Zhong Guo Neng Yuan Wang·2025-11-20 02:06Core Viewpoint - The steel industry is experiencing a recovery in profits due to unexpected demand from manufacturing and direct exports, alongside the implementation of "anti-involution" policies, leading to an increase in supply optimization expectations [1][2]. Group 1: Industry Performance - In Q1-Q3 2025, the SW steel index rose by 24.00%, ranking 17th among Shenwan industries, driven by improved manufacturing and export demand [1][2]. - From October 2025 to present, the SW steel index has continued to rise by 14.19%, ranking 4th among Shenwan industries [1][2]. - In Q3 2025, the profitability of the rebar sector turned positive, with a 102.59% increase in special steel profits year-on-year, while the gross profit margin rose to 7.59% and net profit margin increased to 2.19% [3]. Group 2: Policy and Structural Changes - The steel industry is focusing on differentiated production restrictions and classified management to promote high-value, low-carbon, and intelligent transformations, enhancing industry concentration and optimizing structural layout [3]. - Policies such as ultra-low emission upgrades and dual control of energy consumption are expected to drive capacity optimization and accelerate the elimination of outdated production capacity [3]. Group 3: Demand Drivers - The manufacturing sector, particularly in machine tools, excavators, and commercial vehicles, remains resilient, with direct exports showing significant year-on-year growth, supporting steel demand [3]. - The construction sector is experiencing weak new starts, but forward-looking indicators like sales and land acquisition are showing reduced declines, stabilizing demand for construction steel [3]. Group 4: Investment Recommendations - Steel capacity optimization is expected to be a key focus moving forward, with a push for differentiated management to support competitive enterprises [4]. - Attention is recommended for leading steel companies such as Hualing Steel, Baosteel, and Nanjing Steel, as well as flexible stocks like Fangda Special Steel and New Steel [4]. - The special steel sector is projected to benefit from downstream demand in automotive, nuclear power, and oil and gas extraction, with companies like Xianglou New Materials and Jiuli Special Materials highlighted for stable growth [4]. - In the raw materials sector, companies with clear non-ferrous resource increments, such as Dazhong Mining and Hebei Steel Resources, are recommended for investment [4].