Rebar: Macroeconomic sentiment is positive, and the next window for economic policy negotiation will be the Central Economic Work Conference in December. Industry-wide, rebar production increased by 59,100 tons to 2.0707 million tons last week, while social inventories decreased by 189,300 tons to 4.3748 million tons. Factory inventories decreased by 1,000 tons to 1.8463 million tons, reflecting a 62,600-ton increase in apparent demand compared to the previous week. Rebar demand is rebounding seasonally, while supply is also increasing. Despite the dual supply and demand situation, fundamentals are improving only slightly, and inventory reduction pressure remains. The relatively positive factor is cost support, and the market is expected to remain volatile.


Hot-rolled Coil (HCC): Last week, HRC production increased by 6,200 tons, while inventories decreased by 42,700 tons. Apparent demand rebounded by 111,800 tons to 3,267,300 tons. Short-term supply and demand pressures remain high, with peak season inventory reduction falling short of expectations. Demand performance remains acceptable, but concerns remain. A substantial improvement in basic fabrics is unlikely. Cost support is a relatively positive factor, and future trends are expected to remain volatile and positive. Strategically, the short-term trading range for rebar 2601 is 3,050-3,200 yuan/ton; the trading range for HRC 2601 contracts is 3,200-3,400 yuan/ton.

Polysilicon: Yesterday's strong rebound in polysilicon futures may be a correction of previous pessimism. Against the backdrop of a subdued spot market, the progress of anti-involutionary measures remains a concern. Fundamentally, polysilicon production is expected to decrease slightly in November, potentially restoring the supply-demand balance. Meanwhile, silicon material manufacturers are maintaining price support, with marginal changes in fundamentals minimal. Overall, while the short-term supply-demand imbalance remains, there are expectations for improvement, and cost support remains robust. Given policy expectations, it's unlikely that spot prices will fall. Continue to monitor for opportunities to buy on dips amidst anti-involutionary policies. PS2601 is expected to trade between 50,000 and 58,000 yuan/ton. Operationally, buy on dips.

Methanol: Spot prices are priced at 2020 in Daqi and 2120 in Luoyang. Upstream factory auctions are proceeding smoothly, downstream purchases are active, and low-priced sources are seeing strong sales. In the short term, spot coal prices are approaching the winter storage window, and the raw material market is expected to provide some support. Upstream methanol production areas, affected by transportation conditions during the winter, tend to maintain low inventories, and shipping willingness is relatively strong. A new long-term contract cycle has begun, and traders have abundant supply. Freight rates have remained high and volatile recently, making return trucks difficult to find. Terminal profits remain low, and some MTO (manufacturer-to-transport) companies anticipate a reduction in losses. On Monday, the spot basis in East China was between 01-50, and below 10, it was between 01-45, continuing to weaken. In the short term, high port inventory levels will continue to weaken, and MTO profits are expected to recover somewhat, leading to a strong bull-bear game. In the medium and long term, focus will be on Middle Eastern weather, Southwest gas prices, and environmental protection policies in production areas. In terms of trading, methanol prices are expected to fluctuate widely in the short term, so wait-and-see is the prevailing strategy. The reference range for Methanol 2601 is 2200-2330 yuan/ton.

Urea: Spot prices are 1,540 yuan/ton ex-factory in Shandong and 1,530-1,540 yuan/ton ex-factory in Henan. The domestic urea market is primarily volatile, with downstream resistance to rising prices. On the supply side, weekly urea production has retreated to 180,000 tons, but is expected to rise to 200,000 tons this week following the return of large-scale production plants. With the end of rains and the start of autumn harvest, wheat planting is expected to begin, stimulating agricultural demand. However, new orders for industrial demand are progressing slowly. Overall, upstream demand remains supportive, and the imbalance between urea supply and demand remains unresolved. A significant upward move in futures prices could lead to profit-taking, resulting in short-term volatility and pressure. In the medium and long term, focus is on export quotas and winter stockpiling. Regarding short-term urea market volatility, the reference range for urea 2601 is 1,580-1,680 yuan/ton.

Shanghai Lead: Shanghai lead prices fluctuated weakly overnight. Fundamentally, on the supply side, primary production capacity saw limited short-term gains, with primary factory inventories, as measured by Shanghai nonferrous metals, bottoming out. On the recycling side, rising lead prices have boosted refinery profits, but production in Anhui and other regions has been slow to recover due to limited scrap battery supplies. With the opening of the import window, some crude lead may flow in. On the consumer side, finished lead battery inventories remain relatively high compared to the past five years, but production capacity at major downstream manufacturers has recently increased slightly. In the spot market, pre-sales for future supply have already begun in Hunan, Henan, and other regions, pushing finished product inventories to bottom out. Regarding warehouse receipts, the short-term price rally has significantly strengthened the willingness to deliver warehouses. Warehouse receipts remained flat month-on-month yesterday, indicating market pressure. Overall, the fundamental tight spot supply situation is unlikely to ease for now, but delivery pressure remains, keeping lead prices volatile at a high level.

Shanghai Zinc: Overnight, Shanghai zinc prices fluctuated strongly. Macroeconomically, market expectations of interest rate cuts, coupled with the ongoing important domestic meetings, have boosted sentiment. Fundamentally, with northern mines about to shut down for winter storage, domestic ore prices (TCs) continue to decline. Currently, ex-factory prices in regions like Henan are approaching 3,000 yuan. On the supply side, several major mills in Henan and Jiangxi continue maintenance this week, with some domestic refineries expected to resume production later, increasing overall supply this month. On the demand side, galvanized and end-user demand is generally subdued. The export window is currently open, with supplies already available for export to Southeast Asia and overseas delivery. Yesterday, social inventories saw a slight increase, and spot prices performed well. Overall, macroeconomic sentiment remains positive, and supported by current fundamentals, zinc prices are expected to fluctuate at a high level.

Stock Index Futures: In the previous trading day, the Shanghai Composite Index rose 1.18%, the Shenzhen Component Index rose 1.51%, the ChiNext Index rose 1.98%, the STAR Market 50 Index rose 1.50%, the CSI 300 Index rose 1.19%, the SSE 50 Index rose 0.78%, the CSI 500 Index rose 1.67%, and the CSI 1000 Index rose 1.03%. Trading volume for the two markets totaled 2.340132 trillion yuan, an increase of approximately 365.922 billion yuan from the previous trading day. Among the Shenwan First-Level Sectors, the best-performing sectors were Communications (3.22%), Electronics (2.96%), and Comprehensive (2.68%). The worst-performing sectors were Media (-0.95%), Food & Beverage (-0.20%), and Real Estate (-0.11%). Regarding basis, the basis of all four major index futures weakened slightly. The annualized basis rates for the quarterly IH and IF contracts are 0.00% and -3.20%, respectively; while the annualized basis rates for the quarterly IC and IM contracts are -10.10% and -13.10%, respectively. For hedging purposes, quarterly and monthly contracts may be considered for short positions. Last trading day, both the Shanghai and Shenzhen stock markets opened higher and continued to rise, with trading volume increasing significantly compared to the previous day, reaching over 2 trillion yuan again after a seven-day hiatus. Looking at the performance of primary industries, previously popular sectors such as communications and electronics continued to rise, contributing to a broad market rally. Only three of the 31 primary industry indices declined, and the Shanghai Composite Index hit a near-decade high yesterday. Over the weekend, the fifth round of Sino-US trade negotiations concluded tentatively in Malaysia. US Treasury Secretary Benson & Shaw stated that additional tariffs would not be imposed at 100%. This increased certainty in the external trade environment may have boosted the index's strong upward movement yesterday, potentially indicating a significant recovery in market sentiment and risk appetite. The recent release of the next phase of the economic work plan, which outlines future plans for several high-tech sectors, may provide an initial boost to the market. The recent strong performance of the Technology Growth Index has also been evident. Furthermore, the expansion in industrial enterprise profit growth in September may provide strong support for the subsequent market. We recommend maintaining long positions in IC and IM stocks.

Treasury bond futures rose on Monday. Based on closing prices, the 30-year bond futures contract rose 0.32%, the 10-year contract rose 0.15%, the 5-year contract rose 0.12%, and the 2-year contract rose 0.05%. The yield on the most active 30-year bond fell 5.75 basis points to 2.155%, the yield on the most active 10-year bond fell 5 basis points to 1.795%, and the yield on the most active 2-year bond fell 4 basis points to 1.45%. Inter-product spreads for futures contracts: 4TS-T, 2TF-T, and 3T-TL changed by 0.056 yuan, 0.1 yuan, and 0.11 yuan, respectively.

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