Mei Ri Jing Ji Xin Wen·2025-07-04 06:01Core Viewpoint - The steel sector is experiencing a rally despite overall market fluctuations, driven by environmental regulations and improving demand conditions [1][3]. Group 1: Market Performance - The steel ETF (515210) rose by 1.67%, leading the market with a trading volume of nearly 104 million yuan [1]. - Key holdings such as Lingang Co. and Liugang Co. have seen consecutive trading limits, while other stocks like Shougang Co. and Hesteel Co. increased by nearly 5% [1]. - Since September 2, 2024, the steel ETF has gained 31.33%, outperforming the Shanghai Composite Index [6]. Group 2: Supply and Demand Dynamics - Tangshan has intensified its environmental production restrictions, with rumors of measures from July 4 to July 15 [3]. - The China Iron and Steel Association is set to hold a meeting, although the agenda remains undisclosed [3]. - Steel inventory among key enterprises increased by 420,000 tons to 16.21 million tons in mid-June, but decreased by 140,000 tons compared to the same period last month [3]. Group 3: Industry Outlook - The operating rate of H-beam steel producers rose by 3.23 percentage points to 70.97%, with capacity utilization increasing by 0.9 percentage points to 56.83% [4]. - Demand is expected to improve marginally due to supportive real estate policies and stable infrastructure investment, while supply constraints are becoming more pronounced [4]. - The profit margin for the black metal smelting and rolling industry reached 31.69 billion yuan in the first five months of 2025, marking a return to profitability year-on-year [4]. - The comprehensive gross profit for the steel industry was 281 yuan per ton in the first half of 2025, reflecting a year-on-year increase of 52.45% [4].