovery[33] Risks - Potential risks include unexpected policy changes and a possible recession in the U.S. economy impacting domestic exports[35]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The performance of non - ferrous metals is differentiated, with the geopolitical situation in Iran still dominating capital market sentiment. The current tendency towards stagflation expectations and even recession trading has increased, and if the geopolitical situation eases, the trading direction will reverse. The Fed's interest - rate decision and inflation expectations also impact the non - ferrous metals market. China's domestic demand for non - ferrous metals is marginally improving, but overseas macro - factors are currently the main drivers. Attention should be paid to varieties with coordinated macro and micro changes after the geopolitical situation eases [12][14]. 3. Summary by Directory 3.1 First Part: Non - ferrous Metals Operation Logic and Investment Recommendations - **Macro Logic**: The non - ferrous metal market shows a differentiated trend. The Iran - related geopolitical situation dominates the market sentiment, with stagflation expectations increasing. The Fed did not cut interest rates as expected, and the expectation of interest - rate cuts within the year has dropped to once, with Powell's stance being hawkish. China's post - holiday demand for non - ferrous metals is marginally improving, but the future foreign trade situation is uncertain due to geopolitical factors. Energy cost increases may support marginal costs first, while demand orders are still under observation [12]. - **Geopolitical Situation**: The US is preparing for both diplomatic negotiations and military escalation with Iran. The US and Israel plan to carry out military strikes on Iran for another two to three weeks even if negotiations take place. Iran has stated that non - hostile ships can pass through the Strait of Hormuz safely under certain conditions. The global economic situation is also under pressure, with the US and the Eurozone showing signs of slowdown [13]. - **Investment Recommendations for Each Variety**: - **Copper**: With the easing of the Middle East situation, the price of copper is expected to rise in the medium and long term due to increased inflation expectations. The supply of copper concentrates is tight globally, but domestic smelting plants are not significantly restricted, and new plants are increasing production. Downstream demand is entering the peak season, and the de - stocking cycle in China is expected to start from late March to April. It is recommended to go long on dips and for downstream demanders to conduct long - hedging operations [15]. - **Zinc**: Overseas geopolitical conflicts have increased macro - pressure, but the demand for zinc is gradually recovering, and inventories are decreasing. The price is expected to fluctuate, and it is recommended to be short - term bearish and long on dips [17]. - **Aluminum Industry Chain**: For aluminum, the market sentiment has slightly improved, but there are still expectations of production disruptions in the Middle East. It is recommended to wait and see or buy on dips moderately. For alumina, the spot price is rising, but the futures price has corrected. It is recommended to wait and see. For recycled aluminum alloy, it is recommended to wait and see or take a bullish view [17]. - **Tin**: The non - ferrous metal market is rebounding. It is recommended to take a short - term long position, paying attention to capital sentiment, the situation at the mine end, and macro - factors [17]. - **Lead**: The geopolitical situation in Iran is easing, and the price of lead is fluctuating. The supply of primary and secondary lead is increasing, and downstream demand is gradually recovering. It is recommended to buy on dips and sell on rallies [18]. - **Nickel and Stainless Steel**: Geopolitical uncertainties continue to disrupt the market, but the cost of nickel products is strongly supported by the tight supply at the mine end. The production of stainless steel in March has significantly increased, and it is recommended to go long on dips for both nickel and stainless steel [18]. 3.2 Second Part: Non - ferrous Metals Market Review - The closing prices and price changes of various non - ferrous metals futures are presented. Copper closed at 95,590 with a 1.66% increase; zinc at 22,935 with a 0.17% decrease; aluminum at 23,860 with a 0.99% increase; alumina at 2,963 with a 1.69% decrease; tin at 352,430 with a 1.28% increase; lead at 16,495 with a 0.46% increase; nickel at 136,130 with a 1.99% increase; stainless steel at 14,490 with a 1.40% increase; and cast aluminum alloy at 22,930 with a 1.53% increase [19]. 3.3 Third Part: Non - ferrous Metals Position Analysis - The latest position analysis of the non - ferrous metal sector shows the net long - short strength, net long - short position differences, and changes in net long and net short positions for various varieties, along with the influencing factors [23]. 3.4 Fourth Part: Non - ferrous Metals Spot Market - The spot prices and price changes of various non - ferrous metals are provided. For example, the Yangtze River spot price of copper was 95,950 yuan/ton with a 2.02% increase; the Yangtze River spot price of 0 zinc was 22,930 yuan/ton with a 0.35% increase; the Yangtze River average spot price of aluminum was 23,760 yuan/ton with a 1.32% increase; and the average price of alumina in China was 2,770 yuan/ton with a 0.29% increase [24]. 3.5 Fifth Part: Non - ferrous Metals Industry Chain - For each non - ferrous metal variety, relevant industry chain data charts are presented, including inventory changes, processing fees, and price relationships, which help to understand the supply - demand relationship and price trends in the industry chain [26][27][30]. 3.6 Sixth Part: Non - ferrous Metals Arbitrage - For different non - ferrous metal varieties, charts related to arbitrage are provided, such as the ratio of domestic to foreign prices, basis, and price differences between different contracts, which can be used for arbitrage analysis [50][53][55]. 3.7 Seventh Part: Non - ferrous Metals Options - For each non - ferrous metal variety, charts related to options are presented, including historical volatility, implied volatility, trading volume, and open - interest ratio, which are useful for options trading analysis [67][70][73].

Market Overview - On March 19, the Asia-Pacific market experienced a significant downturn, termed "Black Thursday," with the Japanese stock market plummeting by 1,800 points and the South Korean market dropping nearly 3% [5][6]. - The MSCI global stock index fell by 0.6%, while Asian benchmark indices saw a sharp decline of 2.8%, indicating a risk-off sentiment among investors [8]. Key Drivers - The ongoing conflict in the Middle East has been identified as a primary factor suppressing market performance, particularly due to attacks on critical energy infrastructure, which have led to rising oil prices and heightened inflation concerns [7][10]. - Brent crude oil prices surged by 5%, driven by fears of prolonged conflict affecting energy supplies, particularly after Iran's attacks on Qatar's liquefied natural gas facilities [8][11]. Stock Market Reactions - The Shanghai Composite Index fell by 1.39%, with the Shenzhen Component down by 2.02% and the ChiNext Index down by 1.11%, as the market struggled to maintain the 4,000-point level [17]. - A total of 505 stocks rose while 4,955 stocks declined, with 14 stocks hitting the daily limit down [18]. Sector Performance - Oil and gas stocks showed resilience amid the market downturn, with companies like Tianhao Energy and Hongtong Gas hitting the daily limit up, and China National Offshore Oil Corporation and China Petroleum rising over 5% [19][20]. - The coal sector also saw gains, with Shaanxi Black Cat hitting the daily limit up [21]. - Renewable energy stocks remained active, with companies like Dongfang New Energy and Guangdong Electric Power A reaching the daily limit up [22]. - The computing power leasing sector continued its strong performance, with stocks like Tongniu Information and Meili Cloud hitting the daily limit up [23]. Declines in Other Sectors - The non-ferrous metals sector faced significant declines, with Hongqiao Group hitting the daily limit down [24]. - The storage chip sector underwent adjustments, with companies like Shenke Da and Hengsuo Co. dropping over 10% [25].

Core Viewpoint - In February, China's PPI and CPI both exceeded market expectations, with PPI and CPI surpassing Wind's consensus forecast by 0.3 and 0.4 percentage points respectively [1] Group 1: PPI Analysis - The strong performance of PPI is primarily driven by rising prices in non-ferrous metals and crude oil, which are input factors [1] - Estimated contributions to PPI's month-on-month increase include non-ferrous smelting (0.32 percentage points), chemicals (0.08 percentage points), computer communications (0.08 percentage points), and oil extraction (0.04 percentage points) [1] - The anticipated timing for PPI's year-on-year positive growth may be advanced further [1] Group 2: CPI Analysis - Key drivers for CPI include price increases in the service sector (air tickets, car rentals, travel agencies, hotel accommodations) and rising prices of crude oil and gold, in addition to the "Spring Festival misalignment" factor [1] - Under the current fluctuating geopolitical situation between the US and Iran, there may be sustained upward momentum in crude oil prices [1] - An estimated 1% increase in Brent crude oil prices could lead to a PPI increase of approximately 0.04 to 0.05 percentage points and a CPI increase of 0.01 to 0.02 percentage points [1] Group 3: Monetary Policy Outlook - The central bank of China is not expected to tighten monetary policy due to oil supply shocks and price increases, with a greater focus on observing changes in demand-side factors [1]

Core Viewpoint - The overall price level in February shows a significant recovery trend, with both CPI and PPI experiencing notable increases due to concentrated consumer demand during the Spring Festival and structural improvements in the economy [2][5][11]. CPI Analysis - In February, the national CPI increased from 0.2% to 1.3% year-on-year, marking the highest level in nearly three years, while the core CPI rose from 0.8% to 1.8% [5][6]. - Food prices shifted from a decline to an increase of 1.7%, contributing approximately 0.30 percentage points to the CPI increase, driven by heightened demand during the Spring Festival [6][7]. - Service prices surged by 1.6% year-on-year, influenced by concentrated consumer demand during the holiday, contributing about 0.75 percentage points to the CPI [6][7]. PPI Analysis - The PPI decreased by 0.9% year-on-year in February, with the decline narrowing by 0.5 percentage points compared to the previous month, marking the third consecutive month of reduced decline [11]. - The prices of production materials recorded a year-on-year decrease of 0.7%, while living materials saw a decline of 1.6% [11]. - Key industries such as electronic components and high-end equipment manufacturing showed price increases, with notable rises in aviation manufacturing (7.7%) and shipbuilding (0.5%) [11][15]. Price Trends - The PPI increased by 0.4% month-on-month in February, maintaining a five-month upward trend, primarily driven by rising production material prices [13]. - Significant price increases were observed in the energy sector, with oil and gas extraction prices rising by 5.1% and refined petroleum products by 0.7% [4][15]. - The prices of non-food industrial consumer goods expanded by 0.1 percentage points to 0.4% month-on-month, influenced by international geopolitical factors and rising commodity prices [7][15].

Market Overview - The Hang Seng Index closed at 25,757, up 1.72% for the day but down 3.28% year-to-date[3] - The Hang Seng Tech Index rose 3.15%, while the Hang Seng China Enterprises Index increased by 2.09%[9] - The S&P 500 and Nasdaq fell by 1.33% and 1.59% respectively, with year-to-date declines of 1.54% and 3.68%[3] Oil Price Surge - WTI crude oil prices surged approximately 36% and Brent crude by about 27% due to escalating conflicts in the Middle East, disrupting oil transport in the Strait of Hormuz[9] - The VIX index rose by 22%, reaching its highest level since April of the previous year, indicating increased market volatility[9] Employment Data - The U.S. non-farm payroll report for February showed a loss of 92,000 jobs, with the unemployment rate rising to 4.4%[9] - This data has heightened concerns regarding inflation and economic outlook[9] Sector Performance - JD.com reported a revenue of over 1.3 trillion yuan for 2025, a 13% year-on-year increase, with a core retail operating margin of 4.6%[9] - Biopharmaceutical stocks surged, with companies like 3SBio and CanSino rising over 9% following government support for the sector[9] Commodity Trends - Gold stocks faced pressure, with China Gold International and Tongguan Gold dropping by 5.20% and 1.93% respectively, amid rising inflation expectations due to oil price hikes[9] - The copper inventory on the LME increased by over 20,000 tons, marking the largest weekly rise since August 2024, contributing to a 43.69% increase in domestic copper stock[9]

Core Viewpoint - The article analyzes the February PMI data from a mid-level perspective, highlighting the seasonal characteristics of various manufacturing sectors and the impact of the Spring Festival on consumer activity. Group 1: Manufacturing Sector Analysis - In February, the PMI for high-tech manufacturing, equipment manufacturing, and high-energy-consuming industries decreased by 0.5, 0.3, and 0.1 points respectively, aligning with the seasonal characteristics of the manufacturing sector [1][6] - The consumer goods manufacturing PMI increased by 0.5 points, indicating a seasonal uptrend due to the Spring Festival's influence on consumer activities [1][6] - The three-month average PMI shows that industries such as non-ferrous metals, computer communication electronics, and pharmaceuticals are performing above the average, while automotive and specialized equipment sectors are also experiencing high levels of activity [1][8] Group 2: Marginal Changes in February - Among 17 sub-manufacturing sectors, the non-metallic mineral products PMI rose by 1.8 points, with export orders and product orders increasing by 10.6 and 2.0 points respectively [2][12] - The decline in sectors like non-ferrous metallurgy and petroleum processing is attributed to significant fluctuations in commodity prices at the beginning of the year [2][12] - The computer communication electronics sector saw a notable decrease, primarily due to the impact of the long holiday, although retail sales of electronic products showed rapid growth [2][12] Group 3: Price Trends - In February, prices in the petrochemical, black metal, and pharmaceutical sectors generally increased, while prices in non-ferrous metals, textiles, and food decreased [3][16] - The factory price index remained stable compared to the previous month, with most industries experiencing price increases, particularly in petroleum processing, which saw a rise of 15.5 points [3][16] Group 4: Emerging Industries - The new energy sector led the emerging industries with a PMI above 50, increasing by 5.2 points, while the energy-saving and environmental protection sector also saw a rise of 3.1 points [3][21] - The new generation information technology sector, despite being in a contraction phase, showed minimal deviation from seasonal averages, likely due to accelerated applications in artificial intelligence [3][21] Group 5: Construction and Service Industries - The construction sector's PMI decreased by 0.6 points to 48.2, with a slight recovery in housing construction PMI by 1.3 points, indicating optimism among construction firms regarding the upcoming working season [4][22] - The service sector's PMI increased significantly by 10.9 points, driven by strong performance in accommodation, catering, and cultural entertainment sectors, reflecting the positive impact of the long holiday [4][27]

Core Viewpoint - The return of inflation is one of the macro themes in China for 2026, driven by three main factors: the marginal demand for commodities like copper due to artificial intelligence, the decline of the US dollar index since 2025 enhancing the financial properties of commodities, and resource populism increasing global investor concerns about commodity supply [1][2]. Group 1: PPI Trends and Influences - Insufficient domestic demand is the primary drag on PPI from 2022 to 2025, with real estate investment being the decisive factor contributing over 60% to the decline [3][4]. - The PPI's low performance and the divergence between nominal GDP and real GDP highlight the negative impact of price declines on economic perception, with PPI being negative for 39 consecutive months by the end of 2025 [3][4]. - The contribution of various factors to PPI changes shows that demand factors, particularly in real estate, have the most significant impact, while supply and oil price factors contribute less [4][10]. Group 2: Industry Contributions to PPI - Since 2022, key industries such as oil and coal processing, chemical manufacturing, and non-ferrous metallurgy have significantly increased their contribution to PPI, shifting the pricing power from traditional real estate to energy, resources, and high-end manufacturing [10][11]. - The eight major industries contributing to PPI include oil and coal processing, chemical manufacturing, and electrical machinery, accounting for approximately 70% of the overall PPI changes [10][11]. Group 3: Commodity Market Dynamics - The commodity market has entered a significant upward cycle since the second half of 2025, supported by a depreciating dollar and global credit expansion, which improves the financial environment for commodities [2][24]. - Industrial metals have seen substantial price increases, with copper and aluminum prices rising by 18.51% and 45.78% respectively since early 2025, driven by structural demand and supply constraints [17][26]. - Energy and chemical sectors are currently lagging in price recovery but are expected to gain momentum as geopolitical tensions and domestic economic recovery support demand [21][22]. Group 4: Future PPI Projections - The PPI is likely to turn positive in the second half of 2026, with key commodities like iron ore, crude oil, and copper expected to drive this change, showing a strong correlation with PPI movements [2][36]. - The analysis indicates that the PPI's upward movement will be influenced by the ongoing price increases in major commodities, with a potential earlier turnaround in PPI if commodity prices rise significantly [39][40].

Group 1: PPI Trends and Influences - Domestic PPI has been in a downward trend from 2022 to 2025, primarily due to insufficient domestic demand, with real estate investment contributing over 60% to the decline[6] - The core logic behind the PPI decline is not merely supply imbalance but rather weak domestic demand, particularly in the real estate sector[6] - The PPI is expected to turn positive in Q2 2026, with significant contributions from rising commodity prices, particularly iron ore, crude oil, coal, copper, silicon, and lithium carbonate[51] Group 2: Commodity Price Dynamics - Since the second half of 2025, international and domestic commodity prices have begun a significant upward trend, driven by a depreciating dollar and increased structural demand from sectors like AI and renewable energy[2] - Key industrial metals such as copper and aluminum have seen price increases of 18.51% and 45.78% respectively since early 2025, while lithium carbonate prices surged by 93%[27] - The financial environment for commodities has improved due to a weakening dollar, which historically correlates with rising commodity prices[34] Group 3: Sector Contributions to PPI - The contribution of various sectors to PPI has shifted, with energy, resources, and high-end manufacturing gaining pricing power, while traditional real estate has diminished[1] - Eight key industries, including non-ferrous metallurgy and chemical manufacturing, now account for approximately 70% of the overall PPI pricing influence[14] - In the latter half of 2025, the month-on-month PPI growth was driven significantly by non-ferrous metallurgy, contributing 15.40% to the increase[15]

Report Summary 1. Report Industry Investment Rating - Not provided in the given report 2. Core View of the Report - The report presents the arbitrage data of various futures varieties on February 10, 2026, including basis, inter - month spreads, and inter - commodity spreads for power coal, energy chemicals, black metals, non - ferrous metals, agricultural products, and stock index futures [1] 3. Summary by Directory 3.1 Power Coal - The basis data for power coal from February 3 to February 9, 2026, shows values ranging from - 109 to - 104 yuan/ton. The inter - month spreads of 5 - 1, 9 - 1, and 9 - 5 are all 0 [2] 3.2 Energy Chemicals - **Energy Commodities**: Basis data for fuel oil, INE crude oil, and the ratio of crude oil to asphalt from February 3 to February 9, 2026, are provided, with basis values such as 178.39, 190.88, etc. and the ratio values like 0.1361, 0.1368, etc [7] - **Chemical Commodities**: Inter - month spreads for rubber, methanol, PTA, LLDPE, PVC, PP, and ethylene glycol are given, as well as inter - commodity spreads for LLDPE - PVC, LLDPE - PP, PP - PVC, and PP - 3 * methanol. Basis data for these chemical commodities from February 3 to February 9, 2026, are also presented [9][10] 3.3 Black Metals - Inter - month spreads for rebar, iron ore, coke, and coking coal are provided, along with inter - commodity spreads for rebar/iron ore, rebar/coke, coke/coking coal, and rebar - hot rolled coil. Basis data for these black metals from February 3 to February 9, 2026, are also shown [19][20] 3.4 Non - ferrous Metals - **Domestic Market**: Domestic basis data for copper, aluminum, zinc, lead, nickel, and tin from February 3 to February 9, 2026, are presented, with values like - 340, - 120, etc [28] - **London Market**: LME spreads, Shanghai - London ratios, CIF prices, domestic spot prices, and import profit and loss data for LME non - ferrous metals (copper, aluminum, zinc, lead, nickel, tin) on February 9, 2026, are provided [33] 3.5 Agricultural Products - Basis data for soybeans No.1, soybeans No.2, soybean meal, soybean oil, and corn from February 3 to February 9, 2026, are given. Inter - month spreads for multiple agricultural products and inter - commodity spreads for some agricultural products are also presented [41] 3.6 Stock Index Futures - Basis data for CSI 300, SSE 50, CSI 500, and CSI 1000 from February 3 to February 9, 2026, are provided, along with inter - month spreads for these stock indices [52][54]