Morning Insight: July 31, 2026

Morning Insight:July 31, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen WuCertification：Z0024232wuyuchen@gtht.com Main Body Iron Ore:Loose Fundamentals Favor Selling into Rallies Medium-to long-term outlook: Iron ore is expected to transition in thesecond half of the year from a market supported by robust hot metalproduction to one increasingly weighed down by recovering supply andrising inventories. As a result, the price center is likely to move lowerthan in the first half of the year. We continue to recommend a sell-on-rallies strategy. Under our base-case scenario, the 62% Fe Iron Ore Indexis expected to trade within USD 85–110/dmt, with the core range centeredat USD 90–105/dmt. As the supply-demand balance becomes increasinglyloose, low-cost producers are expected to displace higher-cost supply,triggering a capacity rationalization cycle characterized by margincompression, production cuts, and ultimately capacity reductions. Themargin-compression phase is typically accompanied by a relatively smoothdownward adjustment in prices. Short-term outlook: Steel demand remains in its seasonal lull and isexpected to stay weak until mid-to-late August. Rising steel inventoriescontinue to generate negative feedback across the steel value chain,which remains the market's primary fundamental headwind. On the macroside, although the recent Politburo meeting emphasized technologyinvestment and new infrastructure development, these sectors are unlikelyto generate a meaningful increase in steel demand in the near term. Assuch, macro expectations are not yet sufficient to provide strong supportfor iron ore prices. Open Interest Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch News Highlights: 1. China's installed new-type energy storage capacity increased 61percent year on year to 153 million kilowatts by the end of June 2026,the National Energy Administration said Thursday. New-type energy storage has become a key technology for facilitating thelarge-scale development and consumption of renewable energy, ensuringreliable electricity supply and improving the safety and stability of thepower system, said Xu Jilin, an official with the administration, at apress conference. A report released by the administration showed that during the 14th Five-Year Plan period (2021-2025), China's installed new-type energy storagecapacity increased from 3 million kilowatts to 136 million kilowatts,roughly doubling each year. Lithium-ion battery storage remained dominant, but other technologieshave also advanced rapidly, according to the report. During the 15th Five-Year Plan period (2026-2030), the administrationwill work to boost technological innovation capacity and raise industrialdevelopment levels in new-type energy storage, while promoting thesector's high-quality development through greater efforts and morepractical measures, Xu said. (Source: Xinhua) 2. China's consumer finance companies issued 581 million personalconsumer loans worth 5.24 trillion yuan (771.81 billion U.S. dollars) in2025, according to a report released by the China Banking Association.Total assets of the sector reached 1.48 trillion yuan last year, up 7.18percent year on year. Outstanding loans rose 6.85 percent last year to1.43 trillion yuan. The report highlighted that consumer finance firms had activelyparticipated in key national initiatives, including consumer goods trade-in programs, rural revitalization and financial services for new urbanresidents. In 2025, the industry rolled out 255 tailored financial products, generating 278.6 billion yuan in new lending and benefiting 38.3 millioncustomers, effectively boosting domestic consumption. (Source: Xinhua) 3. Coal-fired power accounted for 49.7 percent of China's totalelectricity output in the first half of 2026, marking the first time itsshare has fallen below 50 percent and a new milestone in the country'stransition toward a green and low-carbon energy system, official datashowed on Thursday. During the January-June period, China's coal-fired power generationtotaled 2.5 trillion kilowatt-hours (kWh), the National EnergyAdministration (NEA) disclosed at a press conference. The figures reflect the phased progress China has made in expanding non-fossil energy as a substitute for conventional fossil fuel generation,Xing Yiteng, an NEA official, said at the press conference. The NEA data showed that China's installed capacity of wind and solarpower reached a combined 1.95 billion kilowatts by the end of June, up16.8 percent from a year earlier. Amid this capacity expansion, electricity generation from renewableenergy maintained steady growth in the first half of the year, reachingnearly 2 trillion kWh and up about 9 percent year on year, the datashowed. Renewable energy accounted for 41.2 percent of the country's totalelectricity generation during the