Copper: On Tuesday evening, the Shanghai copper contract rebounded to 79,410 yuan, while the London copper price closed around $9,840. Macroeconomic outlook is neutral. The US unadjusted CPI for July remained flat at 2.7% year-on-year, below expectations and slightly cooling month-on-month. Core inflation rose to 3.1% year-on-year, exceeding expectations and the previous reading. US inflation is generally showing a mild downward trend. Trump is pressuring the Federal Reserve to cut interest rates, leading to a weakening US dollar and a slight rebound in copper prices. Fundamentals are neutral. Yesterday, copper warehouse receipts on the Shanghai Futures Exchange increased by 3,021 tons to 26,000 tons, while LME copper inventories decreased by 700 tons to 155,000 tons. Last Friday, the National Development and Reform Commission (NDRC) issued Document No. 770, a policy for attracting investment, considering the removal of subsidies for recycling enterprises. This puts recycled copper rod enterprises at risk of production suspension in September. Overall, recent domestic and international policy expectations have strengthened, boosting copper prices to maintain a high-mid range. However, end-user demand remains weak, and coupled with the continued uncertainty surrounding geopolitical conflicts and tariff pressures, there is a lack of catalysts for a market reversal. Copper prices are expected to remain range-bound in the short term. Focus on the future market's confirmation of policies to stabilize growth and a rebound in domestic demand. Today's Shanghai copper price range is 785,000-79,800 yuan/ton. Strategically, wait-and-see trading or trading within the range is recommended.


Stock Index Futures: In the previous trading day, the Shanghai Composite Index rose 0.50%, the Shenzhen Component Index rose 0.56%, the ChiNext Index rose 1.24%, the STAR Market 50 Index rose 1.91%, the CSI 300 Index rose 0.52%, the SSE 50 Index rose 0.61%, the CSI 500 Index rose 0.41%, and the CSI 1000 Index rose 0.28%. Trading volume for the two markets totaled 1,881.52 billion yuan, an increase of approximately 54.547 billion yuan from the previous trading day. Among the Shenwan Index's primary sectors, the best performers were communications (2.24%), electronics (1.88%), and coal (1.01%). The worst performers were defense and military (-1.03%), steel (-0.83%), and building materials (-0.46%). Regarding basis, all four major index futures saw slight strength. The annualized basis rates for the IH and IF quarterly contracts are 0.40% and -2.90%, respectively; while the annualized basis rates for the IC and IM quarterly contracts are -10.10% and -11.00%, respectively. For hedging purposes, quarterly and monthly contracts may be considered for short positions. The Shanghai and Shenzhen stock markets saw a volatile upward trend last trading day, with trading volume rebounding again. The previous trading day saw a high concentration of hot stocks, with the index rising but over half of the stocks declining, with the majority of gains concentrated in the technology and TMT sectors. From a market perspective, the index continues its upward trend, with trading volume steadily increasing. The resurgence in growth sectors and the Shanghai Composite Index approaching its previous high suggest the potential for a significant short-term breakout. If this breaks through, the index could accelerate its upward trajectory. The macroeconomic data released so far all show a steady recovery trend, with indicators such as imports and core CPI showing a strong upward momentum. In August, the semi-annual reports of listed companies will be disclosed one after another. The moderately loose monetary policy since September last year is expected to continue to reduce the short-term operating and financing costs of enterprises, and corporate profits are expected to pick up. The two-way recovery in profits and valuations may cause small and medium-sized stocks to perform better than the broader market. It is recommended to maintain long positions in IC and IM.

Stock Index Options: Last trading day, the Shanghai Composite Index rose 0.5%, the Shenzhen Component Index rose 0.53%, the ChiNext Index rose 1.24%, the STAR Market 50 Index rose 1.91%, the CSI 300 Index rose 0.52%, the SSE 50 Index rose 0.61%, the CSI 500 Index rose 0.41%, the CSI 1000 Index rose 0.28%, and the SZSE 100 ETF rose 0.72%. Trading volume for the two markets totaled 1,881.52 billion yuan, an increase of approximately 54.5 billion yuan from the previous trading day. Among the Shenwan First-Level Sectors, the best-performing sectors were communications (2.24%), electronics (1.88%), and coal (1.01%). The worst-performing sectors were building materials (-0.46%), steel (-0.83%), and defense (-1.03%). The stock market performance from late June to July was largely driven by a valuation correction driven by policies and liquidity. If fundamentals such as the macroeconomy and listed companies' earnings improve, there is ample room for upward movement. However, the realization of this fundamental logic may take time. In the long term, the market is likely to focus on a volatile upward trend, with a gradually rising center. In the medium term, covered call portfolios will continue to be the primary method for generating returns. In the short term, the recent significant gains have also increased the absolute risk in the stock market. With the Shanghai Composite Index nearing its range high, coupled with the tariff window and the upcoming release of July economic data and listed companies' semi-annual reports, it is appropriate to consider buying out-of-the-money put options as a risk management measure.

Treasury bond futures: Treasury bond futures fell on Tuesday. Unilaterally, based on closing prices, the 30-year bond futures contract fell 0.31%, the 10-year bond futures contract fell 0.04%, the 5-year bond futures contract remained unchanged, and the 2-year bond futures contract fell 0.02%. The yield on the most active 30-year bond rose 1.8 basis points to 1.974%, the yield on the most active 10-year bond futures contract rose 1 basis point to 1.7275%, and the yield on the most active 2-year bond futures contract rose 0.25 basis points to 1.4025%. Inter-product spreads for futures contracts: 4TS-T, 2TF-T, and 3T-TL futures contracts changed by -0.019 yuan, 0.035 yuan, and 0.235 yuan, respectively. Unilateral strategies: Futures contracts fell again, with long-term bonds seeing the largest decline. Anti-involutionary expectations remain the primary constraint, and July inflation data clearly shows signs of bottoming out. With CPI still far from its target, monetary policy will likely maintain an accommodative tone. We believe the medium- to long-term bull market for bonds remains intact, but rising inflation expectations may dampen bullish sentiment. We recommend a wait-and-see approach in the short term. A cross-product strategy: The interest rate curve is steep on the short side and flat on the long side. We await a cooling of inflation expectations before engaging in a short-term (TF)/long-term (TL) arbitrage strategy. Hedging strategies: Basis is neutral, and unilateral sentiment remains weak. We do not recommend any hedging strategies at this time.

Iron Ore: 1. From August 16th to 25th, independent steel rolling mills in Tangshan will be required to suspend production at any time, depending on weather conditions. Operations must be halted from August 25th to September 3rd. According to Mysteel research on the 9th, some independent section steel rolling mills have received notices to suspend or limit production. If implemented, the daily output of 35 slab steel mills in Tangshan will be affected by approximately 90,000 tons. 2. Last week, production of the five major steel varieties reached 8.6921 million tons, a weekly increase of 17,900 tons. Total inventory of the five major steel varieties reached 13.7536 million tons, a weekly increase of 234,700 tons. Weekly consumption of the five major steel varieties reached 8.4574 million tons, with building materials consumption increasing by 3.4% month-on-month and plate consumption decreasing by 2.8% month-on-month. 3. According to a Centennial Construction survey, as of August 5th, the capital availability rate at sample construction sites was 58.5%, a weekly decrease of 0.2 percentage points. Among them, the funding availability rate for housing construction projects was 51.14%, unchanged from the previous week. On August 12, ocean freight from Western Australia to China was $10.33/ton, down $0.13/ton; ocean freight from Brazil to China was $24.75/ton, down $0.03/ton. From August 4 to 10, 2025, Mysteel's global iron ore shipments totaled 30.467 million tons, a decrease of 151,000 tons from the previous month. Total iron ore shipments from Australia and Brazil were 25.303 million tons, a decrease of 19,000 tons from the previous month. From August 4 to 10, 2025, total arrivals at 47 Chinese ports totaled 25.716 million tons, a decrease of 508,000 tons month-over-month. Total arrivals at 45 Chinese ports totaled 23.819 million tons, a decrease of 1.259 million tons month-over-month. Total arrivals at the six northern ports totaled 12.030 million tons, a decrease of 501,000 tons month-over-month. Demand: On August 8, Mysteel surveyed 247 steel mills. The blast furnace operating rate was 83.75%, up 0.29 percentage points from the previous week and 3.54 percentage points year-over-year. Blast furnace ironmaking capacity utilization was 90.09%, down 0.15 percentage points from the previous week and up 3.07 percentage points year-over-year. Steel mill profitability was 68.4%, up 3.03 percentage points from the previous week and 63.21 percentage points year-over-year. Average daily hot metal output was 2.4032 million tons, down 3,900 tons from the previous week. Inventory: Mysteel statistics show that total imported iron ore inventories at 47 ports nationwide reached 142.6727 million tons on August 8th, a month-on-month increase of 452,600 tons. Daily port throughput reached 3.3645 million tons, an increase of 185,400 tons. Mysteel also reports that total imported iron ore inventories at steel mills nationwide reached 90.1334 million tons, a month-on-month increase of 12,500 tons. The current daily consumption of imported ore by sampled steel mills is 2.9814 million tons, a month-on-month decrease of 13,200 tons. Regarding the main industry logic, supply is likely to remain at low shipment and arrival levels in the near term, while demand remains resilient. Steel mill profit margins remain above 60%, and the latest data even suggests an upward trend. Daily molten iron production remains stable at around 2.4 million tons, while apparent demand from the five major downstream materials is declining, leading to continued inventory accumulation. Overall, molten iron prices remain high, and fundamentals are relatively healthy. Ore prices are expected to fluctuate. Keep an eye on the development of production restrictions and the recent trend of coking coal.

Shanghai Lead: Shanghai lead prices fluctuated and consolidated overnight. Fundamentally, on the supply side, some companies in Anhui Province have slightly reduced production, while other secondary lead plants are currently operating normally. Supply growth has not changed significantly. Recycling refineries are still operating at a loss, and there is little appetite for shipments. Short-term spot supply has not seen significant changes, leading to a wait-and-see market. Some downstream companies are negotiating purchases, resulting in relatively quiet trading. On the demand side, while expectations for a peak season persist, actual high prices are not ideal, and dealers are slow to clear inventory. Overall, we are currently in the transition period between peak and off-season, with short-term low-level fluctuations expected.

Shanghai Zinc: Overnight, Shanghai zinc prices fluctuated slightly. Macroeconomically, the US CPI for July was mild, and market expectations for interest rate cuts continued to rise, maintaining a generally positive macroeconomic sentiment. From a fundamental perspective, with regard to raw materials, the start-up of the Henan refinery is likely to boost market demand, leading to tightness at the mine level, or at least a pause in price increases. According to Baichuan Yingfu research, despite high July production, ingot production in August still saw month-on-month growth, signaling a gradual emergence of supply-demand imbalances. On the demand side, zinc ingot consumption remains in its traditional off-season, with downstream terminal operations remaining low. Currently, spot prices are trading at a discount in many locations, hindering downstream demand. Overall, macroeconomic sentiment has improved, but short-term spot market performance has been weak, holding back zinc prices.

Rubber: On Tuesday, domestic full latex was 14,800 yuan/ton, up 50 yuan/ton from the previous day; Thai No. 20 mixed rubber was 14,620 yuan/ton, up 40 yuan/ton from the previous day. Raw materials: Yesterday, Thai rubber closed at 54.0 baht/kg, unchanged from the previous day; Thai cup rubber closed at 49.3 baht/kg, up 0.65 baht/kg from the previous day; Yunnan rubber closed at 14.0 yuan/kg, unchanged from the previous day; Hainan rubber closed at 13.2 yuan/kg, up 0.1 yuan/kg from the previous day. As of August 10, 2025, the combined bonded and general trade inventories of natural rubber in Qingdao were 619,900 tons, a decrease of 11,900 tons, or 1.89%, from the previous period. Bonded area inventories reached 75,300 tons, a decrease of 0.24%; general trade inventories reached 544,600 tons, a decrease of 2.11%. The inbound rate of sample bonded warehouses in Qingdao decreased by 0.81 percentage points, while the outbound rate decreased by 0.93 percentage points. The inbound rate of general trade warehouses decreased by 0.38 percentage points, while the outbound rate increased by 0.25 percentage points. Viewpoint: Southeast Asian production areas such as Thailand and domestic production areas are still in the rainy season, and the incessant rain continues to impact rubber tapping operations. Côte d'Ivoire has entered the dry season with less rain, and rubber tapping is expected to be relatively normal. Weather conditions in global production areas have not changed significantly beyond expectations and remain in line with seasonal conditions. On the demand side, production activity in the domestic tire industry has remained relatively stable, with all-steel tire companies showing relatively better performance. A limited recovery in downstream industries is expected. The balance sheet is improving, and expectations are being met. With the improvement in short-term market expectations, RU and NR are rebounding. Looking ahead, since China's market demand accounts for approximately 20-25% of global demand, the improvement in the overall balance will be relatively small, and the rebound is expected to be limited.

Rebar: The announcement of production restrictions in Tangshan, coupled with the continued upward trend in coke and molten iron futures, has kept rebar hot-rolled coil (HCR) futures prices elevated. While supply is unlikely to be significantly impacted in the short term, market sentiment remains positive, with trading volumes gradually improving. Last week, rebar production increased by 101,200 tons month-over-month, while social rebar inventories increased by 43,400 tons. Mill inventories accumulated by 60,500 tons, and apparent demand increased by 73,800 tons to 2.1079 million tons. Supply and demand imbalances are beginning to emerge for construction steel. However, the positive factors include the anticipated disruption from production restrictions and the resilience of cost support from the strength of coke and molten iron. In the short term, construction steel prices are likely to fluctuate and strengthen.

Hot-Rolled Coil (HRC): On the industry front, data from China Steel Union shows that HRC production decreased by 79,000 tons last week, with accumulated inventory reaching 86,800 tons. Apparent demand fell by 137,900 tons to 3,062,100 tons. Currently, HRC fundamentals continue to weaken amidst a weak supply and demand environment, with inventories increasing at a faster pace. This weak reality continues to weigh on HRC prices, but ongoing production restrictions present downward pressure. We anticipate continued wide fluctuations in HRC prices, with attention being paid to steel mill production conditions. Strategically, the 2510 rebar contract is targeted at the 3150-3300 price range, while the 2510 HRC contract is targeted at the 3350-3500 price range.

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