The operating rate for secondary copper rod was 20.17% in January 2026, exceeding the expected 18.56%, but decreased 0.25 percentage points MoM and 6.73 percentage points YoY. China's secondary copper rod market experienced a month of contradictions and stalemate amid unprecedented high copper prices and complex policy environments.

This week in wet process recycling: Recycled materials: Cobalt sulfate prices continued to decline this week, nickel salt prices remained stable, while lithium salt prices saw a minor rebound. Recovery rates for ternary and lithium cobalt oxide (LCO) black mass continued to fall, while lithium content in lithium iron phosphate (LFP) black mass remained temporarily steady. Taking ternary black mass as an example: Currently, due to the prolonged low price of lithium carbonate, the revenue contribution from lithium is lower than that from nickel sulfate and cobalt sulfate under these conditions. Therefore, most ternary wet-process enterprises now price the nickel-cobalt and lithium recovery rates in ternary black mass separately. For instance, the current recovery rate for nickel-cobalt in ternary electrode sheet black mass is 74-76%, while the lithium recovery rate is 71-74%.

Recycling: This week, the price of cobalt sulphate continued to decline, while the price of nickel salts remained stable, and the price of lithium chemicals saw a slight decrease. This week, the coefficients for ternary black mass, LCO black mass, and others continued to fall, while the prices per % lithium for LFP remained temporarily stable. Taking ternary black mass as an example: Currently, due to the prolonged low prices of lithium carbonate, the revenue generated by lithium chemicals is lower than that of nickel sulphate and cobalt sulphate. Therefore, most ternary wet-process enterprises price the nickel-cobalt and lithium coefficients of ternary black mass separately. Taking the coefficient of ternary pole piece black mass as an example: Currently, the nickel-cobalt coefficient of pole piece black mass ranges from 74-76%, and the lithium coefficient of pole piece black mass ranges from 71-74%.

[SMM Weekly Review of Lithium Battery Recycling Market: The spot market for used lithium batteries remained unfavorable this week (June 3-6, 2025)] This week, prices of products such as lithium chemicals and cobalt salts continued to decline, while nickel salt prices remained stable. Coefficients for products like ternary and LCO black mass also continued to fall this week. For LFP pole piece black mass, the lithium prices per % lithium were 2,250-2,400 yuan/mtu, and for LFP battery black mass, they were 2,050-2,200 yuan/mtu. Taking ternary black mass as an example: Currently, the nickel-cobalt coefficient for ternary pole piece black mass is 74-76%, and the lithium coefficient is 70-72%; for ternary battery black mass, the nickel-cobalt coefficient is 70-72%, and the lithium coefficient is 68-72%. Most enterprises in the market have begun to price based on different coefficients. On the demand side, most hydrometallurgy plants have chosen to operate at a semi-shutdown status amid the continuous decline in nickel, cobalt, and lithium salt prices. Most ternary and LFP hydrometallurgy plants have reduced their procurement volumes this month, only consuming basic inventory. Due to the market's pessimistic outlook on subsequent lithium salt prices, they are cautious about purchasing LFP black mass, resulting in very sluggish market transactions. Currently, procurement in May has decreased by approximately 15-20% MoM, and June is expected to remain basically flat. On the supply side, the psychological selling prices of grinding mills and traders have loosened somewhat due to the continuous decline in salt prices and the sentiment surrounding them. Black mass prices have generally followed the downward trend of salt prices, but the rate of decline remains slower than that of salt prices. Additionally, some grinding mills, as their current profit margins from black mass production are still below the surplus line, have chosen to hold back from selling, waiting for a subsequent market recovery. Market transactions are sluggish, and procurement volumes in June are expected to remain stable or slightly decrease MoM from April. On the cost side, currently, except for the top...

Debt restructuring for real estate enterprises is expected to enter the "debt reduction era." Recently, Sunac China announced that holders of approximately 74% of the total outstanding principal amount of its existing debts had submitted letters to join the offshore debt restructuring support agreement. Country Garden also announced that it had reached a consensus with over 70% of its creditors on high-yield bonds in terms of offshore debt, aiming to complete the overall restructuring of offshore debt within this year. With Sunac and Country Garden successively announcing the progress of their offshore debt restructuring, the debt restructuring or reorganization of troubled real estate enterprises is accelerating. Since June, offshore debt restructuring plans of real estate enterprises such as CIFI and Golden Wheel Tiandi have basically been approved by creditors and will proceed to court hearings. Logan Group has released a debt restructuring plan, aiming to advance debt optimization efforts. At the same time, the debt restructuring model for real estate enterprises is shifting from extension to substantive debt reduction. Among them, Sunac's offshore debt restructuring plan is expected to reduce debt by approximately RMB 60 billion. Country Garden's offshore debt restructuring proposal is expected to reduce debt by up to $11.6 billion. CIFI's offshore debt restructuring is expected to reduce offshore debt by approximately $5.27 billion, equivalent to approximately RMB 37.9 billion. "If enterprises and investors can reach a consensus on the terms of debt restructuring involving 'debt reduction,' we believe that the short-term liquidity pressure on real estate enterprises will be alleviated, allowing them to devote more energy to asset revitalization and sales, which will have a positive impact on the stabilization of the entire industry," Shi Lulu, Director of Corporate Ratings, Asia Pacific at Fitch Ratings, told reporters. However, while reaching a restructuring agreement can alleviate external financing pressure, real estate enterprises still face challenges in internal operating cash flow. Shi Lulu believes that in the short term, the quality of existing projects and the ability to revitalize assets are important considerations for determining a real estate enterprise's endogenous cash flow and investor decisions. "Despite the continuous optimization and adjustment of policies by the central and local governments, the recovery of the real estate market may primarily be concentrated in first-tier cities and some strong second-tier cities. However, competition in these cities is intensifying, as most national state-owned real estate enterprises are also repositioning and focusing on developing in these cities," Shi Lulu said. "Whether restructuring real estate enterprises can replenish land in these cities will have a significant impact on their medium and long-term development." Acceleration of Debt Restructuring for Real Estate Enterprises Recently, leading real estate enterprises such as Sunac and Country Garden have successively announced the progress of their restructuring, with debt reductions often amounting to billions of dollars, signaling that the industry's debt resolution process has entered a critical stage. "Currently, Sunac has secured support from approximately 74% of all creditors, indicating that the offshore debt restructuring is substantially completed," a debt restructuring analyst said. When the court rules on a debt restructuring case, it is deemed approved if 75% of the creditors who participate in the vote cast affirmative votes. A source close to Sunac told reporters that once the offshore debt restructuring is successful, Sunac will become the first large-scale real estate enterprise in the industry to have its offshore debt basically cleared to "zero," significantly mitigating debt risks at the publicly listed firm level, with an estimated debt resolution of approximately 60 billion yuan. Sunac's offshore debt restructuring receiving a high level of support is not an isolated case. On June 5, Wu Bijun, Chief Financial Officer and Executive Director of Country Garden, stated at an online shareholders' meeting that consensus had been reached with over 70% of creditors on high-yield debt. In addition, CIFI Holdings has also made progress in its offshore debt restructuring. The company announced that it had secured the required statutory majority support from plan creditors at a plan meeting held on June 3, and it is expected that offshore debt will be reduced by approximately $5.27 billion after the restructuring. The next step is to seek court approval for the plan on June 26. On the same day, Logan Group announced the optimization and adjustment of its debt restructuring plan. Under the new restructuring plan, the 29 original credit enhancement assets of the underlying bonds will be used for the full conversion of the specific asset option, the asset-for-debt settlement mode (including in-kind debt settlement and trust debt settlement) under the asset-for-debt option, and the full debt retention option, maximizing the revitalization of credit enhancement assets. Meanwhile, the company's shareholders will raise additional cash and equity resources for the new restructuring plan. Liu Shui, Director of Corporate Research at the China Index Academy, told reporters that the acceleration of debt restructuring among real estate enterprises is attributed to two factors. First, distressed real estate enterprises are offering diversified restructuring methods, such as combining debt-to-equity swaps, debt maturity extensions, asset settlements, and cash payments, which can meet the needs of different creditors and improve the acceptability of the plans. Second, creditors' attitudes have shifted under the current market conditions. "The real estate market has been adjusting for a long time, and creditors are aware of the difficulty real estate enterprises face in repaying debts. Compared to bankruptcy liquidation and the continuous depreciation of assets, they are more inclined to accept restructuring plans to improve the debt repayment rate. Additionally, some creditors, after the continuous transfer of debts of distressed real estate enterprises, have lower holding costs. If the cash recovery value of the restructuring plan is more attractive, they are more willing to accept it." Debt-to-Equity Swaps and Debt Reduction Become Mainstream It is worth noting that this year, the debt restructuring of real estate enterprises has moved from maturity extensions and deferred payments into the deep waters of debt reduction and burden alleviation. According to the offshore debt restructuring plans of Sunac, Country Garden, and CIFI Holdings, a significant reduction in debt principal has become a core feature. This shift may be driven by severe debt pressures. Data from CRIC shows that the scale of debt maturities for real estate enterprises in 2025 will reach 525.7 billion yuan, further climbing from 482.8 billion yuan in 2024. "The scale of debt maturities for real estate enterprises this year is higher than that in 2024, posing greater debt repayment pressures. As multiple real estate enterprises advance their debt restructuring, the trend of increasing debt reduction ratios is gradually emerging," pointed out a research report by Orient Securities. "This year, the debt reduction ratios in the debt restructuring of many real estate enterprises are significantly higher than the levels in 2023," Zhang Bo, President of the 58 Anjuke Research Institute, told reporters. In the first five months of this year, the total sales of the top 100 real estate enterprises declined on a YoY basis, while the sales decline of distressed real estate enterprises was even more pronounced, directly leading to changes in the original cash flow forecasting models for these enterprises. "Under the new model, the future cash inflows of distressed real estate enterprises are expected to continue to decrease. This cash flow gap renders extension strategies ineffective. Only by reducing debt through debt reduction can the interests of creditors be maximized," Zhang Bo said. Liu Shui further explained that considering the decline in the absolute scale of the new home market over the long term and the fact that the market is still bottoming out in the short term, with asset depreciation pressures remaining, simply extending the repayment period may lead to issues of repeated overdue payments and secondary extensions, and cannot thoroughly resolve the debt crisis. "Therefore, debt-to-equity swaps and principal reductions can achieve a reduction in the company's debt scale, delay the overall debt repayment pressure, and debt-to-equity swaps also simultaneously increase net assets, which is conducive to repairing the company's balance sheet and creating conditions for an improvement in the company's fundamental business performance," Liu Shui said. Multiple industry analysts have pointed out that in the future, under the pressure of unstable new home sales and asset depreciation, real estate enterprises with greater debt repayment pressures will accelerate their debt restructuring processes, and increasing debt reduction ratios may become a widespread trend. Policy Environment Provides Support for Real Estate Enterprises' Debt Restructuring Behind the acceleration of real estate enterprises' debt restructuring lies the simultaneous improvement of the policy environment and market financing conditions. At the policy level, Li Yunze, Director of the National Financial Regulatory Administration, stated at a State Council Information Office press conference on May 7 that the government will expedite the introduction of a series of financing systems tailored to the new model of real estate development to help sustain and consolidate the stability of the real estate market. "This means that more supporting policies will be continuously implemented in the future, and loan support for enterprises will be continuously increased," Liu Shui said. It is expected that the "white list" policy for real estate project financing will continue to be refined to facilitate the substantial allocation of funds and improve the financial positions of enterprises. At the same time, the urban real estate financing coordination mechanism plays a positive role in ensuring the smooth construction and delivery of projects, stabilizing the confidence of financial institutions, alleviating the financial pressure on enterprises, promoting risk isolation and resolution, and driving improvements in market expectations, which is conducive to the smooth progress of debt restructuring work. A real estate industry analyst pointed out that it is expected that the role of policy support will become increasingly apparent. For example, the 4 trillion yuan financing white list and the acquisition and storage of existing housing and idle land by real estate enterprises will play a certain role in promoting the asset liquidation and debt repayment of distressed real estate enterprises. At the market level, financing costs for real estate enterprises have declined. Data from the China Index Academy shows that in May this year, the total bond financing of real estate enterprises was 28.88 billion yuan, up 23.5% YoY. The average interest rate for bond financing was 2.35%, down 0.43 percentage points YoY and 0.41 percentage points MoM. "In terms of institutional innovation in the future, tools such as tiered design of convertible bonds, service trusts, and optimization of M&A financing will be used to reshape the logic of debt restructuring for real estate enterprises. However, challenges such as the sustainability of sales recovery and slow credit repair still need to be addressed," said Zhang Bo. In fact, although the debt restructuring of real estate enterprises has accelerated, industry risks have not yet been fully cleared. Liu Shui believes that the success of a real estate enterprise's restructuring does not mean it is out of the woods. Successful debt restructuring will help mitigate risks, but for enterprises to truly emerge from the crisis, they still need the support of a market recovery. Only after their fundamentals improve can they avoid repeated extensions or restructuring.

This week, stainless steel continued to show a trend of weakening spot prices and production costs in tandem. Amid the off-season for consumption, demand remained persistently weak. Stainless steel traders offered discounts to facilitate transactions, leading to a continuous decline in prices. On the cost side, although high-grade NPI prices rose slightly due to the firm support from nickel ore prices, the prices of stainless steel scrap and high-carbon ferrochrome both pulled back amid production cuts by stainless steel mills due to losses, resulting in sustained losses for stainless steel mills. Taking 304 cold-rolled products as an example, based on the raw material prices of the day, the cash cost decreased by 55.47 yuan/mt this week, with the loss ratio narrowing to 5.82%. If calculated based on the cost of raw material inventory, although the cash cost decreased by 81.88 yuan/mt, the loss ratio remained at 4.77%. Regarding the cost of nickel-based raw materials. At the beginning of the week, supported by the strong nickel ore prices, NPI traders showed strong reluctance to budge on prices, significantly reducing the number of low-priced offers in the market and driving a slight increase in high-grade NPI prices. However, stainless steel enterprises, facing prolonged losses due to the mismatch between costs and selling prices, were extremely cautious about purchasing high-priced raw materials, resulting in low purchase willingness. Additionally, as the stainless steel market entered the traditional consumption off-season and news of production cuts by steel mills emerged frequently, the loose supply situation in the high-grade NPI market did not see substantial improvement. On Friday, a major stainless steel mill maintained its purchase price for high-grade NPI at 940 yuan/mtu, severely denting market confidence and leading to a further decline in retail quotations. By the close of trading on Friday, the price of high-grade NPI with a grade of 10-12% had fallen by 3 yuan/mtu cumulatively, ultimately closing at 951 yuan/mtu. In the stainless steel scrap market, prices continued to decline in tandem with stainless steel finished products. Despite the narrowing economic disadvantage of stainless steel scrap compared to high-grade NPI, it still lacked cost advantages. As of Friday, the price of 304 off-cuts in east China had fallen by 100 yuan/mt cumulatively, with the latest quotation dropping to 9,850 yuan/mt. Regarding the cost of chrome-based raw materials, domestic high-carbon ferrochrome production has continued to rise recently, significantly increasing the availability of retail supplies in the market. Meanwhile, chrome ore prices showed a downward trend during the week. Overseas mines not only sold off spot chrome ore in bonded zones but also lowered their futures quotations for chrome ore, further weakening the cost support for ferrochrome. Coupled with the continuous news of production cuts by stainless steel mills, market expectations for ferrochrome demand decreased accordingly, denting the confidence of ferrochrome traders and driving a continuous decline in retail prices. However, recent production halts by overseas ferrochrome enterprises have led to a significant contraction in ferrochrome supply in the international market, and it is expected that China's ferrochrome imports will decrease. Considering the need to secure raw material supply, stainless steel mills may exercise relative restraint in lowering prices during ferrochrome procurement tenders. Data shows that high-carbon ferrochrome prices in Inner Mongolia fell by 100 yuan per 50 base tons this week, with the latest quotation at 7,850 yuan per 50 base tons. Overall, the current stainless steel market continues to experience sluggish consumption. Despite production cuts implemented by steel mills, the extent of these cuts has not yet matched the pace of demand decline. Under the dual pressures of supply surplus and high shipping pressure, stainless steel prices are expected to remain in the doldrums in the short term. As the scope of production cuts by steel mills expands, demand for raw materials such as nickel and chromium continues to shrink, further exacerbating the downward pressure on furnace charge prices. If this situation persists, the stainless steel industry may fall into a vicious cycle of production contraction, low prices, and declining costs, posing significant challenges to market recovery.

[SMM Stainless Steel Daily Review: Sluggish Start to Off-Season in June, High Stainless Steel Inventory and Sluggish Transactions] SMM reported on June 6 that today, the SS futures market continued to be in the doldrums. This week marks the first week after the Dragon Boat Festival holiday, coinciding with the traditional consumption off-season for stainless steel in June, resulting in a gloomy market atmosphere. During the holiday, news of price cuts by stainless steel mills exacerbated market pessimism. This week, spot transactions remained sluggish, with downstream players adopting a cautious wait-and-see attitude, and only just-in-time procurement remained active. Market monitoring indicated a significant increase in social inventory at major distribution centers such as Foshan and Wuxi during the week, due to high arrivals and slow shipments, leading to severe inventory backlogs. Traders faced increased pressure to sell, and despite actively offering discounts and adjusting prices, the market response was tepid, with no improvement in transactions. In the futures market, the most-traded 2507 contract was in the doldrums. At 10:30 a.m., SS2507 was quoted at 12,700 yuan/mt, up 10 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 420 to 620 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,850 yuan/mt; the average price of cold-rolled trimmed 304/2B coils was 13,050 yuan/mt in Wuxi and 13,050 yuan/mt in Foshan; the cold-rolled 316L/2B coil was quoted at 24,050 yuan/mt in Wuxi and 24,050 yuan/mt in Foshan; the hot-rolled 316L/NO.1 coil was quoted at 23,350 yuan/mt in both regions; the cold-rolled 430/2B coils in Wuxi and Foshan were both quoted at 7,500 yuan/mt. Currently, the stainless steel market has fully entered the predicament of the traditional consumption off-season, with downstream demand remaining persistently sluggish...

The latest strategic viewpoints from the top ten securities firms have just been released, as detailed below: Soochow Securities: June may mark the starting point of a new round of "East Rising, West Declining" trades The US dollar cycle is pivotal to the "East Rising, West Declining" trade. Historical experience shows that during periods of global liquidity easing and a weakening US dollar, non-US assets tend to strengthen, and the Chinese market will also benefit. Looking ahead, a weak US dollar remains the baseline assumption. Due to multiple factors such as ongoing disruptions from Trump's policies, the US government's debt pressure, and potential risks in the fundamentals, the US dollar is expected to trend weaker. Since the US dollar index turned down again in mid-May, it has once again fallen below the 100 mark. It is judged that the US dollar will continue to decline in June, possibly breaking below the previous low. The liquidity spillover driven by a weak US dollar will lead the A-share market to embark on a new round of "East Rising, West Declining" trades. In recent years, the value/growth style of the A-share market has been increasingly influenced by the US dollar cycle, specifically showing that growth stocks tend to outperform during periods of a weak US dollar. As June approaches, the technology sector will witness a series of catalytic events, and its prospects are expected to remain robust. Meanwhile, the valuations and liquidity of growth stocks will also benefit from a weak US dollar environment, potentially exhibiting better resilience. In terms of specific allocation directions, the main themes and industrial trends to focus on include: AI edge devices (including AI phones, AI glasses), AI large models, humanoid robots, controllable nuclear fusion, deep-sea technology, and autonomous driving. Zhongtai Securities: Maintaining the "switch from high to low" viewpoint at the current juncture The current market is at a critical period marked by the interplay of domestic and foreign policy variables. Domestically, the "15th Five-Year Plan" sets the tone, and reforms in public funds may reshape the market. Externally, intensifying tariff disputes between Europe and the US, as well as increased policy uncertainty within the US, will all have complex impacts on the market. At the current juncture, the "switch from high to low" viewpoint is still maintained, with a relatively optimistic stance on the technology sector. The overall market is expected to continue rotating rapidly among various hot topics in Q2. Investors should avoid chasing highs and instead focus on bottom-fishing opportunities, with this allocation logic remaining unchanged. 1) While maintaining a base portfolio of stable assets such as dividend stocks, gold, long-term bonds, and blue chips, focus on opportunities to bottom-fish in safety-related assets and technology stocks; 2) The high growth momentum in upstream AI computing power, servers, etc., as seen from Q1 earnings reports, is expected to continue into H2. Moreover, the update of the new version of DeepSeek may trigger investors' risk appetite for the technology sector; 3) The Trump administration has recently intensified technology restrictions on industries such as chips, coupled with China's increased emphasis on technology at the policy level. Among these, the direction of domestic substitution, represented by semiconductors, will also present certain opportunities. Overall, in Q2, the fundamentals of core city real estate and other endogenous momentum are gradually showing a "turning point," but total data may remain resilient under the "rush to switch exports." Current overall policies still maintain strong determination, but there is a high level of attention on the capital market, which may provide some support to the market. Hua Jin Securities: June Continues to Fluctuate Upward with Technology and Consumption Remaining the Main Themes In June, A-shares may continue to fluctuate upward. (1) Policies in June may be more proactive, with some uncertainty regarding external events. First, positive policies in June may accelerate implementation. Second, external events such as Sino-US tariff negotiations in June face some uncertainty. (2) The fundamentals in June may continue to improve. First, economic data in June may continue to show strength: firstly, the Dragon Boat Festival holiday and the "618" shopping season may keep consumption growth at a high level; secondly, overseas restocking may lead to a rebound in export growth in June; finally, accelerated policy implementation may maintain high growth in manufacturing and infrastructure investment in June, although real estate investment growth remains weak. Second, profit growth in June may continue to be in a recovery cycle. (3) Liquidity in June may remain loose. First, repeated expectations of interest rate cuts overseas have limited impact on domestic easing. Second, the inflow of funds into the stock market in June may improve; historically, foreign and margin financing flows tend to increase in June; after the holiday, margin financing and foreign capital may also return. Technology and consumption remain the main themes, with some core assets and cyclical sectors possibly offering investment opportunities. First, new consumption is likely to generate excess returns in June; second, policy encouragement points to TMT and consumption, with high-growth industries mainly concentrated in non-ferrous metals, TMT, and machinery. It is recommended to continue to allocate on dips: first, sectors with upward policy and industry trends such as computer (domestic software, autonomous driving), robotics, military, media (AI applications, gaming), electronics (semiconductors), and communications (computing power); second, sectors where fundamental expectations may marginally improve, including innovative drugs, electric vehicles, food, social services, trade retail, non-ferrous metals, and chemicals. China Galaxy: Technology Will Remain the Medium and Long-Term Investment Theme Recently, the sector rotation speed has increased, and the market's volatile pattern has not changed, with no significant increase in trading volume, still dominated by existing players. There is considerable uncertainty in the external market. On May 29, the US Federal Circuit Court of Appeals granted the Trump administration's request to temporarily suspend the previous ruling by the US International Trade Court. Although a phased tariff agreement between China and the US has been reached, temporarily alleviating trade pressure, the Trump administration's policies remain unpredictable. In the short term, the market may continue to maintain a fluctuating trend. Attention should be paid to changes in external tariffs and the pace of domestic policy implementation. With the support of a series of domestic policies, the market's adjustment space is limited. Meanwhile, several major financial policies are expected to be announced during the Lujiazui Forum from June 18 to 19, which are likely to support market expectations. It is recommended to focus on structural opportunities. In the long term, the trend of the A-share market will still reflect the principle of "taking our own path as the main focus". As the Central Huijin Investment Ltd. effectively plays the role of a "stabilization fund" and policies vigorously promote the entry of medium and long-term funds into the market, the A-share market will have a more solid foundation for stable operation. Allocation opportunities across three main themes: First, assets with a relatively high safety margin. Against the backdrop of significantly increased uncertainty in the external environment, the dividend sector, which has relatively strong earnings certainty and overall stable dividend returns, possesses defensive attributes. Second, the logic of the "technology narrative" in the A-share market is clear. The revised restructuring measures will help promote the participation of early-stage technology innovation enterprises in mergers and acquisitions. Technology will remain the main theme for medium and long-term allocation, with short-term focus on sub-sectors with lower valuations. Third, the big consumption sector boosted by policies. Economic data for April shows that the trade-in policy for consumer goods continues to be effective. Recently, the concept of new consumption has been repeatedly active. As uncertainty in the external environment increases, expanding domestic demand has become a long-term strategic move, highlighting the importance of boosting consumption. Dongguan Securities: The market's overall risk appetite is expected to receive systematic support. From the perspective of the market environment in June, overseas, the US tariff policy has been fluctuating, and the subsequent path of interest rate cuts by the US Fed will highly depend on subsequent economic data and tariff negotiation progress. Domestically, with the easing of Sino-US trade disputes, the implementation of a series of incremental policies by the "one bank, one bureau, one commission", and the concerted efforts of all parties to promote the effective implementation of established policies and accelerate the strengthening of incremental policy reserves, all these provide strong support for the domestic economic fundamentals. In the capital market, the current concerted efforts to stabilize the capital market have injected key momentum into boosting investor confidence. Looking ahead to June, as Sino-US trade relations tend to ease, quasi-stabilization funds have played a crucial supporting role in hedging tail risks in the market. With the concerted efforts of all parties to promote the effective implementation of established policies, accelerate the strengthening of incremental policy reserves, and the continuous entry of medium and long-term funds into the market, it is expected to continuously improve the market's microstructure and enhance investor confidence. Against the backdrop of the combined forces of policies and funding, the market's overall risk appetite is expected to receive systematic support. However, considering that there may be certain selling pressure above, the market may continue to fluctuate in the short term. In the medium term, supported by the economy's resilience and the accumulation of policy tools, the broader market still has upward momentum. Sector Allocation: Overweight financials, utilities, non-ferrous metals, and TMT. BOC Securities: Exports May Exceed Expectations This Year From overseas industry inventory perspectives, most sectors are in the mid-stage of restocking except midstream industries like automobiles, machinery equipment, and transportation equipment. Downstream consumer goods-related sectors show more pronounced restocking, reflecting resilient overseas demand. Leading indicators suggest short-term overseas restocking demand will likely persist, with potential for exports to surpass expectations this year. Market-wise, since May, sectors tied to external demand have outperformed. The Geneva agreement between China and the U.S. temporarily boosted market sentiment, while April's stronger-than-expected exports corrected overly pessimistic expectations. Subsequent uncertainties around export and external demand strength remain the market's focus. Unlike 2018, tariff policies now pose significantly reduced impacts on domestic fundamentals and markets. Fundamentally, ample policy buffers mitigate economic downside risks, with domestic demand data and tariff progress influencing policy expectations. Market-wise, upside room depends on economic recovery strength, while "quasi-stabilization funds" contain downside risks. Uncertainty from Trump-era trade policies may prolong "diversion trade," with resilient demand potentially driving exports above expectations and strengthening external demand chains. GF Securities: China-U.S. Relations, Fiscal Stimulus, and DeepSeek's Tech Breakthrough May Trigger A-Share Market Breakout After April's oversold rebound, A-shares fluctuated rangebound near pre-reciprocal tariff levels, with only innovative drugs showing sectoral trends amid mostly thematic rotations. Looking ahead, China-U.S. relations, fiscal stimulus, and DeepSeek's tech milestone could serve as key triggers to escape this tight range. Absent domestic fiscal or bilateral progress, tech sector developments may prove pivotal. After three months of adjustment, tech stocks—especially AI-related segments—now meet prerequisites for a rebound: 1) TMT turnover ratios hover at the lower bound of 2023's AI narrative range, signaling potential momentum; 2) Since April's reciprocal-tariff rebound, margin balances stagnated at yearly lows, leaving room for incremental funding. Thus, June's concentrated tech giant product launches may prove decisive. Ping An Securities: New Quality Momentum Gathers Strength, Tech Growth Breaks Through Overseas, the US tariff policy faces multiple uncertainties from domestic judicial rulings and external negotiations, while Nvidia's Q1 results exceeded expectations again. Domestically, the manufacturing sector's prosperity margin rebounded in May, with high-tech industry profits showing positive trends; expectations for financial policies have increased. Overall, the current changes in the external environment still carry uncertainties, and the importance of self-reliance and controllability in domestic technology and the resilience of domestic demand continue to rise. Domestic policy support and the positive development of industries towards innovation are expected to continue to support the medium-term upward potential of the equity market. Structurally, attention should be paid to two main lines: First, the growth style represented by domestic technology and high-end manufacturing, such as the defense and military industry with upward industry prospects, and the direction of self-reliance and controllability in technology represented by semiconductors; second, high-quality consumer assets (new consumption/pharmaceutical and biological, etc.) that benefit from policies supporting the expansion of domestic demand. Huaxi Securities: A-shares in June Still in a Window Period for Market Recovery A-shares in June remain in a window period for market recovery. Recently, market trading sentiment has pulled back, mainly due to the repeated changes in the US tariff policy overseas. In addition, the slow pace of Sino-US trade negotiations may partly be due to tactical considerations in negotiations. Subsequent Phase II Sino-US consultations will remain a key influencing factor for market risk appetite. On the other hand, the strength of domestic medium and long-term patient capital is growing. By promoting the construction of long-term market stabilization mechanisms and signaling regular "market support," regulators will strongly support the bottom range of A-shares. ·In terms of industry allocation, maintain a moderately balanced allocation. Attention should be paid to precious metals, public utilities, new consumption, AI applications (software, hardware), etc. In terms of themes, attention should be paid to: military industry, self-reliance and controllability, mergers and acquisitions, etc. Everbright Securities: Consumption is Expected to Remain One of the Key Momentums for Economic Recovery The most severe period of short-term external risk disturbances may have passed, but vigilance is still needed regarding potential reversals in Trump's subsequent policies. Recently, domestic policies have remained actively implemented, and it is expected that subsequent policies will continue to be rolled out. With the US and China hitting the "pause" button on "reciprocal tariffs" for 90 days, exports may maintain high growth in the short term, and consumption is expected to remain one of the key momentums for economic recovery. Amidst the interplay of internal and external factors, it is expected that the index will remain volatile overall in June. Definite Main Lines: 1) Domestic consumption. Expanding domestic demand has been a key focus of recent domestic policies, and it is expected to continue to receive policy catalysts in the future. In addition, the overall performance of the consumer industry is more resilient. Attention should be paid to industries such as household goods, food processing, professional services, and leisure food. 2) Domestic substitution. Attention should be paid to two clues: performance certainty and thematic investment. The former focuses on industries with a high proportion of imports from the US and strong domestic supply capabilities, including publishing, decoration materials, etc. The latter focuses on industries with a high proportion of imports from the US but with domestic supply capabilities expected to improve, such as aviation equipment, medical devices, animal health, and chemical pharmaceuticals. 3) Underallocated sectors by funds: The "Action Plan for Promoting the High-Quality Development of Public Funds" may have a profound impact on the asset allocation of the fund industry. Some sectors that are underallocated by funds are worth paying attention to in the medium and long-term, including banking, non-banking financial services, utilities, transportation, and other industries. However, in the short-term, it is necessary to be cautious about the potential expectation deviations that may arise from over-interpretation.

Despite numerous challenges in the market, the overall real estate market continued to stabilize and recover, driven by sustained policy efforts and proactive strategic adjustments by enterprises. According to CRIC statistics, the top 100 real estate enterprises achieved sales operating revenue of 294.58 billion yuan in May this year, up 3.5% MoM. Data showed that over half of the top 100 real estate enterprises saw a MoM increase in their monthly performance in May, with 22 enterprises experiencing a MoM growth of over 30% in their monthly performance. Real estate enterprises such as Greentown China, CNOOC Real Estate, China Jinmao, Greenland Holdings, and PowerChina Real Estate all achieved significant MoM and YoY improvements in their monthly performance. "Driven by sales promotions by real estate enterprises and the supply of high-quality housing, new home sales in key cities increased MoM in May." Analysts from China Index Academy predicted that the policy environment for the real estate market in June would remain accommodative. Coupled with the arrival of the mid-year sales period, the pace of property launches and the intensity of sales promotions by real estate enterprises may increase, and the market in core cities is expected to continue its recovery. From a cumulative sales performance perspective, data from China Index Academy showed that from January to May 2025, the total sales of the top 100 real estate enterprises reached 1.44364 trillion yuan, down 10.8% YoY. There were 33 real estate enterprises with total sales exceeding 10 billion yuan, the same as the previous year. There were 64 real estate enterprises with sales between 5 billion and 10 billion yuan, a decrease of 6 from the previous year. Among them, Poly Developments and Holdings ranked first in the industry with sales of 116.1 billion yuan in the first five months, followed by Greentown China with 96.4 billion yuan, CNOOC Real Estate with 90.4 billion yuan in third place, China Resources Land with 86.85 billion yuan in fourth place, and China Merchants Shekou with 67.1 billion yuan in fifth place. The sixth to tenth places in the industry were occupied by Vanke, C&D Real Estate, Yuexiu Property, Binjiang Group, and Huafa Industrial, with sales of 57 billion yuan, 56.1 billion yuan, 50.8 billion yuan, 43.36 billion yuan, and 43.26 billion yuan, respectively. As the sales market gradually stabilizes, significant changes have also occurred in the land acquisition strategies of real estate enterprises. In terms of land acquisition, from January to May 2025, the total land acquisition amount of the TOP 100 enterprises reached 405.19 billion yuan, up 28.8% YoY. In terms of new inventory value, Poly Developments and Holdings, Greentown China, and China Jinmao ranked among the top three. From January to May 2025, Poly Developments and Holdings topped the list with a new inventory value of 72.8 billion yuan, followed by Greentown China with 72.3 billion yuan, and China Jinmao with a new inventory value of 60.3 billion yuan, ranking third. "When acquiring land, real estate enterprises are increasingly focusing on core first- and second-tier cities," said Wang Ying, Managing Director of Corporate Ratings, Asia Pacific, at Fitch Ratings. Since Q4 last year, well-performing real estate enterprises have mainly been those state-owned enterprises with substantial land reserves in core first- and second-tier cities. However, real estate enterprises with large land reserves in third- and fourth-tier cities have not significantly benefited from the housing market recovery due to a lack of high-grade sellable resources. Meanwhile, weak sales have led to a continuous decline in operating cash flow, further constraining these enterprises' ability to acquire land in core areas of key cities. At the policy level, promoting the sustained recovery of the market remains an important policy goal for the real estate sector this year. Analysts from the China Index Academy believe that various policies are expected to continue to be implemented at an accelerated pace, with specific policies mainly focusing on urban village renovation, the supply of high-grade housing, and the acquisition of existing commercial housing inventory. "High-quality housing" has also become an important factor in driving market recovery. In recent years, the central government has repeatedly set the direction for the construction of "high-quality housing." In 2025, "high-quality housing" was included in the Government Work Report for the first time, proposing to "adapt to the people's high-grade living needs, improve standards and specifications, and promote the construction of safe, comfortable, green, and intelligent 'high-quality housing'," reflecting the government's high emphasis on the construction of "high-quality housing." On March 31, the Ministry of Housing and Urban-Rural Development issued the national standard "Code for Residential Projects," which sets clear regulations on aspects such as the floor height of residential buildings, sound insulation performance of walls and floor slabs, elevator configuration requirements, and the net height of balcony railings. The code was officially implemented on May 1. At the same time, many localities have issued guidelines or relevant technical regulations for high-grade residential design over the past two years, with some implementation standards higher than the new version of the "Code for Residential Projects" to meet residents' demand for high-grade housing. In early May, the Beijing Municipal Commission of Housing and Urban-Rural Development issued the "2025 Beijing Annual Housing Development Plan," emphasizing the continuous promotion of the stabilization and improvement of the real estate market, vigorously constructing "high-quality housing," and better meeting diversified housing needs. Against the backdrop of policies advocating for "high-quality housing," real estate enterprises have also launched "high-quality housing" product systems. As a representative of the first batch of "high-quality housing" projects in Daxing District, Beijing, Xingchuang proposed the concept of "climate adaptability," considering Beijing's geographical factors to redesign supporting facilities necessary for livability. Its Muchun Villa project in Daxing adopts multiple high technologies to construct the Muchun series of high-quality housing products. "From the perspective of transaction structure, improvement-oriented demand has become an important support for the new housing market, with the proportion of transactions for units above 120 m² in key cities increasing in the first four months," said Wang Ying, Managing Director of Corporate Ratings, Asia Pacific, at Fitch Ratings. The aforementioned analyst from the China Index Academy stated that for enterprises, comprehensively enhancing their overall strength in areas such as cost control, product design, technological adaptation, and market positioning has become an important factor in improving their product competitiveness.

Comprehensive data analysis indicates a further decline in market procurement for lithium battery recycling in May 2025 compared to April 2025. As of April 2025, the total monthly recycling volume (black mass basis) in the SMM recycling market reached 20,592 tonnes, reflecting a month-on-month decrease of approximately 16.2%.