Guotai Haitong: Retail sales of passenger cars exceed expectations, and steel prices continue to rebound.

Guotai Junan Securities released a research report stating that the passenger car market continues to be prosperous, with retail sales in June exceeding expectations. However, the pressure of inventory on dealers is increasing marginally, and the sustainability of the prosperity still needs to be observed. The prosperity of summer service consumption is somewhat differentiated, with tourism demand continuing to grow, but movie box office revenue showing a significant weakening trend. Domestic consumption momentum still needs to be boosted. The decline in new home sales is expanding, and demand for construction materials is weakening marginally. In anticipation of anti-"involution" policies, steel prices continue to rise, but cement prices have clearly declined as the real estate demand gap widens. After the expectation of supply contraction diminishes, prices of construction resources may face adjustment pressure. The automobile and chemical industries have seen a slight increase in operating rates, possibly driven by improved downstream demand. The rise in petroleum asphalt production may indicate a quicker pace of infrastructure construction.