Di Yi Cai Jing·2025-07-14 11:05Core 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 Group 4: Policy and Structural Changes - Recent central government meetings have emphasized the need to eliminate outdated production capacity, strengthening expectations for supply contraction in the steel industry [4][6].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].