SCS(SH:601555) 智通财经网·2025-11-24 08:08Core Viewpoint - The steel industry in China is expected to face a supply surplus, with total apparent steel consumption projected to reach 930 million tons by October 2025, reflecting a year-on-year increase of 5% [1][2]. Group 1: Supply and Demand Dynamics - By November 2025, the average daily pig iron output is expected to be 2.38 million tons, a year-on-year increase of 3.7% [2]. - The total crude steel output in China is projected to be 820 million tons by October 2025, showing a year-on-year decrease of 4% [2]. - The demand for steel is primarily affected by the real estate sector, while shipbuilding, automotive, manufacturing, and exports are expected to provide some compensation [1][2]. Group 2: Price Trends - Steel prices are anticipated to exhibit a downward trend in 2025, fluctuating between 3,000 to 3,500 RMB per ton, with Q3 expected to be the lowest point of the year due to weak downstream demand [4]. - The decline in coking coal prices is expected to contribute to the decrease in steel prices, with iron ore prices also projected to have room for further decline in 2026 [5]. Group 3: Profitability Outlook - The steel industry's gross profit margins are expected to remain at a high level during July to September 2025, with the average profitability for the year being the best from 2021 to 2025 [6]. - The anticipated supply-side reform 2.0 may constrain crude steel production by 5% to 10%, focusing on environmental and carbon emission standards [7]. Group 4: Investment Strategy - The investment strategy for 2026 suggests focusing on companies with stable performance in the top-tier steel sector and those benefiting from growth in downstream niche markets [8]. - Recommended companies include Baosteel (600019.SH), Hualing Steel (000932.SZ), Nanjing Steel (600282.SH), and CITIC Special Steel (000708.SZ) for their quality product structures [8].