Precious Metals: US PPI data for July significantly exceeded expectations, rising to 3.3% year-on-year, far exceeding expectations of 2.5% and up 0.9% month-on-month. The core PPI rose 3.7% year-on-year, surpassing expectations of only 3%. This quickly dampened expectations of a Fed rate cut, leading to a rise in the US dollar and US Treasury yields, and pressure on precious metals. Fed officials have been speaking out intensively, with some remaining cautious about rate cuts, while others have supported a larger reduction, signaling growing divisions within the Fed. Overall, expectations of a Fed rate cut are expected to fluctuate significantly in the short term, leading to wide fluctuations in precious metals prices. With the upcoming meeting between US and Russian leaders, key attention will be paid to whether the two sides reach an agreement. In terms of trading, partially take profits on long positions and prioritize risk management. The reference range for Shanghai Gold 2510 is 760-800 yuan/gram, and the reference range for Shanghai Silver 2510 is 9000-9400 yuan/kilogram.


Stock Index Futures: In the previous trading day, the Shanghai Composite Index fell 0.46%, the Shenzhen Component Index fell 0.87%, the ChiNext Index fell 1.08%, the STAR Market 50 Index rose 0.75%, the CSI 300 Index fell 0.08%, the SSE 50 Index rose 0.59%, the CSI 500 Index fell 1.20%, and the CSI 1000 Index fell 1.24%. Trading volume for the two markets totaled 2.279209 trillion yuan, an increase of approximately 128.272 trillion yuan from the previous trading day. Among the Shenwan first-level sectors, the best-performing sectors were non-bank financials (0.59%), banks (-0.02%), and food and beverages (-0.16%). The worst-performing sectors were general merchandise (-2.66%), defense and military (-2.15%), and communications (-2.12%). Regarding basis, IC and IM basis strengthened slightly, while IH and IF basis weakened slightly. The annualized basis rates for the IH and IF quarterly contracts are 0.00% and -2.40%, respectively; while the annualized basis rates for the IC and IM quarterly contracts are -8.40% and -9.20%, respectively. For hedging purposes, quarterly and monthly contracts may be considered for short positions. The Shanghai and Shenzhen stock markets experienced a volatile downward trend last trading day. Trading volume in both markets continued to increase after exceeding 2 trillion yuan, and market sentiment has rapidly strengthened. The Shanghai Composite Index lost and then reclaimed the 3,700 point mark last trading day. With the exception of financial sectors such as non-bank financials and banks, which performed relatively well, all other sectors saw some decline. Yesterday's moderate decline in both markets may be a temporary correction after the previous period's significant gains, potentially reflecting short-term market performance. Further increases in trading volume may provide strong support for future trends. In August, the interim 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 prompt 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 fell 0.46%, the Shenzhen Component Index fell 0.87%, the ChiNext Index fell 1.08%, the STAR Market 50 Index rose 0.75%, the CSI 300 Index fell 0.08%, the SSE 50 Index rose 0.59%, the CSI 500 Index fell 1.2%, the CSI 1000 Index fell 1.24%, and the SZSE 100 ETF fell 0.7%. Trading volume for the two markets totaled 2.279209 trillion yuan, an increase of approximately 128.2 billion yuan from the previous trading day. Among the Shenwan First-Level Sectors, the best-performing sectors were non-bank financials (0.59%), banks (-0.02%), and food and beverages (-0.16%). The worst-performing sectors were communications (-2.12%), defense and military (-2.15%), and general (-2.66%). Since July, the stock market's performance has largely been 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 experience 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 and listed companies' semi-annual reports approaching, it is advisable to consider buying out-of-the-money put options as a risk management measure.

Treasury bond futures: On Thursday, Treasury bond futures fell again. Based on closing prices, the 30-year bond futures contract fell 0.36%, the 10-year contract fell 0.12%, the 5-year contract fell 0.08%, and the 2-year contract fell 0.02%. The yield on the most active 30-year bond rose 1.3 basis points to 1.978%, the yield on the most active 10-year bond rose 1.2 basis points to 1.732%, and the yield on the most active 2-year bond rose 0.5 basis points to 1.4%. Regarding inter-product spreads, the 4TS-T, 2TF-T, and 3T-TL futures contracts changed by 0.047 yuan, -0.035 yuan, and 0.025 yuan, respectively. Unilateral Strategy: Amidst a weakening equity market, bond futures opened high and fell, but overall, there is no sign of a bottom. Social financing stock continued its year-on-year recovery in July, with both M1 and M2 exceeding expectations. Financial data is generally bearish for the bond market. The short-term market faces slight headwinds and subdued sentiment. We recommend a wait-and-see approach, awaiting clear signs of a rebound. Cross-product strategies: The interest rate curve is short-steep and long-flat. Wait for inflation expectations to cool before engaging in a short-term (TF)/long-term (TL) arbitrage strategy. Hedging strategies: Basis is neutral, and unilateral sentiment remains weak. No recommendations are currently available.

Industrial silicon futures are fluctuating weakly, with market transactions declining and spot market quotes temporarily stable. Fundamentally, with industrial silicon production profits recovering, new production has recently started in both the north and south, increasing supply. On the demand side, polysilicon production is increasing, and previously suspended organosilicon production capacity has resumed. In the short term, the market is showing a situation of both supply and demand growth. Overall, the impact of macroeconomic sentiment remains, but its impact is gradually decreasing. Fundamental changes may regain their dominant influence on the market, and the market outlook remains subject to some pressure. In terms of short-term trading, a light short position is recommended, with the SI2511 contract trading range at 8,200-8,800 yuan/ton.

Rubber: On Thursday, domestic full latex was 14,650 yuan/ton, down 150 yuan/ton from the previous day; Thai No. 20 mixed rubber was 14,420 yuan/ton, down 180 yuan/ton from the previous day. Raw materials: Yesterday, Thai rubber closed at 54.2 baht/kg, unchanged from the previous day; Thai cup rubber closed at 49.8 baht/kg, unchanged from the previous day; Yunnan rubber closed at 14.2 yuan/kg, unchanged from the previous day; Hainan rubber closed at 13.3 yuan/kg, unchanged from the previous day. As of August 10, 2025, China's natural rubber social inventory was 1.278 million tons, down 11,000 tons (0.85%) from the previous day. China's total dark rubber social inventory was 797,000 tons, down 0.8% from the previous day. Spot inventory in Qingdao decreased by 1.9%, while that in Yunnan increased by 1%. Vietnamese 10# rubber inventory increased by 4.8%, and NR inventory subtotal increased by 7.6%. China's total light-colored rubber social inventory reached 480,000 tons, a 0.8% decrease month-over-month. Of this, old full-latex rubber decreased by 2.6%, 3L rubber increased by 1.5%, and RU inventory subtotal increased by 1%. 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 tapping operations. Côte d'Ivoire has entered the dry season with less rain, and 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 performing relatively well. A limited recovery in downstream industries is expected. The balance sheet is improving, and expectations are being met. With short-term market expectations rebounding, RU and NR prices 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.

Iron Ore: 1. The Dalian Commodity Exchange adjusted the trading limits and handling fee standards for the JM2601 coking coal futures contract. Effective August 15, 2025, non-futures company members or clients will be limited to opening no more than 1,000 contracts per day in the JM2601 coking coal futures contract. Effective August 18, the handling fee for speculative day trades will be increased to 0.02% of the transaction value. 2. This week, supply of the five major steel varieties reached 8.7163 million tons, a week-on-week increase of 24,200 tons, or 0.3%. Total inventories reached 14.1597 million tons, a week-on-week increase of 406,100 tons, or 2.95%. Weekly consumption was 8.3102 million tons, a decrease of 1.7%. 3. On August 14, ocean freight from Western Australia to China was $10.37/ton, up $0.13/ton; ocean freight from Brazil to China was $24.93/ton, up $0.14/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 totaled 25.303 million tons, a decrease of 19,000 tons from the previous month. From August 4 to 10, 2025, total iron ore arrivals at 47 Chinese ports totaled 25.716 million tons, a decrease of 508,000 tons from the previous month. Total arrivals at 45 Chinese ports totaled 23.819 million tons, a decrease of 1.259 million tons from the previous month. Total arrivals at the six northern ports totaled 12.030 million tons, a decrease of 501,000 tons from the previous month. On August 8th, Mysteel surveyed 247 steel mills and found that the blast furnace operating rate was 83.75%, an increase of 0.29 percentage points from the previous week and 3.54 percentage points year-on-year. Blast furnace ironmaking capacity utilization was 90.09%, a decrease of 0.15 percentage points from the previous week and an increase of 3.07 percentage points year-on-year. Steel mill profitability was 68.4%, an increase of 3.03 percentage points from the previous week and 63.21 percentage points year-on-year. Average daily molten iron output was 2.4032 million tons, a decrease of 3,900 tons from the previous week. Inventory: On August 8th, Mysteel statistics showed that total imported iron ore inventories at 47 ports nationwide were 142.6727 million tons, an increase of 452,600 tons from the previous week. Average daily port throughput was 3.3645 million tons, an increase of 185,400 tons. Mysteel statistics show that total imported iron ore inventories at steel mills nationwide stand at 90.1334 million tons, a month-on-month increase of 12,500 tons. The current daily consumption of imported ore at 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 low in the near term, with shipments and arrivals likely to remain low. Demand remains resilient, with steel mill profit margins remaining above 60%, and the latest data even suggesting an upward trend. Average daily hot metal production remains stable at around 2.4 million tons, while apparent demand for the five major downstream materials is declining, leading to continued inventory accumulation. Overall, hot metal prices remain high, but downstream demand remains uncertain. Ore prices are expected to fluctuate and remain weak. Watch for developments in production restrictions. The strategic iron ore 2601 contract is trading between 760 and 800 yuan.

Rebar: This week, rebar production fell slightly by 7,300 tons to 2.2045 million tons, while apparent demand plummeted by 208,500 tons to 1.8994 million tons. Factory inventories increased for the second consecutive week, and social inventories increased for the fifth consecutive week, suggesting a bearish outlook. In the short term, rebar production declined slightly due to profit constraints. Furthermore, last week's continued hot and rainy season led to weak demand and a rebound in inventories, exacerbating the fundamental supply-demand imbalance. The supply-demand imbalance for construction steel continues to manifest, with coke prices surging and then declining on the cost side. Construction steel prices may fluctuate and weaken in the short term.

Hot-rolled Coil (HRC): This week, HRC production increased slightly by 7,000 tons to 3.1559 million tons. Steel mill inventories accumulated by 21,000 tons, while public inventories decreased by 12,600 tons, resulting in a total inventory accumulation. Currently, spot market demand remains moderate, with downstream buyers maintaining demand for essential goods but remaining weak, while speculative demand remains acceptable. Traders face limited inventory pressure, with some traders willing to purchase at low prices. Low-price transactions are thriving, while high-price transactions are largely absent. With coke prices surging and then declining, HRC prices may fluctuate and remain weak in the short term.

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