Group 1: Report Industry Investment Rating - The investment view on the log industry is that it is expected to run strongly [3] Group 2: Core View of the Report - The fundamentals of the log market remain stable, and log futures are expected to run strongly due to low valuation, with the lowest delivery cost of log futures being 810 - 820 yuan/m³, while the supply shows a slight increase and the demand is neutral, and the inventory situation is also neutral [3] Group 3: Summary by Relevant Catalogs Part One: Main Views and Strategy Overview - **Supply**: In September 2025, New Zealand's expected log shipments to China, Japan, South Korea, and India were 1.766 million cubic meters, a month - on - month increase of 6.00%; the number of ships was 46, a month - on - month increase of 4.55%, which has a bearish impact on the market [3][27] - **Demand**: From October 6th to 12th, the average daily outbound volume of coniferous logs at 13 ports in 7 provinces in China was 57,300 cubic meters, a 12.65% decrease from the previous week. Due to the Sino - US trade war, there is an expected increase in the external market quotation of logs, and the demand is neutral [3] - **Inventory**: As of October 10th, the total domestic coniferous log inventory was 2.99 million cubic meters, a week - on - week increase of 4.55%, and the inventory situation is neutral [3][36] - **Valuation**: The current lowest delivery cost of log futures is 810 - 820 yuan/m³, with a low valuation, which is bullish for the market [3] - **Investment View**: The fundamentals remain stable, and log futures are expected to run strongly [3] - **Trading Strategy**: For arbitrage, a 11 - 1 positive spread is recommended, and attention should be paid to the domestic demand situation [3] Part Two: Review of Futures and Spot Market - **Futures Market**: Log futures fluctuated significantly. After a sharp decline, the futures price was lower than the lowest delivery cost, and the spot price was firm with the inventory not reaching the inflection point, so it is expected to run strongly. The log futures contract's total open interest was 21,452 lots as of October 17th, a 9.2% increase from the previous week, and the open interest of the main contract 2601 was 14,247 lots, an 89.5% increase from the previous week [6][12] - **Spot Market**: As of October 17th, the spot prices of radiata pine in Shandong and Jiangsu increased to varying degrees. In Shandong, the prices of 3.9 - meter small A/middle A/large A radiata pine were 710/760/880 yuan/m³; the prices of 5.9 - meter small A/middle A/large A radiata pine were 760/800/980 yuan/m³. In Jiangsu, the prices of 3.9 - meter small A/middle A/large A radiata pine were 720/780/820 yuan/m³; the prices of 5.9 - meter small A/middle A/large A radiata pine were 760/800/860 yuan/m³ [16] Part Three: Log Supply and Demand Fundamental Data - **Import Volume**: In August 2025, China's total coniferous log imports were 1.725 million cubic meters, a year - on - year decrease of 20.0% and a month - on - month decrease of 11.7%. Imports from New Zealand were 1.306 million cubic meters, with the year - on - year change turning from an increase to a decrease, a 6.5% decline, and a month - on - month decrease of 10.4%. Radiata pine imports were 1.297 million cubic meters, a year - on - year decrease of 4.3% and a month - on - month decrease of 7.2% [23] - **New Zealand's Log Shipment and Delivery**: In September 2025, New Zealand's expected log shipments to China, Japan, South Korea, and India were 1.766 million cubic meters, a month - on - month increase of 6.00%, and the number of ships was 46, a month - on - month increase of 4.55% [3][27] - **Domestic Log Inventory**: As of October 10th, the total domestic coniferous log inventory was 2.99 million cubic meters, a week - on - week increase of 4.55%. Radiata pine inventory was 2.46 million cubic meters, a week - on - week increase of 4.68%; North American timber inventory was 90,000 cubic meters, unchanged from the previous week; spruce/fir inventory was 190,000 cubic meters, a decrease of 10,000 cubic meters from the previous week. In terms of provinces, the total coniferous log inventory at Shandong ports was 1,892,000 cubic meters, a 6.65% increase from the previous week; the total coniferous log inventory at Jiangsu ports was 880,900 cubic meters, a 3.89% increase from the previous week [36] - **Domestic Log Outbound Volume**: From October 6th to 12th, the average daily outbound volume of coniferous logs at 13 ports in 7 provinces in China was 57,300 cubic meters, a 12.65% decrease from the previous week. The average daily outbound volume of coniferous logs at Shandong ports was 34,400 cubic meters, unchanged from the previous week, and that at Jiangsu ports was 17,900 cubic meters, a 31.94% decrease from the previous week [38] - **Wooden Square Data**: As of October 17th, the wooden square prices in Shandong and Jiangsu were both 1270 yuan/m³, unchanged from the previous week. The processing profit in Shandong was 16 yuan/m³, unchanged from the previous week, and that in Jiangsu was - 14.6 yuan/m³, also unchanged from the previous week [41]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View The report suggests that the log 11 contract will fluctuate in the range of 800 yuan/cubic meter. The current market shows a pattern of inverted domestic and foreign prices, with the high foreign - market quotes providing cost support while domestic inventory has been declining for multiple weeks. Although it is still the off - season for demand, the "Golden September and Silver October" peak season is approaching, and the contract price is undervalued. It is recommended to lay out long - term positions for the peak - season expectation when the price is low. In the short term, due to the pressure from the price difference between high foreign quotes and weak domestic spot prices, import enthusiasm is suppressed, and the daily inventory withdrawal at ports remains high, leading to marginal improvement in supply and demand. However, since the peak - season demand has not started yet, it is advisable to stay on the sidelines for now [6][22]. 3. Summary by Directory 3.1 Log 2511 Contract Trend Review No specific content for the contract trend review is provided in the report. 3.2 Fundamental Analysis - **Spot Prices**: The spot price of 3.9 - meter medium - grade A radiata pine logs in Shandong is 750 yuan/cubic meter, with a monthly increase of 20 yuan/cubic meter; in Jiangsu, the 4 - meter medium - grade A radiata pine log price is 780 yuan/cubic meter, also with a monthly increase of 20 yuan/cubic meter. The CFR price of 4 - meter medium - grade A radiata pine from New Zealand is 114 US dollars/JAS square, down 2 US dollars from last week, and the import profit has narrowed. The price of radiata pine logs at Rizhao Port has remained stable at 750 yuan/cubic meter, and the Jiangsu market price is 780 yuan/cubic meter, unchanged from last week, with a regional price difference of 30 yuan/cubic meter [10][13]. - **New Zealand Log Shipment Volume and Ship Number**: In July 2025, New Zealand is expected to ship 1.955 million cubic meters of logs, a month - on - month increase of 13.19%, and the number of ships is expected to be 47, a month - on - month decrease of 5 [15]. - **China's Log Inventory**: As of August 30, China's log inventory was 3.17 million cubic meters, a month - on - month decrease of 30,000 cubic meters. Shandong's log inventory was 1.95 million cubic meters, and Jiangsu's was 0.96 million cubic meters. In terms of classification, radiata pine inventory was 2.56 million cubic meters, spruce log inventory was 0.2 million cubic meters, and North American log inventory was 0.2 million cubic meters [18]. - **Log Out - of - Warehouse Volume**: As of August 31, the average daily out - of - warehouse volume of logs at 13 ports was 64,200 cubic meters, with a monthly average daily increase of 11,000 cubic meters. Among them, the average daily total out - of - warehouse volume at 3 ports in Shandong was 35,700 cubic meters, and at 3 ports in Jiangsu was 23,200 cubic meters [20]. 3.3 Trading Strategy Logic The recent spot market has shown a weak - to - stable trend. The supply side has fluctuated significantly, with the actual arrival volume in the week of September 12 reaching 470,000 cubic meters, a week - on - week increase of 246,000 cubic meters, but the expected arrival volume this week will drop significantly to about 215,000 cubic meters. The demand side has been stable, with the average daily shipment volume increasing to 62,900 cubic meters, a week - on - week increase of 17,000 cubic meters. There have been structural changes in inventory, with coniferous logs generally shifting to an inventory - building pattern, with a weekly inventory increase of 80,000 cubic meters. Among them, radiata pine inventory increased by 80,000 cubic meters, while North American log inventory decreased by 10,000 cubic meters. Regionally, the inventory at Shandong ports was 1.83 million cubic meters, an increase of 17,000 cubic meters, and at Jiangsu ports was 917,800 cubic meters, an increase of 2,400 cubic meters [22].