1. Report Industry Investment Rating No information provided. 2. Core Viewpoints of the Report - The log market is generally loose due to the approaching off - season and the supply being relatively stable while demand may decline significantly under the influence of the summer real - estate off - season [4][39] - Although the domestic supply - demand fundamentals are loose and inventory is high, suppressing the market, the import price is inverted, providing strong support at the bottom [4][39] - The pattern of supply exceeding demand remains unchanged. It is recommended to mainly adopt the strategy of shorting on rallies, and pay attention to the 9 - 11 reverse spread [5][40] 3. Summary According to the Table of Contents 3.1 Preface Summary 3.1.1 Market Review - Supply side: In July, the log supply showed characteristics of "tight international supply, fluctuating domestic supply, and inventory accumulation". New Zealand's direct shipments to China in the first three weeks of July were only 920,000 JASm³, lower year - on - year. Domestic arrivals fluctuated sharply, with a cliff - like drop in the first ten - day period and concentrated arrivals in the last ten - day period. The total inventory at the end of the month was 3.29 million cubic meters, a 2.17% increase month - on - month [3][39] - Demand side: Construction demand was under continuous pressure. The fund availability rate was only 58.97% on July 22, and that of housing construction projects was as low as 52.1%, resulting in continuously low orders for construction timber. In August, due to the hot weather, it was the traditional off - season for real - estate and infrastructure construction, and demand might decline significantly [3][39] 3.1.2 Market Outlook - Supply is generally stable with a slight decrease, but demand may decline significantly under the influence of the summer real - estate off - season, making the log market generally loose [4][39] - In terms of valuation, the domestic supply - demand fundamentals are loose, and the high inventory suppresses the market. The surge in delivery intention at the end of the month removes the possibility of a squeeze to some extent, suppressing the upward space. However, the import price is inverted, providing strong support at the bottom [4][39] 3.1.3 Strategy Recommendation - Unilateral: The pattern of supply exceeding demand remains unchanged. Continue to mainly adopt the strategy of shorting on rallies. After the first delivery, the trading volume of the market is generally good, and issues such as the size difference, delivery efficiency, delivery storage capacity, and inspection standards in the delivery details have been resolved, basically removing the possibility of a squeeze [5][40] - Arbitrage: Pay attention to the 9 - 11 reverse spread [5][40] 3.2 Fundamental Situation 3.2.1 Market Review - Radiation pine: Domestic spot prices showed regional differentiation, with import prices rising and finished timber prices remaining stable. The price of 3.9 - meter medium - A radiation pine logs in Rizhao Port, Shandong decreased slightly from 750 yuan/cubic meter at the beginning of the month to 740 yuan/cubic meter. The price of 4 - meter medium - A radiation pine logs in Taicang Port, Jiangsu first decreased and then increased. The CFR price of radiation pine increased from 108.5 - 111 US dollars/JAS cubic meter in June to 114 US dollars/JAS cubic meter in July [9][10] - Spruce and fir: Domestic spot prices rose at the end of the month, import prices continued to rise, and finished timber prices remained stable. The spot price of spruce and fir in Rizhao Port, Shandong increased from 1090 yuan/cubic meter at the beginning to 1150 yuan/cubic meter at the end of the month. The CFR price of spruce increased from 123 euros/JAS cubic meter in June to 126 euros/JAS cubic meter in July [11][12] - Log futures: The price trend was "rising first and then fluctuating", with the main contract price reaching a new high in the middle of July but showing differentiation at the end of the month due to delivery pressure. The first large - scale delivery was completed, and the delivery scope extended from coastal to inland areas [17][18] 3.2.2 Supply Slightly Decreases but Remains Generally Stable - New Zealand shipments: The total shipments in July were tight, with significant weekly fluctuations. The shipments in the first three weeks were only 920,000 JASm³, and the supply gap was not fully compensated [22] - Domestic arrivals: The arrivals were first depressed and then increased, with concentrated arrivals at the end of the month. The arrivals in the second week were only 177,000 cubic meters, and in the third week, they increased to 449,000 cubic meters [23] - Port inventory: It decreased slightly but remained high overall. The total inventory first decreased and then increased, with regional differences. Radiation pine dominated the inventory changes, and there was a continuous structural shortage [27][28] 3.2.3 Weak Real - Estate and Poor Business Operations Lead to Declining Downstream Demand - Construction demand: Real - estate development investment continued to shrink, with a 11.2% year - on - year decrease in the first six months. New construction area decreased, and the completion area improved limitedly. The sales and capital of real - estate enterprises were under pressure, and the demand for construction timber was affected [33][35] - Infrastructure investment: The growth rate of infrastructure investment declined from a high level. Although there were new large - scale projects, the new construction projects were weak, and the capital availability rate was low. The demand for timber varied regionally [35][36] 3.2.4 Uncertainty in Futures Pricing under the First Log Delivery is Resolved - The linkage between futures and spot prices has been significantly enhanced. The size difference has been gradually determined, and the DCE plans to control the size difference between futures and spot within 3% in the second half of 2025 [37]