摩根士丹利-亚太澳大利亚原材料：中国与矿企-Australia Materials Asia Pacific China and the Miners-20260529

RESEARCH

Morganstanley

May29,202610:08AMGMT

AustraliaMaterials|AsiaPacific

ChinaandtheMiners

Ourmonthlyreportsummarizeskeydata/chartsfromChinatogiveinvestorsquickinsightsintoChina'smacroenvironmentanditsdemandformineralresources.

Chinaview–EnergyShockandWeakerConsumption:OurChinaeconomicsteamnotesthatAprilactivityslowedmoresharplythanexpected,weighedbytheoil

shockimpactingenergy_intensivesectorsandbroad-basedconsumptionweakness,withretailsalesdroppingtoarecordlowex_Covidandpropertyshowingnosignsofstabilizationdespiteselectivegainsintop-tiersecondarymarkets.Whileexport-linkedproduction(EVs,machinery,tech)remainedresilientonAI-ledglobalcapexstrength,theycut2QGDPtrackingby20bpsto4.5%Y,andexpectarecovery

toward5%Yin2Hastheoilshockfadesandexportsstaystrong,although

consumptionislikelytolagamidweaklabourmarkets,fadingpolicysupport,andongoingpropertyadjustment(seehere).

Macro–ProductionDeclinesforMajority:China’sIPwas4.1%YoYinApril(Mar

5.7%);AprilPMIwas50.3(Mar50.4).AprilCPIwas1.2%YoY(Mar1.0%).New

propertystartsfell27.1%YoYinApril(Mar-17.1%YoY)andGFAsoldfell10.3%YoYinApril(Mar-8.0%YoY).OurChinapropertyteamnotesthatwhilesecondaryhomesalesintop-tiercitiesexceededexpectationsinMarch–April,momentumhasslowedsharplyinMay,withdivergencewideningacrosscitiesaslower-tiermarkets

continuetoweakeninbothlistingsandprices.Combinedwithfragilesentimentandfadingpolicysupport,theyremaincautiousontherebound'sdurability,although

near-termdeclinesmaystaymodestonfavorablebaseeffects.FAIwasdown9.4%YoYinApril(Mar+1.6%YoY).Aprilaluminumproductionwasup3.1%YoYto

3.9mnt,reflectingcapacityresumptioninLiaoning.

Commoditiesdata–SteelExportsSlowed:SteelexportsinAprildecreased9%YoYto9.5mnt,andcrudesteeloutputwasdown2.8%YoYinApril,whiledomesticsteelapparentconsumptionfell3.1%YoY.China’sironoreimportswereup1%YoYinAprilto104mnt.Portinventoriesstartedtodrawslowlyduringthemonthbutremainelevated.

Howarewepositioned?BHP.AXremainsourpreferreddiversifiedexposure,

supportedbylow-costWAIOcashgenerationwithaccretive330Mtpaexpansion

optionality,CopperSAvaluationupside,potentialforfurtherassetcrystallisation,andstrongerlongtermgrowthprofilethanpeers(seeourrecentinsightnote

here).Ourironoreorderofpreference:BHP.AX(OW),DRR.AX(OW),RIO.AX

(EW),thenFMG.AX(UW).Incoal,WHC.AX(OW)ismostpreferred(#1inourOOP,seeour2QStrategy),supportedbypotentialgas-to-coalswitchinginNorthAsiaandtightmetcoalfollowingthemajorcoalmineaccidentinShanxi,triggeringsafety

inspections.WeremainOWS32.AXforbasemetalsexposure,withaluminium

supportedbysupplydisruption,highenergypricesandaslowerIndonesianramp.Inlithium,weseesomemeritintakingprofits;weareEWPLS,remainingpreferred

overIGO(UW),withtheGreenbushesLOMplanstillakeyuncertainty.

IDEA

MoRGANSTANLEyAusTRALiALimiTED+RahulAnand,CFA

EquityAnalyst

R.Anand@

+6129770-1136

MichaelAStancliff

ResearchAssociate

MichaelStancliff@morganstanleycom

+6129770-9253

AusTRALiAMATERiALs

AsiaPacific

IndustryViewAttracti∨e

RecentResearch:

AsiaEnergySecurityandAI:EnergyMeets

Compute:SupercycleRecharges(21May2026)

MineralResourcesLimited:TripNotes:WodginaSiteVisit(20May2026)

BHPGroupLtd:RisingdatacentrebuildfavoursBHP'scommoditymix–butthere'splentyof

alphatoo(13May2026)

BossEnergyLtd:UpdatingEstimatesandPriceTarget(1May2026)

MineralResourcesLimited:UpdatingEstimates(30Apr2026)

South32Ltd:Hermosa:Highercapexsomewhatoffsetbylongerlife.Alargeoverhangis

removedwithmodestimpactexpected.(29Apr2026)

MorganStanleydoesandseekstodobusinesswith

companiescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanley

Research.InvestorsshouldconsiderMorganStanley

Researchasonlyasinglefactorinmakingtheirinvestmentdecision.

Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.

+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoFINRArestrictionson

communicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.

2

Morganstanley

RESEARCH

IDEA

IndustrialProductionDataandTradeData

IPdata:

Newstartsweredown27.1%YoYinApril,andGFAsoldfell10.3%YoY,while

propertycompletionsweredown19.0%YoY.OurChinapropertyteamnotesthatwhilesecondaryhomesalesintop-tiercitiesexceededexpectationsinMarch–

April,momentumhasslowedsharplyinMay,withdivergencewideningacross

citiesaslower-tiermarketscontinuetoweakeninbothlistingsandprices.

Combinedwithfragilesentimentandfadingpolicysupport,theyremaincautiousonthedurabilityoftherebound,althoughnear-termdeclinesmaystaymodestonfavorablebaseeffects.

Domesticsteelapparentconsumptiondecreased3.1%YoYinApril,togetherwitha9%declineinnetexportswhilekeysteelmillsproductionwasdown5.7%YoYinApril.

Aprilaluminumproductionwasup3.1%YoY,to3.9mnt.TheslightMoMincreaseinproductionvolumewasmainlyduetocapacityresumptioninLiaoningprovince.Currently,thetotaloperatingcapacityinChinahasreached45.3mnt,whichisattheceilingimposedbyChinaısgovernmentwithlimitedupside.

Aprilcoalproductionwasdown1%YoYanddown12.5%MoMto386mnt.TheMoMdropincoalvolumemainlyreflectedtheseasonaldecline,asthewinter

heatingseasonendedinMarch.Totalcoalproductionincreased1.2%YoYYTD.Thermalpowergenerationrose3.1%YoYinAprilto463.8bnkWh,accountingfor62%oftotalpowergenerationvs.66%inMar-26ashydropowergeneration

graduallypickedupmovingtowardstherainyseason.

Tradedata:

Ironoreimportswereup1%YoYinAprilto104Mt.PortinventoriesinChina

startedtodrawslowlyduringthemonthbutremainelevated.Pigironproductionatsteelmillsisdown4%YTD.

Coalimportsdecreased13%YoYand15%MoMinAprilto33Mt.TotalYTDcoalimportsin4M26weredownby2%YoYto149mnt.Thedeclineincoalimportsreflectedtheseasonaldeclineindemandinslowconsumptionseasonandhigherimportedcoalprices.

Thefollowingmaterialwaspublishedinareporttitled:ChinaMaterials:AprillPData:ProductionDeclinesforMajority(18May2026)

Property–Newstartsfell27.1%YoYinApril(vs.-17.1%YoYinMarch).GFAsoldfell

10.3%YoY(vs.-8%YoYinMarch)andpropertycompletionsweredown19%YoY(vs.-

19.3%YoYinMarch),allbasedonrestateddatafor2025.Whilesecondaryreal-timehomesalesinselecthigh-tiercitiesbeatmarketexpectationsinMarch-April,ourChinapropertyteamnotesarapiddecelerationsofarinMay.Also,theynotefurtherdivergenceamongcitiesintermsofsecondarylistingvolumeandlistingprices,withselecttier-2andlow-tiercitiescontinuingtoworsen.Togetherwithstill-fragileresidentsentimentanddiminishingeffectsofrecentcity-levelpolicies,theteamremainsprudentaboutthedurabilityofthe

Morganstanley

RESEARCH

IDEA

salesrebound,althoughthedropsmayremainnarrowincomingmonthsonfavorablebases.

FAIwasdown9.4%YoYinApril26(vs.+1.6%YoYinMarch).HighwayFAIslipped18.1%YoYinApril.

Crudesteeloutputwas-2.8%YoYinApril(vs.-6.3%YoYinMarch).4M26productionwasdown4.1%YoY.Weestimatedomesticsteelapparentconsumptionwasdown3.1%inApril(vs.-7.1%YoYinMarch),togetherwitha9%declineinnetexports.

Cementproductionwas-10.8%YoYinApril(vs.-21%YoYinMarch).4M26productionwasdown8.6%YoY.OutputYoYdeclineisnarrowinginMayduetolowerbasenumbers.ThecementpricehikesineastChinacontinuedtodeclineinApril-Mayduetoweak

downstreamdemandandwetweatherconditions.

Aluminumproductionwasup3.1%YoYand0.5%MoMto3.9mntinApr26.TheslightMoMincreaseinproductionvolumewasmainlyduetocapacityresumptioninLiaoning

province.Currently,thetotaloperatingcapacityinChinahasreached45.3mnt,whichisattheceilingimposedbyChina'sgovernmentwithlimitedupside.Constrainedbythelimitedsupplyincrease,aluminumsmelterssawsolidmargins>Rmb8,600/tinApril.

Coalproductionwasdown1%YoYanddown12.5%MoMto386mntinApril2026.TheMoMdropincoalvolumemainlyreflectedtheseasonaldecline,asthewinterheating

seasonendedinMarch.Totalcoalproductionincreased1.2%YoYYTD.Thermalpowergenerationrose3.1%YoYinAprilto463.8bnkWh,accountingfor62%oftotalpowergenerationvs.66%inMar-26ashydropowergenerationgraduallypickedupmovingtowardstherainyseason.

Exhibit1:April2026industrialproductiondata

Apr2026ProductionData

Growthratetrend

Apr

2026

MoM

Apr

2026

YoY

Apr

2026

Mar

2026

Jan+Feb

2026

Dec25

Nov25

Oct25

Sep25

Aug25

YoY

Jul25

Jun25

May25

Apr25

2025

Crudesteel(Mnt)

83.6

-3.9%

-2.8%

-6.3%

-3.6%

-10.3%

-10.9%

-12.1%

-4.6%

-0.7%

-4.0%

-9.2%

-6.9%

0.0%

-4.4%

Finishedsteel(Mnt)

122.6

-6.4%

-1.7%

-2.3%

-1.1%

-3.8%

-2.6%

-0.9%

5.1%

9.7%

6.4%

1.8%

3.4%

6.6%

3.1%

Cement(Mnt)

145.7

18.4%

-10.8%

-21.0%

6.8%

-6.6%

-8.2%

-15.8%

-8.6%

-6.2%

-5.6%

-5.3%

-8.1%

-5.3%

-6.9%

Aluminum(Mnt)

3.9

0.5%

3.1%

2.7%

3.0%

3.0%

2.5%

0.4%

1.8%

-0.5%

0.6%

3.4%

5.0%

4.2%

2.4%

Glass(mnwtcases)

72.8

-4.6%

-7.9%

-6.6%

-3.5%

3.4%

3.7%

3.3%

-9.7%

-2.0%

-3.4%

-4.5%

-5.7%

-4.6%

-3.0%

Coalproduction(Mnt)

385.6

-12.5%

-1.0%

0.0%

-0.3%

-1.0%

-0.5%

-2.3%

-1.8%

-3.2%

-3.8%

3.0%

4.2%

3.8%

1.2%

Thermalpowergeneration(kWHbn)

463.8

-12.9%

3.1%

4.2%

3.3%

-3.2%

-4.2%

7.3%

-5.4%

1.7%

4.3%

1.1%

1.2%

-2.3%

-1.0%

FAI,%YoY

-9.4%

-11.0ppt

-9.4%

1.6%

-4.4%

-15.1%

-12.0%

-12.2%

-7.1%

-7.1%

-5.3%

-0.1%

2.7%

3.5%

-3.8%

IP,%,YoY

4.1%

-1.6ppt

4.1%

5.7%

6.3%

5.2%

4.8%

4.9%

6.5%

5.2%

5.7%

6.8%

5.8%

6.1%

5.9%

Property

FSstarts(mnsqm)

35.3

-33.3%

-27.1%

-17.1%

-23.1%

-19.3%

-27.7%

-29.3%

-15.0%

-19.8%

-15.2%

-9.5%

-18.7%

-22.3%

-20.5%

FSsold(mnsqm)

57.3

-44.0%

-10.3%

-8.0%

-13.5%

-16.6%

-17.9%

-19.6%

-11.9%

-11.0%

-8.4%

-6.6%

-4.6%

-2.9%

-9.5%

FScompletions(mnsqm)

21.0

-39.6%

-19.0%

-19.3%

-27.9%

-18.4%

-25.4%

-27.9%

0.4%

-21.3%

-29.4%

-2.2%

-19.1%

-28.2%

-18.2%

Investment(Rmbbn)

InfrastructureFAI

624.9

-22.9%

-20.1%

-11.7%

-10.3%

-36.8%

-31.4%

-23.2%

-21.3%

-19.9%

-17.1%

-12.4%

-12.4%

-11.5%

-17.4%

Highway(Rmbbn)*

280.6

-46.3%

-18.1%

5.6%

-0.6%

-18.4%

-8.7%

-15.4%

0.9%

-11.6%

-16.6%

3.4%

1.1%

-2.7%

-6.0%

Source:NationalBureauofStatistics,MorganStanleyResearch.*Note:RailwayandhighwayFAIgrowthisrebased.

Thefollowingmaterialwaspublishedinourrecentreport:ChinaMaterials:AprilTrade

Data:AluminiumExportsStarttoRise(10May2026)

SteelexportsinAprildecreased9%YoYbutimproved4%MoMto9.5Mt,whichisslowerthanweexpected.WethinksteelbilletsexportmaygrowquicklyinApril.DailyproductionofCISAmembermillsdecreased5.7%YoYinApril(vs-6.1%YoYinMarch).

China’simportsofcopperandcopperproducts(refined+alloys)were452ktinApril,up9%MoMand3%YoY.ApullbackinthecopperpriceinMarchencouragedChinese

buyerstore-engage,withtheimportarbitrageopeningbriefly.Despitethehigherimports,

MoRGANSTANLEyREsEARcH3

4

Morganstanley

RESEARCH

IDEA

inventoriesdrewstronglyduringthemonth,potentiallydrivenbydownstreamrestocking.TheYangshanpremiumheldbetween$60and$75/tduringthemonth.Copperoreand

concentrateimportsfell11%MoMand20%YoYto2.35mlntonnesastreatmentchargesfell,althoughstrongsulphuricacidpricessupportedsmeltermargins.

Aluminiumandproductexportsrose23%MoMand15%YoYto598ktinApriltothehighestlevelsinceNovember2024.SupplydisruptionsintheMiddleEastdroveex-

ChinatightnessandtookLMEpriceshigher,wideningtheexportarbitrage.Despitethesestrongexports,Chinesealuminiuminventoriesrosetoall-timehighs,andhavenotyet

startedtodraw.

China’sironoreimportstotalled104MtinApril,down1%MoMandup1%YoY.Port

inventoriesinChinastartedtodrawslowlyduringthemonthbutremainelevated.Pigironproductionatsteelmillsisdown4%YTD.ChinaliftedthebanonprocuringBHPıs

seabornecargoesincludingpreviouslyrestrictedproductsduringthemonthwhichmayeasesomeofthetightness.

Coalimportsweredown13%YoYand15%MoMinApril2026,to33mnt.TotalYTD

coalimportsin4M26weredownby2%YoYto149mnt.Thedeclineincoalimport

reflectedtheseasonaldeclineindemandinslowconsumptionseasonandhigherimportedcoalprices.MaycoalimportsmayseesomereboundMoMonrestockingatpowerplantsinChinatopreparefortheupcomingpeakconsumptioninsummer.Theimproveddemandwouldsupportcoalpricestofurthergoupinthenearterm.

Exhibit2:China:April2026tradedata

Apr2026Tradedata

Apr2025Apr

2026

Apr26

Mar26

Jan+Feb

2026

Dec25

Nov25

Oct25

Sep25

Aug25

Jul25

Jun25

May25

Apr25

2026YTD

FinishedSteelImports(kt)

465

512

827

517

496

503

548

500

452

470

481

522

1,804

Change%,YoY

-11%

2%

-21%

-17%

5%

-6%

-1%

-2%

-10%

-18%

-24%

-21%

-13%

Change%,MoM

-9%

39%

NA

4%

-1%

-8%

10%

11%

-4%

-2%

-8%

4%

NA

FinishedSteelExports(kt)

9,498

9,135

15,591

11,301

9,980

9,782

10,465

9,510

9,836

9,678

10,578

10,462

34,214

Change%,YoY

-9%

-13%

-8%

16%

8%

-13%

3%

0%

26%

11%

10%

13%

-10%

Change%,MoM

4%

17%

NA

13%

2%

-7%

10%

-3%

2%

-9%

1%

0%

NA

IronOreImports(mnt)

104

105

210

120

111

111

116

105

105

106

98

103

419

Change%,YoY

1%

11%

10%

6%

9%

7%

12%

4%

2%

9%

-4%

1%

8%

Change%,MoM

-1%

7%

NA

8%

-1%

-4%

11%

1%

-1%

8%

-5%

10%

NA

CopperandProductsImports(kt)

452

416

700

437

427

438

485

425

480

464

427

438

1,567

Change%,YoY

3%

-11%

-16%

-22%

-19%

-13%

1%

2%

10%

6%

-17%

0%

-10%

Change%,MoM

9%

32%

NA

2%

-3%

-10%

14%

-11%

3%

9%

-3%

-6%

NA

CopperOres&ConcentratesImports(kt)

2,352

2,630

4,934

2,704

2,526

2,451

2,587

2,759

2,560

2,350

2,395

2,924

9,915

Change%,YoY

-20%

10%

5%

7%

13%

6%

6%

7%

18%

2%

6%

25%

-1%

Change%,MoM

-11%

14%

NA

7%

3%

-5%

-6%

8%

9%

-2%

-18%

22%

NA

AluminumandProductsExports(kt)

598

485

971

545

570

503

521

534

542

489

547

518

2,053

Change%,YoY

15%

-4%

13%

8%

-15%

-13%

-7%

-10%

-8%

-20%

-3%

0%

9%

Change%,MoM

23%

13%

NA

-4%

13%

-3%

-2%

-1%

11%

-11%

6%

2%

NA

CoalImports(mnt)

33

39

77

59

44

42

46

43

36

33

36

38

149

Change%,YoY

-13%

1%

1%

12%

-20%

-10%

-3%

-7%

-23%

-26%

-18%

-16%

-2%

Change%,MoM

-15%

26%

NA

33%

6%

-9%

8%

20%

8%

-8%

-5%

-2%

NA

Source:GeneralAdministrationofCustoms,MorganStanleyResearch.

MoRGANSTANLEyREsEARcH5

Ehibit5Chiti

Morganstanley

RESEARCH

IDEA

China–MacroMonitor

•AprilPMI+50.3(Mar+50.4).AprilIndustrialproductionwas+4.1%YoY(Mar+5.7%).

•AprilCPIrises1.2%YoY(1%Mar),whilePPIincreased2.8%YoY(0.5%Mar).

•Powergenerationrises2.6%YoYinAprilvs.ariseof1.4%YoYinMar.

•M2supplyinAprilwasup8.6%YoY(Mar+8.5%YoY).

Exhibit3:ChinesePMIandIP

PMI

65

60

55

50

45

40

35

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

Oct-13

Apr-14

Oct-14

Apr-15

Oct-15

Apr-16

Oct-16

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19

Apr-20

Oct-20

Apr-21

Oct-21

Apr-22

Oct-22

Apr-23

Oct-23

Apr-24

Oct-24

Apr-25

Oct-25

Apr-26

Apr-26PMI:50.3

Apr-26IP:4.1%

PMI(LHS)IndustrialProduction(RHS)

IP

20%

15%

10%

5%

0%

-5%

-10%

-15%

Source:Refinitiv,MorganStanleyResearch.

PowerGeneration(YoY)

x:nesepowergeneraon

40%

30%

20%

10%

0%

-10%

-20%

Apr-26PowerGeneration:2.6%

Apr-01

Feb-02

Dec-02

Oct-03

Aug-04

Jun-05

Apr-06

Feb-07

Dec-07

Oct-08

Aug-09

Jun-10

Apr-11

Feb-12

Dec-12

Oct-13

Aug-14

Jun-15

Apr-16

Feb-17

Dec-17

Oct-18

Aug-19

Jun-20

Apr-21

Feb-22

Dec-22

Oct-23

Aug-24

Jun-25

Apr-26

Source:Refinitiv,MorganStanleyResearch.

CPIandPPI(YoY)

Oct-03

Jul-04

Apr-05

Jan-06

Oct-06

Jul-07

Apr-08

Jan-09

Oct-09

Jul-10

Apr-11

Jan-12

Oct-12

Jul-13

Apr-14

Jan-15

Oct-15

Jul-16

Apr-17

Jan-18

Oct-18

Jul-19

Apr-20

Jan-21

Oct-21

Jul-22

Apr-23

Jan-24

Oct-24

Jul-25

Apr-26

Exhibit4:ChineseCPIandPPI

17%

13%

9%

5%

1%

-3%

-7%

-11%

Apr-26CPI:1.2%

Apr-26PPI:2.8%

CPI(YoY)PPI(YoY)

Source:Refinitiv,MorganStanleyResearch.

Exhibit6:ChinesenewloansandM2supply

NewLoans(RMBbn)

M2SupplyYoY

May-03

Apr-04

Mar-05

Feb-06

Jan-07

Dec-07

Nov-08

Oct-09

Sep-10

Aug-11

Jul-12

Jun-13

May-14

Apr-15

Mar-16

Feb-17

Jan-18

Dec-18

Nov-19

Oct-20

Sep-21

Aug-22

Jul-23

Jun-24

May-25

Apr-26

5,000

4,000

3,000

2,000

1,000

0

30%

25%

20%

15%

10%

5%

Apr-26NewLoans:-10bnApr-26M2:8.6%

NewLoans,RmnBn(LHS)M2supply(YoY)(RHS)

Source:Refinitiv,MorganStanleyResearch.

6

Morganstanley

RESEARCH

IDEA

Exhibit7:China–Excavatorsales

thunitsExcavatorSalesYoY-RHS

30

25

20

15

10

5

0

200%

150%

100%

50%

0%

-50%

-100%

Feb-03

Feb-04

Feb-05

Feb-06

Feb-07

Feb-08

Feb-09

Feb-10

Feb-11

Feb-12

Feb-13

Feb-14

Feb-15

Feb-16

Feb-17

Feb-18

Feb-19

Feb-20

Feb-21

Feb-22

Feb-23

Feb-24

Feb-25

Feb-26

Source:CEIC,MorganStanleyResearch.

Exhibit9:Transportationinfrastructurenewordersreportedbylargeinfrastructureconstructiongroups

RmbbnTransportationInfrastructureNewOrderTrend

3,000

2,500

2,000

1,500

1,000

500

-

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25

4Q25

CRCCCRGCCCCSubtotalYoY

60%

40%

20%

0%

-20%

-40%

Source:Companydata,MorganStanleyResearch.

Exhibit8:China–infrastructurespending

Mar-10

Nov-10

Jul-11

Mar-12

Nov-12

Jul-13

Mar-14

Nov-14

Jul-15

Mar-16

Nov-16

Jul-17

Mar-18

Nov-18

Jul-19

Mar-20

Nov-20

Jul-21

Mar-22

Nov-22

Jul-23

Mar-24

Nov-24

Jul-25

Mar-26

-0.4-30%

InfrastructureFAI(LHS)Steelapparentdemand(RHS)

YoY(3mma)

2

1.6

1.2

0.8

0.4

0

YoY(3MMA)

50%

30%

10%

-10%

ChinaInfrastructureFAIvsSteelDemand

Source:CEIC,MorganStanleyResearch.

Exhibit10:BuildingconstructionnewordertrendforCSCECandMCC

RmbbnBuildingConstructionNewOrderTrend

1,600

1,400

1,200

1,000

800

600

400

200

-

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25

4Q25

CSCECMCCSubtotalYoY

100%

80%

60%

40%

20%

0%

-20%

Source:Companydata,MorganStanleyResearch.

MoRGANSTANLEyREsEARcH7

Morganstanley

RESEARCH

IDEA

China–PropertyUpdate

MixedAprilData

HomesalesdeclinesnarrowedinAprilonalowbase.Weexpecttherecent

strengthinsecondaryhomesalestomoderateincomingmonths,givenstill-

elevatedinventory,weakbuyersentiment,andlimitedimprovementinhouseholdincomeandleverage.Werecommendwaitingforgreaterclarityandremaining

selectiveonstockpicks.

See:ChinaProperty:MonthlyTracker:MixedAprilData;WeStayPrudentonSalesRecovery(21May2026)

Exhibit11:China–Propertysalesandnewstarts

(thunit)

60

50

40

30

20

10

Salesunit-Tier1

Salesunity-y-Tier1

Exhibit12:ChineseProperty–MonthlyunitssoldinTier1cities

Mar-10

Sep-10

Mar-11

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Sep-15

Mar-16

Sep-16

Mar-17

Sep-17

Mar-18

Sep-18

Mar-19

Sep-19

Mar-20

Sep-20

Mar-21

Sep-21

Mar-22

Sep-22

Mar-23

Sep-23

Mar-24

Sep-24

Mar-25

Sep-25

Mar-26

2011-02

2011-09

2012-04

2012-11

2013-06

2014-01

2014-08

2015-03

2015-10

2016-05

2016-12

2017-07

2018-02

2018-09

2019-04

2019-11

2020-06

2021-01

2021-08

2022-03

2022-10

2023-05

2023-12

2024-07

2025-02

2025-09

2026-04

1

0.8

0.6

0.4

0.2

0

-0.2-0.4-0.6

-0.8

-

3mmaYoYChinapropertysalesandconstructionstarts

120%

80%

40%

0%

-40%

-80%

Propertysales(3mma)Propertystarts(3mma)

Source:CREIS,MorganStanleyResearch.

Source:CEIC,MorganStanleyResearch.

Exhibit13:ChineseProperty–MonthlyunitssoldinTier2cities

Exhibit14:ChineseProperty–MonthlyunitssoldinTier3cities

1

0.8

0.6

0.4

0.2

0

-0.2-0.4-0.6

-0.8

140

120

100

80

60

40

20

-

(thunit)Salesunit-Tier3

Salesunity-y-Tier3

(thunit)Salesunit-Tier2

1

0.8

0.6

0.4

0.2

0

-0.2-0.4-0.6

-0.8

350

300

250

200

150

100

50

-

Salesunity-y-Tier2

2013-04

2013-10

2014-04

2014-10

2015-04

2015-10

2016-04

2016-10

2017-04

2017-10

2018-04

2018-10

2019-04

2019-10

2020-04

2020-10

2021-04

2021-10

2022-04

2022-10

2023-04

2023-10

2024-04

2024-10

2025-04

2025-10

2026-04

2013-04

2013-10

2014-04

2014-10

2015-04

2015-10

2016-04

2016-10

2017-04

2017-10

2018-04

2018-10

2019-04

2019-10

2020-04

2020-10

2021-04

2021-10

2022-04

2022-10

2023-04

2023-10

2024-04

2024-10

2025-04

2025-10

2026-04

Source:CREIS,MorganStanleyResearch

Source:CREIS,MorganStanleyResearch

8

Morganstanley

RESEARCH

IDEA

Exhibit15:ChineseProperty–Totalinventorymonths

(mnsqm)

600

500

400

300

200

100

InventoryGFA-Total

Inventorymonths-Total(RHS)

Averageinventorymonths-Total(RHS)

35

30

25

20

15

10

5

0

-

2013-04

2013-10

2014-04

2014-10

2015-04

2015-10

2016-04

2016-10

2017-04

2017-10

2018-04

2018-10

2019-04

2019-10

2020-04

2020-10

2021-04

2021-10

2022-04

2022-10

2023-04

2023-10

2024-04

2024-10

2025-04

2025-10

2026-04

Source:CREIS,MorganStanleyResearch.

Exhibit17:ChineseProperty–YTDsales

140%

120%

100%

80%

60%

40%

20%

0%

-20%-40%

-60%

Totalsalesvolumey-y

2009-03

2009-09

2010-03

2010-09

2011-03

2011-09

2012-03

2012-09

2013-03

2013-09

2014-03

2014-09

2015-03

2015-09

2016-03

2016-09

2017-03

2017-09

2018-03

2018-09

2019-03

2019-09

2020-03

2020-09

2021-03

2021-09

2022-03

2022-09

2023-03

2023-09

2024-03

2024-09

2025-03

2025-09

2026-03

Source:NBS,CEIC,MorganStanleyResearch.

Exhibit16:ChineseProperty–YTDnewstarts,bycitytier

80%

60%

40%

20%

0%

-20%-40%

-60%

Totalnewstartsy-y

2009-03

2009-09

2010-03

2010-09

2011-03

2011-09

2012-03

2012-09

2013-03

2013-09

2014-03

2014-09

2015-03

2015-09

2016-03

2016-09

2017-03

2017-09

2018-03

2018-09

2019-03

2019-09

2020-03

2020-09

2021-03

2021-09

2022-03

2022-09

2023-03

2023-09

2024-03

2024-09

2025-03

2025-09

2026-03

Source:NBS,CEIC,MorganStanleyResearch.Note:Thetieredcitiesincludefourtier1cities:Beijing,

Shanghai,Guangzhou,Shenzhen;15tier2cities:Fuzhou,Nanchang,Tianjin,Chongqing,Chengdu,

Hangzhou,Nanjing,Wuhan,Suzhou,Dalian,Shenyang,Qingdao,Jinan,Xiamen,Xi'an;andninetier3cities:Dongguan,Guiyang,Wenzhou,Baotou,Bangbu,Huizhou,Sanya,Zhongshan,Shaoguan.

Exhibit18:ChineseProperty–YTDcompletion

80%

60%

40%

20%

0%

-20%

-40%

Totalcompletiony-y

2009-03

2009-09

2010-03

2010-09

2011-03

2011-09

2012-03

2012-09

2013-03

2013-09

2014-03

2014-09

2015-03

2015-09

2016-03

2016-09

2017-03

2017-09

2018-03

2018-09

2019-03

2019-09

2020-03

2020-09

2021-03

2021-09

2022-03

2022-09

2023-03

2023-09

2024-03

2024-09

2025-03

2025-09

2026-03

Source:NBS,CEIC,MorganStanleyResearch.

MoRGANSTANLEyREsEARcH9

Morganstanley

RESEARCH

IdEA

China–SteelandlronOreUpdate

AprilRegionalPricesTighteninSpiteofRisingChinaExports

China'sAprilfinished-steelnetexportsrose~8%MoMday-adjustedto9.0mt

(~110mtpa),butremain~9%lowerYoY.Europeisincreasinglyinsulatedasimportsareconstrained,regionalHRCpremiumswidenandCBAM/safeguardsreinforce

pricefloorsandEBITDA/tupside.

See:ChinaSteelExports:April-RegionalPricesTighteninSpiteofRisingChinaExports(11May2026)

Exhibit19:ConsumptionofsteelinChina

2025MSeChinaSteelDemandDrivers

property14%

Others,11%Whitegoods,4%

Shipbuilding,5%

Residential

Otherproperty,10%

Auto,9%

frastructure,17%

In

,

Machinery,30%

Source:Antaike,MorganStanleyResearch(MSe)

Exhibit20:Steelproductinventoryatdistributors

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

Oct-13

Apr-14

Oct-14

Apr-15

Oct-15

Apr-16

Oct-16

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19

Apr-20

Oct-20

Apr-21

Oct-21

Apr-22

Oct-22

Apr-23

Oct-23

Apr-24

Oct-24

Apr-25

Oct-25

Apr-26

mntonsSteelproductsinventoryvs.

DaysofConsumptionatDistributors(Mysteel)

1620

1215

810

45

00

LongProducts(LHS)Flat