[SMM Tin Brief Commentary: SHFE Tin Stopped Falling and Rebounded, Closing Up 2.94% as Macro Pressure and Bottom Support Vied Against Each Other]

[SMM Tin Morning Briefing: The Most-Traded SHFE Tin Contract Opened Sharply Higher in the Night Session and Then Rebounded in Volatile Trading, While the Spot Market Will Gradually Cool Down]

As expectations for the peak-season demand in the “Golden March” gradually begin to materialize, galvanizing operating rates are rising. Can downstream consumption sustain its peak-season performance going forward?

SMM News: Following our previous analysis of the transportation and wind power sectors, this installment shifts focus to the critical demand drivers in the consumer and construction domains: White Goods , Consumer Electronics , and Real Estate-related applications (Elevators and Power Tools). While these sectors individually consume less magnetic material per unit compared to New Energy Vehicles (NEVs), their sheer aggregate volume makes them indispensable pillars of the Neodymium-Praseodymium (Pr-Nd) market. However, data from early 2026 reveals a troubling trend of stagnation and structural contraction across these traditional strongholds. I. White Goods: The Dual Pressure of Production Slumps and Material Substitution In the white goods sector, Neodymium-Iron-Boron (NdFeB) magnets are primarily utilized in two key applications: compressors for inverter air conditioners and motors for drum and impeller washing machines . 1. Air Conditioners: A Sharp Contraction in Output and Dosage According to data from the National Bureau of Statistics (NBS), China’s cumulative air conditioner production for January-February 2026 stood at 40.118 million units , a staggering 35% year-on-year (YoY) decline compared to the 61.921 million units produced in the same period of 2025. (Reason: This drastic drop is attributed to a combination of factors: firstly, an unusually mild winter across major consumption regions significantly dampened heating demand, leading to a destocking cycle among distributors. Secondly, the real estate sector’s continued downturn has severely curtailed new housing completions, directly reducing the installation of centralized and split AC systems. Lastly, high inventory levels carried over from 2025 forced manufacturers to aggressively cut production schedules in Q1 2026 to avoid capital lock-up.) Looking at the full year, SMM forecasts a marginal growth of 0.96% for 2026, with total annual production projected at 271.095 million units . (Reason: The near-flat growth outlook reflects a mature market saturation where replacement demand, rather than new installations, drives volume. While export markets offer some resilience against domestic weakness, rising trade barriers and logistical costs in key regions like Europe and North America are expected to cap significant expansion.) Applying SMM’s calculation model: Inverter Penetration: 99% NdFeB Motor Penetration: 92% Specific Consumption: Assumed at 100g/unit for 2026. Based on these parameters, the total NdFeB consumption for the air conditioner sector in 2026 is estimated at 24,691 tons , representing a 23% decrease from the 29,163 tons consumed in 2025. The core driver of this decline is twofold: first, the persistently high prices of Pr-Nd since the second half of 2025 have accelerated the industry’s cost-reduction initiatives. Second, there is a clear technological shift towards minimizing rare earth usage. The average single-unit dosage has dropped from 120g/unit in 2025 to 100g/unit in 2026 , as manufacturers optimize motor designs and, in some lower-end models, substitute with ferrite magnets or induction motor technologies where efficiency standards allow. 2. Washing Machines: A Slow Erosion of Demand For January-February 2026, China’s cumulative washing machine production was 18.58 million units , a slight 0.3% YoY decline from the 18.51 million units in the same period of 2025. (Reason: The stability in production volumes masks underlying weakness. The slight dip is primarily due to weak consumer confidence impacting discretionary spending on home appliance upgrades. Furthermore, the export market for washing machines has faced headwinds from sluggish global economic growth and intensified competition from Southeast Asian manufacturing hubs, offsetting modest domestic recovery efforts.) SMM projects a full-year growth rate of 3.1% for 2026. (Reason: This modest recovery is underpinned by government-led "trade-in" subsidy policies aimed at boosting domestic consumption of energy-efficient appliances. Additionally, product innovation in the high-end segment, such as washer-dryer combos and smart features, is expected to stimulate some replacement demand, though the overall ceiling remains low.) Demand Calculation Logic: Drum Washer Penetration: 63% (High-end, 98% use NdFeB) Impeller Washer Penetration: 28% (Mid-range, 50% use NdFeB) Specific Consumption: 290g/unit for drum washers; 240g/unit for impeller washers. Under this model, the total NdFeB demand for washing machines in 2026 is estimated at 27,204.52 tons , a 0.2% decrease from 27,262 tons in 2025. The sector is experiencing a slow but steady erosion of demand. While high-end drum washers rely heavily on efficient NdFeB motors to meet stringent energy labels, the volatility of rare earth prices is prompting manufacturers to cautiously explore alternative motor designs or reduce magnet grades in non-critical applications. Consequently, the industry has adopted a strategy of gradual reduction rather than abrupt substitution, balancing performance requirements with cost control. Outlook: The trajectory for white goods in 2026 is undeniably pessimistic. Both production volumes and technical intensity (dosage per unit) are trending downward, creating a double drag on Pr-Nd demand. II. Consumer Electronics: Volume Resilience vs. Intensity Decline The consumer electronics sector, modeled by SMM, comprises four main segments: Mobile Phones , Tablets , Desktops/Laptops , and Smartwatches . These devices utilize NdFeB primarily for acoustic components (speakers/receivers) and haptic feedback motors, with emerging uses in magnetic charging interfaces. The specific consumption is generally low, ranging from 2-5g/unit , except for desktops which average 15g/unit . Market Performance (Jan-Feb 2026): Mobile Phones: 220 million units (+6.8% YoY). Micro-computer Equipment: 41.956 million units (-31% YoY). Breakdown: 21% Tablets, 27% Desktops, 52% Laptops. Smartwatches: 8.196 million units (+7.8% YoY). (Reason: The divergence in performance is stark. Mobile phone growth is driven by the global rollout of AI-enabled handsets and the replacement cycle for 5G devices, particularly in emerging markets. Conversely, the sharp collapse in micro-computer equipment reflects the post-pandemic normalization of demand; the massive stockpiling of devices during 2020-2022 has led to a prolonged digestion phase. Additionally, extended device lifespans due to improved hardware durability have further suppressed replacement rates for PCs and tablets.) 2026 Full-Year Forecast: SMM anticipates a 1% growth for mobile phones and micro-computers combined, and a 5% growth for smartwatches. (Reason: The muted outlook for computing devices stems from persistent macroeconomic uncertainty and corporate IT budget tightening. For smartwatches, growth is fueled by increasing health-monitoring capabilities and deeper ecosystem integration with smartphones. However, the entire sector faces a cloud of uncertainty due to escalating geopolitical tensions affecting supply chains and rising memory chip prices, which may force OEMs to revise production targets downward later in the year.) Demand Estimation: Mobile Phones: 3,109.8 tons Micro-computers: 2,018.9 tons Smartwatches: 125.06 tons Total 2026 Demand: 5,253.76 tons , a 3% decline from 5,421.19 tons in 2025. The primary driver for this decline is the continuous, albeit slow, reduction in specific consumption. As miniaturization advances and alternative magnetic materials improve, the amount of NdFeB required per device is shrinking. Despite the relatively low single-unit dosage, the massive scale of the consumer electronics industry ensures it remains a significant consumer of NdFeB. Moreover, this sector is characterized by highly standardized supply chains, where major OEMs maintain binding agreements with certified magnet suppliers, making demand relatively stable but resistant to price-driven spikes. III. Real Estate Related: Elevators and Power Tools The final segment covers industries tightly coupled with the real estate cycle: Elevators and Handheld Power Tools . 1. Elevators: Policy Support vs. Structural Headwinds In January-February 2026, elevator production reached 150,000 units , a 7.1% YoY increase . (Reason: This short-term surge is largely attributable to the acceleration of projects that were delayed in late 2025, as developers rushed to meet pre-delivery deadlines before stricter regulatory inspections took effect. Additionally, government mandates for retrofitting old residential communities with elevators in urban renewal zones provided a temporary boost to order books.) However, SMM forecasts a full-year contraction of -3% for 2026. (Reason: The long-term outlook is grim due to the fundamental slowdown in new residential construction starts, which remain at multi-year lows. The debt crisis plaguing major property developers continues to stall new project launches, directly impacting the demand for new elevator installations. While the retrofit market offers some support, it is insufficient to offset the collapse in new building commissions.) Calculation: Energy-saving Elevator Penetration: 90% Specific Consumption: 6 kg/unit (for energy-saving models). Total 2026 Demand: 7,222.6 tons , a 1.3% increase from 7,125.3 tons in 2025. (Reason for Growth: The slight increase in total tonnage despite falling production volumes is entirely driven by the rising penetration of energy-saving elevators. Stricter national energy efficiency standards (GB standards) are forcing manufacturers to adopt permanent magnet synchronous motors (PMSM) over traditional asynchronous motors, thereby increasing the average NdFeB dosage per unit even as the total number of units declines.) 2. Handheld Power Tools: A Direct Casualty of Property Slump Production of handheld power tools in Jan-Feb 2026 was 29.566 million units , down 0.24% YoY . SMM projects a -3% decline for the full year 2026. (Reason: The downturn is inextricably linked to the stagnation in the global and domestic real estate markets. Reduced renovation activities and a slowdown in infrastructure projects have dampened demand for professional-grade tools. Furthermore, high inventory levels in distribution channels across North America and Europe, resulting from over-ordering in 2024, have led to a prolonged period of destocking.) Definition & Scope: According to the National Bureau of Statistics, handheld electric tools refer to portable motor-driven tools operated by hand, including electric drills, grinders, sanders, saws, and screwdrivers . These products are highly sensitive to housing turnover and renovation rates. Demand Calculation: NdFeB Penetration: 60% Specific Consumption: 80g/unit Total 2026 Demand: 9,134 tons , a sharp 13.4% drop from 10,548 tons in 2025. The significant contraction in this sector underscores the deep correlation between the property market and industrial metal demand. As the real estate sector remains in a prolonged adjustment phase, the downstream demand for power tools—and consequently NdFeB—faces sustained pressure. Conclusion The analysis of white goods, consumer electronics, and real estate-related sectors paints a picture of structural weakness for 2026. While niche policy drivers (like energy-saving elevator mandates) provide isolated pockets of growth, the overarching trends are defined by production saturation, inventory destocking, and aggressive material substitution . The combined effect of lower production volumes and reduced single-unit dosages creates a formidable headwind for Pr-Nd prices. In the final installment of this series, we will pivot to the future: examining the burgeoning demand from Low-Altitude Economy (eVTOLs), Robotics (Industrial and Service), and the relentless expansion of Electric Two-Wheelers . These emerging sectors may hold the key to offsetting the declines observed in traditional industries and reshaping the long-term demand curve for rare earth magnets.

SMM News: As of March 20, 2026, the market price for Praseodymium-Neodymium (Pr-Nd) metal in China stabilized temporarily at 890,000–910,000 RMB/ton. This article utilizes the SMM Pr-Nd Terminal Demand Calculation Model to dissect the demand logic for 2026 across three core sectors—New Energy Vehicles (NEVs), Internal Combustion Engine (ICE) vehicles, and Wind Power—explaining the current supply-demand dilemma facing the NdFeB magnet and broader Pr-Nd markets.

Based on current production conditions and in line with prevailing market demand, mainstream steel mills in Fujian (such as Sansteel MinGuang, Fujian Sanbao, Fujian Dadonghai, Wuhang, and Fujian Hongfeng) successively adjusted the price spread between size groups for construction steel starting March 17.

[US Fed Held Rates Unchanged, SHFE and LME Centers Continued to Move Lower This Week] At the beginning of the week, the market was heavily affected by geopolitical disruptions, with strong wait-and-see sentiment, and LME zinc maintained a fluctuating trend; subsequently, from a fundamental perspective, inventories outside China accumulated sharply, compounded by the escalation of the Middle East conflict, and market expectations for US Fed interest rate cuts cooled significantly, putting LME zinc under pressure and driving it lower......

Copper prices fluctuated downward this week. At the start of the week, expectations for US Fed interest rate cuts continued to cool, and the market even began to price in possible rate hikes, weakening expectations for macro liquidity and putting copper prices under pressure, causing them to pull back. Mid-week, after the US Fed kept rates unchanged, the US PPI annual rate rose more than expected to 3.4, further weighing on market expectations for interest rate cuts within the year. According to market sources, traders no longer priced in any US Fed interest rate cuts this year, and bets on easing expectations faded further. The continued escalation in US-Iran tensions fueled safe-haven sentiment, while elevated oil prices intensified concerns over inflation and economic weakness. The stronger US dollar index also suppressed copper prices. In terms of fund positioning, the futures were mainly marked by long liquidation, with risk-off sentiment among funds rising and willingness to take profits at high levels increasing. Overall, macro headwinds dominated market sentiment, and copper prices came under pressure and corrected lower. Fundamentals side, copper concentrates TC continued to pull back. This week, the imported copper concentrates index was reported at -$67.32/mt, further lower WoW and at a historical low, with smelting pressure continuing to mount. In copper cathode, the continued downward shift in the center of copper prices significantly stimulated restocking demand from downstream enterprises, and spot inventory showed a rapid destocking trend. The import window remained open, but actual subsequent inflows of imported cargo still need further observation. According to SMM, orders at most downstream enterprises surged, with generally strong enthusiasm for buying the dip. Some sectors were notably boosted by the pullback in copper prices, and order performance improved. Looking ahead to next week, the macro logic remains unchanged. Cooling expectations for US Fed interest rate cuts, intertwined with geopolitical tensions in the Middle East, will continue to weigh on copper prices. However, fundamental support for copper prices is gradually strengthening. Faster destocking and stronger downstream restocking willingness will limit downside room, and copper prices are expected to continue fluctuating near the range in the short term. LME copper is expected to fluctuate between $11,700/mt and $12,500/mt, and SHFE copper between 91,000 yuan/mt and 97,000 yuan/mt. Spot side, as downstream restocking continues and inventory is drawn down, spot premiums are expected to continue to recover, but inflows of imported cargo and suppliers selling on strength will cap upside room. Spot prices against the SHFE copper 2604 contract are expected to range from a discount of 120 yuan/mt to a premium of 20 yuan/mt.

As a niche yet high-strategic rare metal, hafnium (Hf, atomic number 72) lags behind common metals like copper in public awareness, but its unique physicochemical properties make it irreplaceable for nuclear power, aerospace, semiconductors and other high-end fields. This concise breakdown covers its core traits, supply dynamics and critical applications to highlight its underrecognized role in advanced manufacturing. I. Core Properties A silver-gray, high-melting-point transition metal, hafnium exists solely as a zirconium-associated metal—no independent ore deposits. The near-identical atomic radius and chemical properties of zirconium and hafnium make separation/purification highly challenging, the root of its scarcity.Key strengths for harsh industrial use: 2233℃ melting point, exceptional high-temperature oxidation/structural stability Strong room-temperature plasticity, balanced strength and toughness Superior corrosion resistance (insoluble in dilute acids/alkalis, soluble only in hydrofluoric acid/aqua regia) ~600x higher thermal neutron absorption than zirconium (ideal for nuclear reactor control) High dielectric constant of hafnium oxide (critical for advanced semiconductors) Carbides/nitrides (melting point >2900℃) for ultra-high-temperature ceramics and hard alloys II. Supply & Scarcity Resources: Extremely scarce (crustal abundance ~3 ppm), exclusively tied to zirconium ores. Global resources concentrated in Australia, South Africa, the U.S. and Brazil; China faces low hafnium content in domestic zirconium ores, leading to high external dependence. Supply: Production hinges on zirconium smelting, with zirconium-hafnium separation as a core technical barrier. Only a handful of global players produce high-purity (nuclear/electronic-grade) hafnium at scale, forming an oligopoly. Annual output is ~hundreds of tons, with ultra-low supply elasticity—supply disruptions trigger sharp price swings. Ⅲ. Irreplaceable Core Applications Demand is rigid (no cost-effective substitutes) across high-end sectors: Nuclear Industry: Preferred material for pressurized water reactor control rods, regulating reaction rates and ensuring safety. Driven by global nuclear power revival, demand is steadily growing. Aerospace: Key nickel-based single-crystal superalloy additive, boosting high-temperature creep strength and lifespan for aero-engine turbine blades, combustors and rocket nozzles. Semiconductors: High-purity electronic-grade hafnium oxide overcomes silicon dioxide’s miniaturization limits, reducing leakage current and enabling advanced-node chip production—a key growth driver. Other High-End Fields: Used in cutting tool coatings, special electronic components, corrosion-resistant materials and emerging hydrogen storage research, with expanding use cases. Ⅳ. Conclusion Hafnium is a "scarce niche metal with rigid high-end demand," holding irreplaceable strategic value in China’s key industries (nuclear power, aerospace, semiconductors). The global market remains in long-term tight supply-demand balance, and its strategic and market value will rise alongside global advanced manufacturing upgrades.

NBS data showed that in February, the manufacturing PMI was 49.0%, down 0.3 percentage points from the previous month, indicating a pullback in the manufacturing sector’s prosperity level. In February, the non-manufacturing business activity index was 49.5%, up 0.1 percentage points from the previous month, indicating an improvement in the non-manufacturing sector’s prosperity level. In February, the composite PMI output index was 49.5%, down 0.3 percentage points from the previous month, indicating that overall production and business activities of enterprises in China slowed down from the previous month. Huo Lihui, Chief Statistician of the NBS Service Sector Survey Center, interpreted China’s PMI for February 2026. Performance of China’s PMI in February 2026 I. Performance of China’s Manufacturing PMI In February, the manufacturing PMI was 49.0%, down 0.3 percentage points from the previous month, indicating a pullback in the manufacturing sector’s prosperity level. By enterprise size, the PMI for large enterprises was 51.5%, up 1.2 percentage points from the previous month and above the threshold; the PMIs for medium- and small-sized enterprises were 47.5% and 44.8%, down 1.2 and 2.6 percentage points from the previous month, respectively, and below the threshold. By sub-index, among the five sub-indices that make up the manufacturing PMI, the production index, new orders index, raw material inventory index, employment index, and supplier delivery time index were all below the threshold. The production index was 49.6%, down 1.0 percentage points from the previous month, indicating that manufacturing production activities slowed down. The new orders index was 48.6%, down 0.6 percentage points from the previous month, indicating a decline in the prosperity of market demand in the manufacturing sector. The raw material inventory index was 47.5%, up 0.1 percentage points from the previous month, indicating that the decline in inventories of major raw materials in the manufacturing sector narrowed slightly. The employment index was 48.0%, down 0.1 percentage points from the previous month, indicating a slight pullback in the employment prosperity of manufacturing enterprises. The supplier delivery time index was 49.1%, down 1.0 percentage points from the previous month, indicating that delivery times of raw material suppliers in the manufacturing sector slowed compared with the previous month. II. Performance of China’s Non-Manufacturing PMI In February, the non-manufacturing business activity index was 49.5%, up 0.1 percentage points from the previous month, indicating an improvement in the non-manufacturing sector’s prosperity level. By industry, the construction business activity index was 48.2%, down 0.6 percentage points from the previous month; the services business activity index was 49.7%, up 0.2 percentage points from the previous month. From the perspective of service industries, the business activity indices for industries such as accommodation, catering, and culture/sports/entertainment were all in a high prosperity range above 60.0%; the business activity indices for industries such as capital market services and real estate were all below the threshold. The new orders index was 45.2%, down 0.9 percentage points MoM, indicating a pull back in non-manufacturing market demand. By industry, the new orders index for the construction industry was 42.2%, up 2.1 percentage points MoM; the new orders index for the services industry was 45.7%, down 1.4 percentage points MoM. The input prices index was 50.9%, up 0.9 percentage points MoM, indicating an overall increase in the price level of inputs used by non-manufacturing enterprises for business operations. By industry, the input prices index for the construction industry was 49.1%, down 2.9 percentage points MoM; the input prices index for the services industry was 51.2%, up 1.5 percentage points MoM. The selling price index was 48.8%, unchanged from the previous month and still below the threshold, indicating that the overall level of non-manufacturing selling prices was lower than in the previous month. By industry, the selling price index for the construction industry was 47.6%, down 0.6 percentage points MoM; the selling price index for the services industry was 49.0%, up 0.1 percentage points MoM. The employment index was 46.0%, down 0.1 percentage points MoM, indicating a slight pull back in the employment prosperity of non-manufacturing enterprises. By industry, the employment index for the construction industry was 42.5%, up 1.4 percentage points MoM; the employment index for the services industry was 46.6%, down 0.4 percentage points MoM. The business activity expectations index was 55.0%, down 1.0 percentage point MoM and still in a relatively high prosperity range, indicating that non-manufacturing enterprises remained confident in market development. By industry, the business activity expectations index for the construction industry was 50.9%, up 1.1 percentage points MoM; the business activity expectations index for the services industry was 55.8%, down 1.3 percentage points MoM. III. Performance of China’s Composite PMI Output Index In February, the composite PMI output index was 49.5%, down 0.3 percentage points MoM, indicating that overall production and business activities of enterprises in China slowed down compared with the previous month. In February, the manufacturing PMI pulled back, while the non-manufacturing business activity index rebounded slightly. —Huo Lihui, Chief Statistician of the NBS Service Survey Center, interprets China’s PMI for February 2026 On March 4, 2026, the NBS Service Survey Center and the China Federation of Logistics and Purchasing released China’s PMI. In this regard, Huo Lihui, Chief Statistician of the Service Industry Survey Center of the National Bureau of Statistics (NBS), provided an interpretation. In February, affected by factors such as the Chinese New Year holiday, the manufacturing PMI was 49.0, down 0.3 percentage points MoM; the non-manufacturing business activity index was 49.5, up 0.1 percentage points MoM; and the composite PMI output index was 49.5, down 0.3 percentage points MoM. I. The Manufacturing PMI Pulled Back In February, the manufacturing PMI was 49.0, with the prosperity level down from the previous month. Judging from historical data, the PMI in the month that includes the Chinese New Year mostly shows some fluctuations. In particular, this year’s Chinese New Year holiday was extended and fell entirely in mid-to-late February, which had some impact on enterprises’ production and operations, and overall market activity in manufacturing declined. (1) Both supply and demand slowed down. The production index and the new orders index were 49.6 and 48.6, down 1.0 and 0.6 percentage points MoM, respectively, indicating a pullback in manufacturing production and market demand. By industry, the production index and new orders index for industries such as agricultural and sideline food processing and computers, communications and electronic equipment were both above the critical point, with supply and demand prosperity remaining in expansion; in industries such as textiles, apparel and accessories and automobiles, both indices remained below the critical point, with weak market activity. (2) The PMI for large enterprises continued to expand. The PMI for large enterprises was 51.5, up 1.2 percentage points MoM, with production and operations remaining in expansion; small and medium-sized enterprises were more affected by the Chinese New Year holiday, with PMIs of 47.5 and 44.8 this month, down 1.2 and 2.6 percentage points MoM, respectively, and their prosperity levels pulled back. (3) Growth momentum in high-tech manufacturing continued to emerge. The high-tech manufacturing PMI was 51.5, remaining in expansion territory and significantly higher than the overall manufacturing level, indicating a favorable development trend in related industries; the consumer goods industry PMI was 48.8, up 0.5 percentage points MoM, with a rebound in the prosperity level; the PMIs for equipment manufacturing and high energy-consuming industries were 49.8 and 47.8, down 0.3 and 0.1 percentage points MoM, respectively, with their prosperity levels pulling back. (4) Enterprise expectations improved. The index of expectations for production and business activities was 53.2, up 0.6 percentage points MoM, indicating that manufacturing enterprises’ confidence in market development after the Chinese New Year strengthened. By industry, the index of expectations for production and business activities in industries such as general equipment and railway, ship, aerospace and aviation equipment was above 56.0, in a relatively high prosperity range, and related enterprises were more optimistic about near-term industry development. II. Non-Manufacturing Business Activity Index Edged Up Slightly In February, the non-manufacturing business activity index stood at 49.5%, up 0.1 percentage point from the previous month, indicating some improvement in the overall prosperity level of the non-manufacturing sector. (I) The service sector’s prosperity level rebounded. The service sector business activity index was 49.7%, up 0.2 percentage point from the previous month. By industry, driven by the Chinese New Year holiday effect, business volumes grew relatively quickly in industries related to residents’ travel and consumption; among them, the business activity indices for accommodation, catering, and culture, sports and entertainment all remained in the high-prosperity range above 60.0%, while those for retail and air transport rose to above 52.0%. Meanwhile, the business activity indices for capital market services and real estate remained at low levels, with subdued market activity. From the perspective of market expectations, the service sector business activity expectations index was 55.8%, remaining in a relatively high-prosperity range, indicating that service sector enterprises remained optimistic about near-term market developments. (II) The construction sector’s prosperity level declined. Affected by factors such as employees of enterprises returning to their hometowns in large numbers during the Chinese New Year holiday and the suspension of construction at some projects, the construction sector business activity index fell to 48.2%, down 0.6 percentage point from the previous month, and the construction sector’s prosperity level continued to pull back. From the perspective of market expectations, the construction sector business activity expectations index was 50.9%, up 1.1 percentage points from the previous month, returning above the threshold, indicating that construction sector enterprises’ confidence in future industry development had somewhat recovered. III. Composite PMI Output Index Pulled Back In February, the composite PMI output index was 49.5%, down 0.3 percentage point from the previous month, indicating that overall production and business activities of enterprises in China slowed down somewhat MoM. The manufacturing production index and the non-manufacturing business activity index, which make up the composite PMI output index, were 49.6% and 49.5%, respectively.