Core Viewpoint - The steel industry has seen a profit rebound in the first half of the year, driven by cost reductions, export boosts, and proactive cost-cutting measures by companies, with self-discipline in production being a key factor for profit improvement [1][4][6]. Group 1: Company Performance - Several listed steel companies have issued positive performance forecasts for the first half of the year, with notable increases in net profits: - Shougang Co. expects a net profit of 642 million to 672 million yuan, a year-on-year increase of 62.62%-70.22% [2] - Minmetals Development anticipates a net profit of 107 million yuan, up 111% [2] - Liugang Co. projects a net profit of 340 million to 400 million yuan, a staggering increase of 530%-641% [2] - Fangda Special Steel expects a net profit of 380 million to 430 million yuan, an increase of 133.33%-164.03% [2] - Other companies like Xinyu Steel, Shandong Steel, and others forecast a turnaround in profitability for the first half of 2025 [2]. Group 2: Industry Trends - The steel industry is experiencing a reduction in production and structural adjustments, with weak steel prices prevailing [2][4]. - The overall profit for the black metal smelting and rolling industry from January to May reached 31.69 billion yuan, better than the 29.19 billion yuan for the entire year of 2024 [4]. - The self-discipline in production among steel companies is seen as a core factor for profit improvement, despite ongoing supply-demand structural contradictions [4][5]. Group 3: Future Outlook - The outlook for steel prices in the second half of the year is uncertain, with expectations of limited upward movement due to weak domestic demand and potential challenges in maintaining high export levels [6][7]. - Analysts suggest that self-discipline in production will remain a critical variable influencing price trends, with a focus on quality and efficiency rather than merely high production volumes [7][8]. - The industry is urged to enhance integration, improve industry concentration, and phase out inefficient production capacities to achieve high-quality development [8].

Group 1 - The special steel concept index declined by 0.81%, ranking among the top declines in the concept sector as of July 16 [1] - Within the special steel sector, major decliners included Shengde Xintai, Anyang Iron & Steel, and Hualing Steel, while notable gainers were Wuchan Jinlun, Fushun Special Steel, and Beijing Lier, with increases of 4.72%, 2.53%, and 2.35% respectively [1] - The special steel sector experienced a net outflow of 508 million yuan from main funds today, with 28 stocks seeing net outflows, and 8 stocks with outflows exceeding 30 million yuan [2] Group 2 - The top net outflows in the special steel sector were led by Hualing Steel with a net outflow of 85.53 million yuan, followed by Baogang Co., Hangang Co., and Guangda Special Materials with outflows of 75.19 million yuan, 71.96 million yuan, and 49.04 million yuan respectively [2][3] - Conversely, the stocks with the highest net inflows included Fushun Special Steel, Wuchan Jinlun, and New Steel Casting, with net inflows of 53.57 million yuan, 17.73 million yuan, and 13.43 million yuan respectively [2][3] - The trading volume and turnover rates varied among the stocks, with Hualing Steel showing a turnover rate of 2.26% and a decline of 3.41%, while Wuchan Jinlun had a turnover rate of 12.36% with a gain of 4.72% [3]

Core Viewpoint - The steel industry is experiencing pressure from weak demand and high costs, leading to a focus on policy-driven capacity optimization to alleviate profitability issues [1][5]. Group 1: Market Performance - The Shenyin Wanguo Steel Index has rebounded by 11.86% since June 23, while the Wind All A Index increased by 6.53% during the same period [1]. - In July, the Shenyin Wanguo Steel Index rose by 9.31%, marking the largest monthly increase since October 2024, with 21 stocks in the steel sector rising over 10% [4]. Group 2: Company Earnings Forecasts - Eight steel companies have released their mid-year earnings forecasts, with Shougang Co. expecting a net profit of 642 to 672 million yuan, a year-on-year increase of 62.62% to 70.22% [3]. - Shandong Steel anticipates a net profit of 12.71 million yuan for the first half of the year, a year-on-year increase of 98.1 million yuan [2]. - Fushun Special Steel and Hangang Co. are expected to report losses, with Fushun projecting a loss of 260 to 300 million yuan, a year-on-year decrease of 214.06% to 231.6% [3]. Group 3: Industry Challenges - The steel industry has been in a downward cycle for four years, with approximately 30% of steel companies still reporting losses as of the latest financial reports [5]. - The demand for steel, particularly from the real estate sector, has significantly declined, with demand dropping from 377 million tons in March 2020 to 215 million tons in 2024, a decrease of 42.9% [5]. - The focus on cost reduction has become prevalent among steel companies, with raw material prices significantly impacting profitability [5]. Group 4: Policy and Structural Changes - Recent central government meetings have emphasized the need to eliminate outdated production capacity, strengthening expectations for supply contraction in the steel industry [4][6]. - The current round of "anti-involution" policies aims to optimize supply and demand dynamics, with a focus on differentiated control of production based on efficiency and environmental standards [6].

Investment Rating - The report maintains a "Buy" recommendation for the steel sector, highlighting strong price performance and potential recovery in profitability for steel companies [5][6]. Core Insights - The "anti-involution" policy continues to influence the market, leading to stronger expectations for supply-side constraints and supporting higher steel prices [5]. - As of July 11, 2025, steel prices have increased, with notable rises in various categories such as rebar and hot-rolled steel [3][11]. - The report indicates a decrease in steel production and inventory levels, suggesting a tightening supply situation [4][5]. Price Summary - As of July 11, 2025, the prices for key steel products are as follows: - Rebar (20mm HRB400): 3,240 CNY/ton, up 60 CNY/ton from last week - High-line (8.0mm): 3,410 CNY/ton, up 50 CNY/ton - Hot-rolled (3.0mm): 3,350 CNY/ton, up 60 CNY/ton - Cold-rolled (1.0mm): 3,680 CNY/ton, up 70 CNY/ton - Common medium plate (20mm): 3,330 CNY/ton, up 10 CNY/ton [3][11][12]. Production and Inventory - As of July 11, 2025, total steel production for the five major categories was 8.73 million tons, a decrease of 124,400 tons week-on-week [4]. - Total social inventory of the five major steel products decreased by 20,200 tons to 9.1278 million tons, while steel mill inventory increased by 17,700 tons to 4.2557 million tons [4]. Profitability Analysis - The report notes fluctuations in steel profitability, with rebar, hot-rolled, and cold-rolled steel margins changing by -14 CNY/ton, -13 CNY/ton, and +33 CNY/ton respectively week-on-week [3][4]. Investment Recommendations - The report recommends several companies based on their performance and market position: - For flat steel: Baosteel, Hualing Steel, Nanjing Steel - For special steel: Xianglou New Materials, CITIC Special Steel, Yongjin Co. - For pipe materials: Jiuli Special Materials, Youfa Group, Wujin Stainless Steel - Additionally, it suggests paying attention to high-temperature alloy companies like Fushun Special Steel [5].

Core Viewpoint - Fushun Special Steel (600399) experienced a trading halt with a daily increase limit, showing significant trading activity and net buying from various brokerage firms [2][3]. Trading Performance - The stock reached a daily trading limit with a turnover rate of 9.24%, total transaction value of 1.016 billion yuan, and a price fluctuation of 10.90% [2]. - The stock was listed on the Shanghai Stock Exchange for a daily price deviation of 10.04%, with a net sell of 1.0788 million yuan from the Shanghai-Hong Kong Stock Connect [2]. Brokerage Activity - The top five brokerage firms accounted for a total transaction value of 417 million yuan, with a net buying amount of 247 million yuan [2]. - Specific brokerage activities included significant purchases from CITIC Securities and other firms, with the largest buy amounting to 117.95 million yuan [3][4]. Capital Flow - The stock saw a net inflow of 321 million yuan from major funds, with a notable inflow of 324 million yuan from large orders [2]. - Over the past five days, the net inflow of major funds totaled 298 million yuan [2]. Margin Trading Data - As of July 10, the margin trading balance for the stock was 547 million yuan, with a financing balance of 546 million yuan and a securities lending balance of 1.2063 million yuan [2]. - In the last five days, the financing balance decreased by 36.23 million yuan, a decline of 6.23%, while the securities lending balance decreased by 0.0783 million yuan, a decline of 6.10% [2]. Financial Performance - In the first quarter, the company reported a revenue of 1.756 billion yuan, a year-on-year decrease of 15.25%, and a net loss of 125 million yuan [3].

Group 1 - The company expects a net loss of between -3 billion to -2.6 billion for the first half of 2025, a year-on-year decrease of 214.06% to 231.60% [1] - The main reasons for the expected loss include a decline in product orders and prices due to market demand, lower-than-expected production from new projects, and increased quality control costs [1] - In 2024, the company produced 603,900 tons of steel, a decrease of 10.91% year-on-year, and achieved an operating income of 8.484 billion, a decrease of 1.06% year-on-year [2] Group 2 - The company reported a net profit of -1.25 billion in Q1 2025, compared to a profit of 1.15 billion in the same period last year [2] - The company is focusing on high-value-added products, with a continuous increase in their production to stabilize revenue despite a decrease in overall steel production [2] - The company exports mainly tool steel and automotive steel, with significant growth in exports to Europe and Southeast Asia, generating approximately 30 million USD in annual export revenue [3]

Market Overview - On July 11, the A-share market saw all three major indices rise, with total trading volume reaching 1.71 trillion yuan, the highest since March 15, and over 2900 stocks increased in value [1] - Market focus was on sectors such as rare earth permanent magnets, large financials, non-ferrous metals, and CRO concepts [1] Stock Performance - A total of 61 stocks hit the daily limit up, with 17 stocks achieving consecutive limit ups, and a limit up rate of 69% (excluding ST and delisted stocks) [3] - Notable stocks included: - Sifang New Material with a five-day consecutive limit up [3] - Jingyi Co. and Yamaton with eight days of five consecutive limit ups [3] - Lianhuan Futures and Shangwei New Material with three consecutive limit ups [3] Key Stocks and Trading Data - **Sichuan Wisdom (300066)**: Price increased by 20.09% to 5.50 yuan, with a trading volume of 198.8 million [4] - **Guochuang Technology (300221)**: Price increased by 20.04% to 12.22 yuan, with a trading volume of 81.21 million [4] - **Jiujiu Changke (300631)**: Price increased by 20.02% to 28.96 yuan, with a trading volume of 22.537 million [4] - **Guorui Technology (300600)**: Price increased by 20.01% to 16.73 yuan, with a trading volume of 55.38 million [4] - **Haoou Bo (888888)**: Price increased by 20.00% to 156.47 yuan, with a trading volume of 46063 [4] Institutional Trading - The top three net buying stocks on the daily leaderboard were: - Fushun Special Steel with a net buy of 247 million yuan [6] - Guorui Technology with a net buy of 190 million yuan [6] - Shanghai Steel Union with a net buy of 174 million yuan [6] Sector Highlights - **Rare Earth Sector**: The price of rare earth concentrate was adjusted to 19,109 yuan/ton, a 1.5% increase from the previous quarter, marking the fourth consecutive quarter of price increases [24] - **Guorui Technology**: The company is a key supplier in the military and new energy ship sectors, with a focus on precision sheet metal processing in the new energy field [14][17] - **Shanghai Steel Union**: The company focuses on big data for commodities and AI applications, with significant trading activity noted [18] Company Financials - **China Rare Earth**: Reported a 141.32% year-on-year increase in revenue for Q1 2024, amounting to 728 million yuan, and a net profit of 72.62 million yuan, marking a return to profitability [26] - **Guorui Technology**: The company is set to remove risk warnings from its stock, enhancing its market position [17] Trading Trends - The trading volume and turnover rates for several stocks indicated strong market interest, with Shanghai Steel Union achieving a turnover rate of 25.57% and a trading volume of 21.10 billion yuan [18] - The overall market sentiment was positive, with significant movements in various sectors, particularly in rare earth and military-related stocks [24][14]

Core Viewpoint - The recent announcements from the Central Financial Committee regarding the governance of low-price disorderly competition and the orderly exit of backward production capacity have reignited optimism in the steel industry, leading to price increases in various steel products and stocks [1][2][6]. Group 1: Supply-Side Reform Restart - The Central Financial Committee's sixth meeting emphasized the need to promote the orderly exit of backward production capacity, marking the beginning of a new round of supply-side reform [2][3]. - The focus of the reform includes promoting high-quality production capacity and the consolidation of the industry through mergers and acquisitions [2][3]. - A joint initiative from 33 construction companies aims to combat "involution" in the industry, indicating a collective push for transformation [2]. Group 2: Steel Industry Dynamics - The China Iron and Steel Association has been actively promoting self-discipline among major steel companies to control production and reduce inventory [3][4]. - Major steel companies like China Baowu and Ansteel have undergone multiple rounds of restructuring, contributing to an increase in industry concentration from 41.4% in 2021 to 42% in 2024 [3]. - Current data indicates that while total crude steel capacity is not excessively overbuilt, actual production often exceeds designed capacity, leading to a higher overcapacity ratio [4]. Group 3: Cautious Optimism for Steel Prices - The phenomenon of "involution" in the steel industry is characterized by price competition leading to overall profit decline and resource wastage [5]. - The challenges facing the steel market are more complex than in previous cycles, with structural changes in demand and a weak real estate market limiting the potential for a repeat of past bullish trends [7]. - Despite the current low price levels of steel, the overall market environment is better than in 2015, but significant improvements in supply-demand dynamics are unlikely, necessitating close attention to policy implementation [7].

Market Overview - The Shanghai Composite Index rose by 0.01% on July 11, with 19 out of 28 sectors experiencing gains, led by non-bank financials and steel, which increased by 2.02% and 1.93% respectively [1] - The banking and building materials sectors saw the largest declines, with decreases of 2.41% and 0.67% [1] Fund Flow Analysis - The main funds in the two markets experienced a net outflow of 6.21 billion yuan, with 7 sectors seeing net inflows [1] - The non-bank financial sector had the highest net inflow of 8.21 billion yuan, coinciding with its 2.02% increase [1] - The computer sector followed with a 1.93% increase and a net inflow of 6.20 billion yuan [1] Steel Industry Performance - The steel sector increased by 1.93% with a net inflow of 865 million yuan, comprising 44 stocks, of which 31 rose and 12 fell [2] - Among the stocks, Baogang Co. led with a net inflow of 650 million yuan, followed by Fushun Special Steel and Anyang Steel with inflows of 321 million yuan and 63 million yuan respectively [2] - The sector also had 9 stocks with net outflows exceeding 10 million yuan, with Hangang Co., Baosteel, and Xinxing Ductile Iron Pipe leading in outflows [2] Individual Stock Highlights - Baogang Co. saw a significant increase of 10.00% with a turnover rate of 4.45% and a main fund flow of 649.71 million yuan [2] - Fushun Special Steel also performed well with a 10.06% increase and a main fund flow of 320.66 million yuan [2] - Conversely, stocks like Hangang Co. and Baosteel experienced notable outflows of 81.56 million yuan and 67.70 million yuan respectively [3]

Group 1 - The company, Fushun Special Steel Co., Ltd., expects a net profit attributable to shareholders for the first half of 2025 to be between -260 million yuan and -300 million yuan, representing a decrease of 214.06% to 231.60% compared to the same period last year [1][2] - The expected net profit attributable to shareholders after deducting non-recurring gains and losses is also projected to be between -260 million yuan and -300 million yuan, reflecting a decrease of 217.24% to 235.27% year-on-year [1][2] - The previous year's net profit attributable to shareholders was 227.96 million yuan, with a net profit of 221.78 million yuan after deducting non-recurring gains and losses [2] Group 2 - The main reasons for the expected loss include lower-than-expected actual production from new projects, leading to increased fixed costs per unit, and higher quality control costs due to enhanced product quality requirements [2]