Karin Radstrom, CEO of Daimler Truck, a German commercial vehicle manufacturer, stated that the company has decided to increase its inventory of rare earths and key raw materials in the short term to mitigate production risks. Despite the need for additional investment, the company's procurement department is closely monitoring relevant developments, and there have been no supply disruptions or production halts so far. This decision is deemed necessary due to the heightened supply uncertainty caused by China's restrictions on rare earth exports.

[SMM Commentary: General Administration of Customs Issues Announcement on Querying Suspected Controlled Goods Without Certificates] On June 16, the General Administration of Customs issued an announcement regarding matters related to customs queries on the export control of dual-use items. It requires customs to implement query procedures for suspected controlled item exports without certificates. Enterprises are required to submit supporting materials such as contracts and technical reports within 7 working days, during which the goods will not be released.

India has halted rare earth exports to Japan, ending a 13-year bilateral agreement. This move aims to ensure domestic rare earth supply but has impacted Toyota Tsusho India, which previously exported about one-third of India's rare earth production to Japan.

According to US media reports, the US military has not yet made a decision on export licenses for special rare earth magnets, which are used in equipment such as fighter jets and missile systems. The US still restricts China's purchase of advanced artificial intelligence (AI) chips, citing their potential military value. Sources familiar with the matter revealed that during the London talks, the Chinese side pledged to expedite the approval of rare earth export applications from non-military US state-owned enterprises. So far, it has received tens of thousands of applications, with the relevant export licenses valid for six months. China also proposed establishing a green channel for "trusted" US state-owned enterprises to streamline the approval process. For some special military rare earths, including samarium, strict control measures are in place, and these rare earths are not included in the expedited approval scope covered by the London agreement.

US automaker Ford Motor Company still faces challenges in securing supplies of rare earth magnets, which are critical for vehicle production. Jim Farley, CEO of Ford, said that the supply of these key components has consistently come from China, but with China implementing a new approval process for rare earth exports, the supply continues to slow down. Ford can only confirm daily whether there is sufficient rare earth supply, forcing it to shut down some factories to barely maintain production. In May, due to a supply deficit of rare earths, Ford's Explorer SUV factory in Chicago halted production for a week. Farley said that while he is pleased with the recent progress in US-China trade negotiations, he has yet to see an improvement in the supply situation for magnets. He also mentioned that Ford has submitted applications to China's Ministry of Commerce, which are currently being reviewed one by one.

US automaker Ford Motor Company still faces challenges in securing supplies of rare earth magnets, which are critical for vehicle production. Jim Farley, CEO of Ford, said that the supply of these key components has been coming from China, but with China implementing a new approval process for rare earth exports, the supply continues to slow down. Ford can only confirm daily whether there is sufficient rare earth supply, forcing it to shut down some factories to barely maintain production. In May, due to a supply deficit of rare earths, Ford's Explorer SUV factory in Chicago halted production for a week. Farley said that while he is pleased with the recent progress in US-China trade negotiations, he has yet to see an improvement in the supply situation for magnets. He also mentioned that he has submitted applications to China's Ministry of Commerce, which are currently being reviewed one by one.

Macro side, US employment growth in May slightly exceeded expectations, but the pace of growth slowed down. Coupled with core CPI and PPI data both falling short of expectations, this strengthened market expectations for a US Fed interest rate cut within the year. The US dollar index continued to weaken, providing support for copper prices. However, the Trump administration's escalation of tariffs on imported steel and aluminum, as well as potential policy risks related to additional tariffs on copper, still weighed on market risk appetite, limiting the upside room for copper prices. Meanwhile, the economic and trade consultations between China and the US held in London sent signals of easing trade relations, and the US was reportedly considering lifting some restrictions on technology and energy exports in exchange for policy adjustments by China on rare earth exports, which boosted market confidence to some extent. The China-US talks are still ongoing, and no official announcement has been made yet, keeping the market in a cautious wait-and-see mood. This week, copper prices jumped initially and then pulled back, with LME copper trading around $9,650-9,750/mt and SHFE copper trading around 78,000-79,000 yuan/mt. On the fundamental side, the copper concentrates index continued to decline this week, with initial counteroffers from Chinese smelters in the mid-year negotiations remaining at a high single-digit level. Production cuts and shutdowns at overseas smelters persisted. For copper cathode, spot premiums both domestically and internationally fell sharply this week, with weak spot transactions. The backwardation structure of SHFE copper widened again, and downstream consumption sentiment was poor. Overall, as consumption entered the off-season, spot premiums in the copper cathode market came under pressure. Looking ahead to next week, with the US Fed's interest rate-setting meeting approaching, it is expected that the benchmark interest rate will remain unchanged in June. However, due to the impending maturity of US Treasuries and the recent poor performance of the Treasury auction market, which has led to significant volatility in US Treasuries, the US dollar is expected to remain at a low level. As the situation between China and the US gradually eases, market risk aversion has declined somewhat, which is expected to provide support for copper prices. It is expected that next week, LME copper will fluctuate rangebound within $9,600-9,800/mt, and SHFE copper will fluctuate within 77,500-79,500 yuan/mt. On the spot front, next week is the last trading day for the SHFE copper 2506 contract. After the backwardation structure of SHFE copper widened before delivery, the premium against the SHFE copper 2507 contract has surged. Spot prices against the SHFE copper 2507 contract are expected to range from a premium of 70-250 yuan/mt.

Macro News 1. On the afternoon of June 12, Premier Li Qiang met with European Central Bank President Christine Lagarde at the Great Hall of the People in Beijing. Li Qiang pointed out that China and Europe have strong economic complementarity, with China possessing a super-sized market advantage and continuously unleashing market potential. There is significant cooperation potential between China and Europe in many fields. China is willing to strengthen market connectivity and industrial synergy with Europe to add more momentum to their respective development. Lagarde stated that under the current international situation full of uncertainties, maintaining high-level exchanges and dialogue cooperation between Europe and China is crucial. Tariff wars and trade wars only lead to lose-lose outcomes, while adhering to multilateralism and strengthening open cooperation is the right choice. 2. On the afternoon of June 12, the Ministry of Commerce held a regular press conference. A reporter inquired about the first meeting of the China-US economic and trade consultation mechanism. Ministry of Commerce spokesperson He Yadong stated that from June 9 to 10 local time, the China-US economic and trade teams held the first meeting of the consultation mechanism in London, UK. The two sides reached a principled consensus on implementing the important consensus of the June 5 phone call between the two heads of state and the framework of measures to consolidate the outcomes of the Geneva economic and trade talks, making new progress in addressing each other's economic and trade concerns. Regarding the rare earth issue, as a responsible major country, China fully considers the reasonable needs and concerns of various countries in the private sector, reviews applications for export licenses of rare earth-related items in accordance with laws and regulations, has approved a certain number of compliant applications according to law, and will continue to strengthen the approval of compliant applications. 3. On June 11, People's Bank of China Governor Pan Gongsheng held the first annual meeting with European Central Bank President Christine Lagarde. The two sides exchanged in-depth views on topics including the economic and financial situations of China and Europe, reform of the international monetary system, global financial regulation, and key areas of cooperation between the two central banks. After the meeting, the two sides signed the Memorandum of Understanding on Cooperation between the People's Bank of China and the European Central Bank. 4. A passenger plane crashed at Ahmedabad Airport in Gujarat, India, on June 12. According to reports, all 242 people on board were killed. CCTV News learned that local police found one survivor in the Indian plane crash. 5. Foreign Ministry spokesperson Lin Jian presided over the regular press conference yesterday. A foreign media reporter asked about US President Trump's post on his social media platform, claiming that an agreement had been reached with China, such as China providing rare earth magnets. Lin Jian stated that China always honors its words with actions. Since a consensus has been reached, both sides should abide by it, and China hopes the US will work with China to implement the important consensus reached in the phone call between the two heads of state. Industry News 2. Recently, the People's Bank of China and the State Administration of Foreign Exchange jointly issued the "Several Measures on Financial Support for Fujian to Explore a New Path for Cross-Strait Integrated Development and Build a Demonstration Zone for Cross-Strait Integrated Development." TheThe "Several Measures" proposes 12 policy measures in four aspects: optimizing the financial ecosystem of the cross-strait shared "living circle", serving the construction of the first home for Taiwan compatriots and Taiwan-funded enterprises to land on the mainland, supporting the pilot program for high-level opening-up of cross-border trade in Fuzhou, Xiamen, and Quanzhou, supporting the facilitation of cross-border investment and financing under the capital account, comprehensively strengthening financial supervision, and effectively preventing and defusing financial risks. These measures are of great significance for continuously deepening the construction of a demonstration zone for cross-strait integrated development and promoting high-level financial opening-up. The People's Bank of China and the State Administration of Foreign Exchange will promote the detailed implementation of various policy measures outlined in the "Several Measures", further intensify financial support for the integrated development across the Taiwan Strait, and provide strong financial support for the construction of the demonstration zone for cross-strait integrated development. 3. At the Annual Meeting of the Asia Traders Forum & Stock Trading Summit 2025, Tim LUI, Chairman of the Securities and Futures Commission of Hong Kong, stated that the SFC is studying plans to adjust the number of shares per trading lot, thereby enhancing the convenience of trading high-priced stocks and odd lots, and further improving market liquidity. 4. The General Office of the People's Government of the Guangxi Zhuang Autonomous Region recently issued the "Implementation Plan for Special Actions to Boost Consumption in Guangxi". It mentions expanding support for trade-in policies for automobiles, home appliances, home improvement, kitchen and bathroom products, and e-bikes, as well as subsidies for purchasing new 3C digital products. 5. In 2025, Urumqi plans to develop 82 cultural and tourism projects with a total investment of 44.815 billion yuan and an annual planned investment of 5.4116 billion yuan, representing increases of 76%, 181%, and 170% respectively compared to 2024. The focus will be on introducing a batch of high-end hotel cluster projects, creating a number of major construction projects, and building a comprehensive cultural and tourism space integrating cultural experiences, commercial consumption, and leisure and entertainment. 6. With the "Suzhou Super League" gaining widespread popularity, some netizens have called on Sichuan to host similar football events through the "Ask the Government Sichuan" platform. In response, the Sichuan Provincial Sports Bureau stated that the "Bashu Xiongqi Cup" Sichuan Super League will learn from the healthy development experience of the "Suzhou Super League", improve the event system, strengthen supervision, promote fair competition, mobilize social forces to participate, facilitate the development of mass football and campus football, and support nationwide fitness. Company News 1. New China Life Insurance announced its intention to subscribe for private equity fund shares with an investment not exceeding 15 billion yuan. 2. China Vanke Co., Ltd. announced that it sold a total of 72.96 million A-share treasury shares from June 10 to June 12, which will help supplement the company's working capital. 3. *ST Gongzhi announced that the Shenzhen Stock Exchange has decided to terminate the listing of the company's shares. 4. Yidian Technology stated on an interactive platform that POP MART is an important client of the company. 5. ST Jinyi announced that the other risk warnings for the company's shares have been revoked, and trading will resume from June 16. 6. Xiaofang Pharmaceutical announced a collaboration with Shanghai Dermatology Hospital to develop Compound Platycladi Tincture, a Class 1.1 traditional Chinese medicine for treating hair loss. 7. PowerChina secured a 10.77 billion yuan offshore wind power EPC turnkey project. 8. Qingmu Technology clarified that it currently only provides e-commerce agency operation services for Pop Mart's Tmall flagship store. 9. Taiji Co., Ltd. disclosed that its controlling shareholder and actual controller are planning matters related to changes in company control, leading to a trading suspension. 10. Hengbao Co., Ltd. announced that director and vice president Gao Qiang plans to sell no more than 197,500 shares. 11. Jingjin Equipment reported that its actual controller, chairman, and general manager has been placed under retention. 12. Feiliner completed verification work, with its shares resuming trading on June 13. Global Markets US and European stocks showed mixed performance, with both the S&P 500 and Dow Jones hitting at least three-month closing highs. US stocks opened lower but closed higher, with all three major indices posting slight gains. The S&P 500 rose 0.38%, the Dow gained 0.24%, and the Nasdaq advanced 0.24%. The S&P 500 reached its highest closing level since late February, while the Dow achieved its best close since early March. Oracle surged over 13% to a record high after exceeding Q4 earnings expectations. US fintech firm Chime jumped over 37% on its debut. Boeing fell nearly 5% following an Air India Boeing 787 crash. European indices closed mixed, with Germany's DAX30 down 0.48%. International crude oil futures settled slightly lower. WTI July crude dropped 0.16%, while Brent August crude declined 0.59%. COMEX gold futures rose 0.84% to $3,406.8/oz, and silver futures gained 0.41% to $36.41/oz. Investment Opportunities 1. Pop Mart Expanded Capacity Early This Year, But Demand Far Exceeds Supply Chain Response Media reports indicate that since Chinese New Year, Pop Mart has urgently recalled workers and expanded capacity to meet surging demand driven by rising IP popularity. An insider described this as a "sweet trouble" where market demand vastly outpaces supply chain responsiveness, noting "even overworked sewing machines can't keep up." The core appeal of IP collectibles lies in instant emotional gratification. Labubu's distinctive features meet specific demands, amplified through social media. Current supply shortages and product scarcity further elevate circulation premiums, significantly boosting visibility. Zhongtai Securities released a research report stating that it is optimistic about the investment value of the IP industry and anticipates the growth and commercialization of major IPs. Three directions are worth noting: (1) Leading companies in the IP2C model for trendy toys that possess a high-quality IP matrix, strong operational capabilities, and channel strength; (2) Content producers with strong content creation capabilities; (3) IP operators in the IP2B2C model that possess high-quality IPs and B-end customer resources. 2. German nuclear fusion startup ProximaFusion secures record-breaking funding On Wednesday local time, German nuclear fusion startup ProximaFusion announced that it had raised €130 million (equivalent to $148 million) in a record-breaking funding round. Investors have high hopes that the company will be the first to build the world's first commercial nuclear fusion power plant. ProximaFusion's Series A funding round was co-led by CherryVentures and BaldertonCapital, marking the largest private nuclear fusion investment round in Europe to date. In recent years, market interest in nuclear fusion technology has continued to grow. Founder Securities' machinery equipment team is optimistic that the timeline for global nuclear fusion could be advanced. Currently, the European Commission (EC) has officially launched a four-week consultation period, which will help the EU establish a leading position in global nuclear fusion development and accelerate the commercialization of fusion energy. 3. Cumulative financing exceeds 1 billion yuan in the first half of the year; experts say commercial space is experiencing unprecedented development opportunities Media reports indicate that China's commercial space industry in 2025 is accelerating at an unprecedented pace towards industrialization. One of the most telling signs is the "real money" coming from the capital market. According to incomplete statistics by reporters, in the first five months of this year alone, the publicly disclosed and estimable financing amounts in China's commercial space sector have cumulatively exceeded 1 billion yuan. Recently, there have been continuous developments in the commercial space sector. LandSpace Technology Corporation's independently developed ZQ-2 Modification 2 remote sensing launch vehicle successfully started production and lifted off; Beijing CAS Space Technology Co., Ltd.'s KQ-1 remote sensing 7 launch vehicle was successfully launched; and the "Tada Hu Yang No. 1" satellite was successfully launched by the KQ-1 remote sensing 7 launch vehicle. Experts interviewed stated that after several years of cultivation, China's commercial space industry is flourishing, with enterprises in commercial satellites, commercial rockets, commercial monitoring and control, and other sectors emerging like bamboo shoots after a spring rain. The commercialization of the entire industry chain is being prioritized, and the industry chain ecosystem is continuously improving. With the synergy of policies, technology, and the market, commercial space is experiencing unprecedented development opportunities. 4. AI development brings significant changes to the industry, continuously expanding the space for the industry chain Institutions have pointed out that switching networks are the "blood vessels" of AIDC. Since entering the era of large models, as the scale of clusters has accelerated its expansion, the interconnection requirements between computing cards have rapidly increased. As the hardware core supporting the interconnection network, the industry chain space for switches has been continuously expanding. Guojin Securities believes that domestic large models are rapidly advancing from a scale of hundreds of billions of parameters to trillion and ten trillion parameters, and 800G switches will become an important driver for the rapid growth of the industry. Dell'Oro Group predicts that by 2025, the adoption rate of 800G switch ports is expected to exceed that of 400G data center switch ports, accounting for more than 25% of data center switch ports. The development of the AI industry has brought about significant changes to the switch industry. Along with the development of the domestic AI industry, domestic high-speed switches for training-side applications and domestic medium-speed switches for inference-side applications are on the verge of mass production. CPO, OCS, white-box switches, etc., are expected to become strategic highlands in the domestic switch industry, and enterprises with relevant layouts are worthy of close attention.

[SMM Morning Meeting Summary: Copper Prices Shift Center Higher, Dampening Downstream Purchasing Sentiment] On June 10, spot #1 copper cathode against the SHFE copper 2506 contract for the current month was quoted at a premium of 20-150 yuan/mt, with an average quoted premium of 85 yuan/mt, unchanged MoM. As the delivery date approaches today, the price spread between futures contracts shows no improvement. With copper prices remaining high, downstream purchasing has been suppressed, and overall trading has been weak...

According to SMM, on the macro front, Chinese and US economic and trade officials continued their second day of consultations in London, UK, on the 10th. US Commerce Secretary Lutnick reportedly stated on the 10th that the negotiations were "progressing smoothly." According to informed sources, during this round of consultations, the US side was considering canceling a series of recently imposed restrictive measures in areas such as chip design software, jet engine parts, ethane, and nuclear materials. Most of these measures were introduced in the past few weeks amid renewed tensions and escalations in Sino-US relations, with the condition that China would ease restrictions on rare earth exports. Additionally, it was learned that India and the US are expected to reach an interim trade agreement before month-end, and the US and Mexico are close to reaching an agreement on steel import tariffs. Amidst the uncertainty of trade prospects, market sentiment remained cautious, and copper prices closed slightly lower.