Group 1 - Report industry investment rating: Not provided Group 2 - The core view of the report: The Natural Resources Ministry has accepted the application for the change and renewal of the mining rights of the lithium mine in Jiangxi. The total inventory of lithium carbonate samples is 115,968 physical tons, a decrease of 2,452 tons compared to the previous week, and is lower than the level in early November. With the slowdown of inventory reduction, large mines are expected to resume production in the short term, and there is a risk of a sharp price drop after the next trading day opens. For customers holding inventory or long positions, it is recommended to buy out-of-the-money put options to form a protective put strategy to avoid the risk of a significant decline in lithium carbonate prices [1][2] Group 3 Summary of relevant catalogs - **Industry news**: The Natural Resources Ministry has accepted the application for the change and renewal of the mining rights of the lithium mine by Yichun Times New Energy Mining Co., Ltd. in Jiangxi [1] - **Inventory situation**: The total inventory of lithium carbonate samples is 115,968 physical tons, a decrease of 2,452 tons compared to the previous week, and is lower than the level in early November [1] - **Market expectation**: With the slowdown of inventory reduction, large mines are expected to resume production in the short term, and there is a risk of a sharp price drop after the next trading day opens [1] - **Investment strategy**: For customers holding inventory or long positions, it is recommended to buy out-of-the-money put options to form a protective put strategy to avoid the risk of a significant decline in lithium carbonate prices [2]

Core Viewpoint - The recent adjustment in the A-share market is attributed to a combination of internal and external factors, leading to a collective risk-averse behavior among funds [1][2]. Group 1: Market Adjustment Factors - The market adjustment is seen as a result of multiple factors, including concerns over the economic fundamentals and a complex external environment, alongside fluctuations in liquidity expectations for December [2]. - The tightening of overseas liquidity, particularly following the Federal Reserve's hawkish stance, has led to a net outflow of foreign capital, putting pressure on high-valuation technology sectors in A-shares [2]. - Defensive behaviors, such as institutions cashing in on floating profits as the year-end approaches, have contributed to short-term market volatility [2]. Group 2: Private Equity Strategies - Private equity firms have adopted varied strategies in response to the high market positions, with an average stock position of 81.13% among private equity firms, reaching a 112-week high [3]. - Some firms, like Zhiyu Zhi Shan, utilize risk hedging techniques, such as purchasing out-of-the-money put options to protect against extreme drawdowns [4]. - Others, like Yongjin Investment, have adjusted their portfolios to include cyclical stocks while maintaining a balanced approach to technology sectors [4]. Group 3: Long-term Market Outlook - Despite short-term challenges, private equity firms maintain confidence in the long-term market, actively seeking new investment opportunities during the adjustment [4][5]. - Firms like Dushuquan emphasize that the current market does not exhibit systemic bubbles, focusing on sectors with structural growth potential that can sustain performance without relying on overall economic recovery [5]. - The adjustment is viewed as a healthy correction within a long-term upward trend, helping to manage leverage levels and optimize market trading structures [5].

Group 1: Report's Investment Rating - No investment rating provided in the report Group 2: Core View - The current sentiment of urea has improved, but the reversal may not have arrived yet based on supply and demand. The current market is mainly driven by short - position holders taking profit. It is recommended to hold the previously sold out - of - the - money put options. The current urea valuation is at a relatively low level, reflecting the situation of strong supply and weak demand. If prices continue to fall, upstream production willingness may decline, accelerating enterprise clearance. In the short term, the upward driving force for urea is insufficient, with large supply and inventory pressure. The downstream is cautious about restocking at low prices. Future potential drivers include the renovation of old chemical industry equipment on the supply side and the issuance of new export quotas [1] Group 3: Summary by Directory Urea Futures Price - On October 29, compared with October 28, UR01 increased by 0.55% (9 yuan/ton), UR05 increased by 0.53% (9 yuan/ton), and UR09 increased by 0.63% (11 yuan/ton) [1] Domestic Spot Price - On October 29, compared with October 28, prices in Shandong, Henan, and Jiangsu decreased by 0.62%, 0.63%, and 0.63% respectively (10 yuan/ton each), prices in Shanxi decreased by 0.68% (10 yuan/ton), while prices in Hebei and Northeast remained unchanged [1] Basis and Spread - The basis of Shandong spot - UR decreased by 19 yuan/ton, and the spread of 01 - 05 remained unchanged [1] Upstream Cost - On October 29, compared with October 28, the price of anthracite coal in Shanxi increased by 5.68% (50 yuan/ton), while prices in Shandong and Henan remained unchanged [1] Downstream Price - On October 29, compared with October 28, prices of compound fertilizer (45%S) in Shandong and Henan, and prices of melamine in Shandong and Jiangsu remained unchanged [1] Important Information - The opening price of the main urea futures contract 2601 was 1638 yuan/ton, the highest price was 1652 yuan/ton, the lowest price was 1633 yuan/ton, the closing price was 1644 yuan/ton, and the settlement price was 1643 yuan/ton. The position of 2601 was 270,349 lots [1] Trading Strategy - Hold the sold out - of - the - money put options [1]

Group 1: Report Industry Investment Rating - No information provided Group 2: Report's Core View - The current sentiment of urea has improved, but the reversal may not have arrived from the supply - demand perspective. The current futures market is mainly driven by short - position holders taking profit. It is recommended to continue holding previously sold out - of - the - money put options. The current urea valuation is relatively low, reflecting the pattern of strong supply and weak demand. If prices continue to fall, it may lead to a further decline in upstream production willingness and accelerate the industry's self - clearing. In the short term, there is insufficient upward driving force for urea, and the subsequent possible driving factors are the old device renovation in the chemical industry on the supply side and the issuance of new export quotas [1] Group 3: Summary by Relevant Catalogs Urea Futures Prices - UR01 closed at 1640.00 yuan/ton on October 27, down 2.00 yuan (-0.12%) from October 24. UR05 closed at 1713.00 yuan/ton, down 6.00 yuan (-0.35%). UR09 closed at 1745.00 yuan/ton, down 3.00 yuan (-0.17%) [1] Domestic Spot Prices (Small Granules) - In Shandong, the price was 1610.00 yuan/ton on October 27, up 40.00 yuan (2.55%) from October 24. In Henan, it was 1590.00 yuan/ton, up 20.00 yuan (1.27%). In Hebei, it was 1630.00 yuan/ton, up 30.00 yuan (1.88%). In Jiangsu, it was 1610.00 yuan/ton, up 40.00 yuan (2.55%). Prices in Shanxi and Northeast remained unchanged [1] Basis and Spread - The basis of Shandong spot - UR was - 103.00 yuan/ton on October 27, up 46.00 yuan from October 24. The spread of 01 - 05 was - 73.00 yuan/ton, up 4.00 yuan [1] Upstream Costs - The anthracite coal prices in Henan and Shanxi remained unchanged at 1030.00 yuan/ton and 880.00 yuan/ton respectively [1] Downstream Prices - The prices of compound fertilizer (45%S) in Shandong and Henan remained unchanged at 2900.00 yuan/ton and 2500.00 yuan/ton respectively. The melamine price in Shandong was 5084.00 yuan/ton on October 27, up 34.00 yuan (0.67%) from October 24, while the price in Jiangsu remained unchanged [1] Important Information - The opening price of the urea futures main contract 2601 was 1647 yuan/ton, the highest price was 1655 yuan/ton, the lowest price was 1635 yuan/ton, and the closing price was 1640 yuan/ton with a settlement price of 1641 yuan/ton. The position volume was 281954 lots [1] Trading Strategy - Hold the sold out - of - the - money put options (Viewpoint score: 0) [1]

Core Viewpoint - The recent market volatility is driven by intense corrections in speculation, raising questions about whether the current supply-side policy-driven rally has ended or is merely a "backward catch" opportunity [3][8]. Policy Analysis - The government has emphasized the need to combat deflation through supply-side policies, such as halting the addition of excess capacity and promoting domestic consumption. The scope of supply rationalization measures has expanded to include metals, petrochemicals, and industries like lithium and coal, which have reported supply disruptions [3][9]. - Historical responses to deflation have varied, with the current situation being unique due to the predominance of advanced capacity and the fragmented industrial landscape, alongside high government debt limiting fiscal space [3][9][10]. Commodity-Specific Insights - Lithium prices have rebounded but remain below marginal cash costs of $11,500/ton, with approximately 45% of global capacity unable to cover cash costs at a price of $9,000/ton. This suggests limited downside potential for prices [4][13]. - Recent compliance checks in the lithium sector may lead to short-term supply disruptions, with around 20,000 tons of lithium capacity facing compliance risks, potentially resulting in significant inventory depletion and price rebounds [14]. - In the coal sector, production inspections are focused on preventing overproduction, with expectations of moderate impacts. However, recent price declines may limit further downside [5][15]. Agricultural Sector Developments - The hog farming industry is actively responding to regulatory controls by reducing breeding sow inventories and adjusting market weights, which may support near-term price stability and long-term valuation increases [6][16]. Market Trends and Expectations - The bond market reflects expectations of prolonged deflation, with government policies aimed at supply-side constraints potentially boosting industrial prices and improving upstream profits. This may reduce the urgency for monetary easing [6][17]. - The recent surge in government infrastructure investment, such as the $1.2 trillion Tibet dam project, has also contributed to supply concerns and influenced market dynamics [6][17].