Baosteel(SH:600019) Orient Securities·2025-03-12 10:20Investment Rating - The report maintains a "Positive" outlook for the non-ferrous and steel industry [5]. Core Viewpoints - The supply landscape for iron ore is expected to undergo significant changes, with a notable increase in production capacity from new projects, particularly the Simandou project, which could disrupt the current oligopolistic market structure [8][43]. - The steel industry's profitability is anticipated to recover as iron ore prices are projected to decline due to oversupply conditions from 2025 to 2027 [8][43]. Summary by Sections Section 1: Introduction to Iron Ore - Iron ore is a primary raw material for steel production, and its supply and demand significantly impact the operational performance and profit margins of steel companies [14]. Section 2: Supply Dynamics - The global iron ore market is currently dominated by four major mining companies, which account for over 44% of total production [50]. - The Simandou iron ore project, with a total resource of over 4.41 billion tons and an average grade exceeding 65%, is expected to become a major player in the market [54]. Section 3: Demand Trends - The domestic steel industry is entering a new phase, with expectations of continued decline in iron ore demand, while global demand is projected to grow only slightly [3][8]. Section 4: Supply-Demand Balance - The report forecasts a significant oversupply of iron ore from 2025 to 2027, with surplus ratios expected to reach 3.9%, 7.0%, and 8.7% respectively [8][43]. Section 5: Investment Recommendations - The report suggests focusing on midstream steel companies, particularly those engaged in steel production, with specific recommendations for companies like Shandong Steel and South Steel, which are expected to benefit from a manufacturing sector recovery [3].