Core Viewpoint - The steel industry is experiencing a weak recovery in demand and a significant drop in raw material prices, leading to a profit recovery for steel companies. The SW Steel index has increased by 3.82% in H1 2025 and by 15.62% since July 2025, reflecting improved profit expectations due to supply optimization policies [1][2]. Group 1: Market Performance - In H1 2025, the steel sector saw a weak recovery in demand, with raw material prices declining more than steel prices, resulting in a profit recovery for steel companies. The SW Steel index rose by 3.82%, ranking 23rd among Shenwan industries [2]. - From July 2025 to present, the introduction of "anti-involution" policies has enhanced expectations for supply optimization in the steel industry, leading to a recovery in steel prices and a 15.62% increase in the SW Steel index, ranking 13th among Shenwan industries [1][2]. - In Q2 2025, the profitability of the rebar sector improved both year-on-year and quarter-on-quarter, with a 1831.92% increase in net profit for rebar companies year-on-year and a 104.89% increase quarter-on-quarter [2]. Group 2: Industry Trends - The steel sector's configuration ratio decreased in Q2 2025 due to the lack of implementation of crude steel production limits and the impact of U.S. tariffs on demand expectations, dropping by 0.20 percentage points to 0.22% [3]. - The domestic crude steel surplus has exceeded previous cycles, and policies aimed at optimizing steel production capacity are expected to improve the supply structure [3]. - Manufacturing sectors such as machine tools, excavators, and passenger vehicles remain robust, while direct exports have increased significantly, supporting steel demand. The construction sector shows signs of stabilization despite weak new starts [3]. Group 3: Investment Recommendations - The optimization of steel production capacity is expected to be a key focus moving forward, with a shift towards differentiated management and support for high-quality enterprises [4]. - For the rebar sector, attention should be paid to leading companies like Hualing Steel, Baosteel, and Nanjing Steel, which are expected to benefit from policy support and improved profitability [5]. - In the special steel sector, companies benefiting from downstream demand in automotive, wind power, and oil and gas extraction are recommended for investment, with a focus on firms like Xianglou New Materials and Jiuli Special Materials [5].
晨光破晓，蓄势待发 | 投研报告
Zhong Guo Neng Yuan Wang·2025-09-11 01:24