Report Industry Investment Rating No relevant content provided in the report. Report's Core View - In the future month, steel supply pressure remains high, demand growth is limited, and changes in inventory data should be closely monitored. Policy-wise, the Fourth Plenary Session in October may lead to policy support. Fundamentally, the weak demand during the peak season persists, and the weak reality is hard to change. Supply shows a pattern of increased blast furnace production and reduced electric furnace production. If inventory pressure continues to rise, a new round of production cuts may occur. Overall, steel supply outstrips demand, policy support is limited, and steel prices are expected to fluctuate weakly. The reference range for rebar is 2,900 - 3,200 yuan/ton. Short-term attention should be paid to Sino-US tariff policy interference [3][50]. Summary by Directory 1. Market Review - In September, steel futures fluctuated repeatedly and gradually weakened with a lower center of gravity, mainly influenced by the game between expectations and reality. In the first ten days, rebar was weak while hot-rolled coils were strong. Rebar futures fell below 3,100 yuan/ton, and hot-rolled coils rose from 3,282 yuan/ton to over 3,350 yuan/ton. The demand improvement for rebar during the peak season was limited, while the military parade production restrictions led to reduced production in the Beijing-Tianjin-Hebei region, causing the supply of hot-rolled coils to shrink and the spread between coils and rebar to widen. In the middle ten days, steel prices rebounded due to pre-holiday inventory replenishment driving up raw material prices and strengthening cost support. In the last ten days, market sentiment weakened. On one hand, supply recovered and inventory pressure emerged; on the other hand, building materials were dragged down by the sluggish real estate market, with weak demand during the peak season. Moreover, after the inventory replenishment cycle ended, raw material prices declined and were transmitted to the finished product end, leading to an adjustment in steel prices. Overall, in September, the demand drive in the steel market was limited, and futures prices fluctuated with supply-side disturbances. In October, the pattern of weak reality and strong expectations remained unchanged, but market expectations shifted from the demand side to macro policies [8]. 2. Steel Fundamental Analysis 2.1 Supply Pressure Persists - In September, steel supply showed a pattern of increased blast furnace production and reduced electric furnace production. Long-process steel mills were in good profit conditions, with strong willingness to start blast furnaces, and molten iron production remained at a high level. At the beginning of October, the profitability rate of 247 steel mills was 56.71%, a 19-percentage-point increase compared to the same period last year, and the daily average molten iron production of steel mills remained above 2.4 million tons. At the electric furnace end, due to the rising price of scrap steel, the utilization rate of short-process production capacity decreased month-on-month, and the daily consumption of scrap steel dropped to 534,000 tons, increasing the production cut pressure. Statistical data showed that from January to August, the crude steel production decreased by 2.8% year-on-year, and the pig iron production decreased by 1.1% year-on-year. The monthly crude steel production continued to decline while the pig iron production turned positive, reflecting a shift in iron element demand towards iron ore. The supply structure was significantly differentiated. Long-process steel mills maintained production by converting to billet production, and the supply contradiction of flat products began to emerge, with the inventory of hot-rolled coils increasing significantly year-on-year. For rebar, due to the production cuts at electric furnaces, the supply-demand contradiction was slightly alleviated. Overall, in October, the supply side featured rigid production in blast furnaces and elastic adjustment in electric furnaces. If the seasonal recovery of terminal demand falls short of expectations, a new round of production cuts may occur [14]. 2.2 High Steel Inventory Pressure - In September, steel inventory rebounded significantly, and industrial contradictions accumulated faster. As of October 8, the total inventory of the five major steel products reached 16.01 million tons, an increase of 1 million tons compared to the beginning of the previous month. Among them, the inventory of rebar and wire rod increased by 430,000 tons, and the inventory of hot-rolled coils increased by 380,000 tons. The inventory increase was mainly concentrated in the social inventory link. The social inventory of rebar increased by 50% year-on-year, and the inventory of hot-rolled coils reached a historical high, indicating weak terminal demand. The inventory in steel mills was at a low level, and the pressure was relatively controllable. Although the marginal improvement in demand during the peak season may drive inventory reduction, given the high supply from steel mills and the lack of substantial improvement in terminal demand, the inventory reduction intensity may be limited [22]. 2.3 Weak Demand During Peak Season - In September, steel demand was weak during the peak season. Affected by the real estate market, the demand for building materials was weak. In August, the land transaction area in 100 large and medium-sized cities was 50.82 million square meters, a 14% year-on-year decrease, and the commercial housing sales decreased by 11% year-on-year, with the decline in new construction expanding to 19.8%. A survey by Baonian Construction showed that at the end of September, the fund availability rate of construction sites was only 59.54%, and the capital sources of real estate enterprises continued to decline. Currently, the real estate industry is still in a difficult bottoming-out stage. The manufacturing industry maintained resilience, with good growth in automobile and home appliance production, and the apparent demand for hot-rolled coils increased slightly year-on-year. In October, as the weather cools down, the construction site start-up rate is expected to increase, but the seasonal improvement space for steel demand is limited. Weak real estate sales restrict front-end investment. The manufacturing PMI is still in the contraction range, and the incremental space for automobile and home appliance demand is limited. Overall, it is difficult for steel demand to have unexpected growth [25]. 2.4 Attention to Policy Expectations from Conferences - In September, the Political Bureau Meeting of the CPC Central Committee was held to study major issues in formulating the 15th Five-Year Plan for National Economic and Social Development. The meeting decided that the Fourth Plenary Session of the 20th Central Committee will be held in Beijing from October 20th to 23rd. On September 5th, Shenzhen issued the "Notice on Further Optimizing and Adjusting the City's Real Estate Policy Measures." This new real estate policy in Shenzhen mainly made adjustments in three aspects: relaxing purchase restrictions, loosening corporate home purchases, and optimizing credit. The real estate policies in first-tier cities continued to be relaxed. On October 9th, the Ministry of Commerce and the General Administration of Customs issued an announcement on implementing export control measures for five items including superhard materials, rare earth equipment and raw materials, holmium, lithium batteries, and artificial graphite anode materials, which will be officially implemented on November 8th. Trump publicly threatened to impose a 100% tariff on Chinese goods exported to the US. The real estate industry has been in a continuous downturn, and the data in August did not improve. From January to August, the national real estate development investment was 6.0309 trillion yuan, a 12.9% year-on-year decrease. The floor area under construction of real estate development enterprises was 6.43109 billion square meters, a 9.3% year-on-year decrease. The new construction area was 398.01 million square meters, a 19.5% decrease. Although first-tier cities such as Beijing, Shanghai, and Shenzhen have successively introduced new real estate policies, the policy effects have been limited, and the market is still in the stage of "stopping the decline and stabilizing." The real estate sector has significantly dragged down the demand for construction steel, and it is expected that it will not contribute incremental demand in the short term. The growth rate of infrastructure construction continued to slow down. From January to August, the national fixed asset investment (excluding rural households) was 3.26111 trillion yuan, a 0.5% year-on-year increase. The investment in the production and supply of electricity, heat, gas, and water increased by 18.8%. The investment in water transportation increased by 15.9%, the investment in water conservancy management increased by 7.4%, and the investment in railway transportation increased by 4.5%. Major projects in Xinjiang, Tibet, and other places started, with a relatively high investment boom, but the overall driving effect on steel demand was limited. In September, the Manufacturing Purchasing Managers' Index (PMI) was 49.8%, a 0.4-percentage-point increase from the previous month. The manufacturing industry's prosperity level continued to improve, but it was in the contraction range for six consecutive months, with limited marginal improvement in the manufacturing industry and pressure on downstream demand. From January to August, the production and sales of automobiles reached 21.051 million and 21.128 million units respectively, a year-on-year increase of 12.7% and 12.6% respectively. Among them, the production and sales of new energy vehicles reached 9.625 million and 9.62 million units respectively, a year-on-year increase of 37.3% and 36.7% respectively. The new sales of new energy vehicles accounted for 45.5% of the total new vehicle sales. The export of complete automobiles was 4.292 million units, a 13.7% year-on-year increase. The export of new energy vehicles was 1.532 million units, an 87.3% year-on-year increase. The export of new energy vehicles became the driving force for the growth of automobile exports. From January to August, the cumulative refrigerator production was 70.19 million units, a 1.9% year-on-year increase; the cumulative air conditioner production was 199.65 million units, a 5.8% year-on-year increase; and the washing machine production was 78.26 million units, a 7.8% year-on-year increase. The home appliance production schedule data in October was average, and the overall production of white goods decreased by 9.9% year-on-year, with the largest decline in the production schedule of household air conditioners, a 18% year-on-year decrease. This year, steel exports have remained resilient, but there is high uncertainty in overseas policies. From January to August, China's cumulative steel imports were 1.98 million tons, a 14.1% year-on-year decrease, and the cumulative exports were 77.49 million tons, a 10% year-on-year increase. The export of hot-rolled coils was 14.54 million tons, a 19% year-on-year decrease, affected by anti-dumping measures from South Korea and Vietnam (this year, the export of steel to Vietnam decreased by 21% year-on-year, and to South Korea by 11%); the export of steel bars was 2.6 million tons, a 71% year-on-year increase, continuing the upward trend but with a small proportion [29][30][46][47]. 3. Market Outlook - Supply side: In September, steel supply showed a pattern of increased blast furnace production and reduced electric furnace production. Long-process steel mills were in good profit conditions, with strong willingness to start blast furnaces, and molten iron production remained at a high level, with the daily average molten iron production of steel mills above 2.4 million tons. At the electric furnace end, due to the rising price of scrap steel, the utilization rate of short-process production capacity decreased month-on-month, and the daily consumption of scrap steel dropped to 534,000 tons, increasing the production cut pressure. The supply structure was significantly differentiated. Long-process steel mills maintained production by converting to billet production, and the supply contradiction of flat products began to emerge, with the inventory of hot-rolled coils increasing significantly year-on-year. For rebar, due to the production cuts at electric furnaces, the supply-demand contradiction was slightly alleviated. Overall, in October, the supply side featured rigid production in blast furnaces and elastic adjustment in electric furnaces. If the seasonal recovery of terminal demand falls short of expectations, a new round of production cuts may occur. - Demand side: Steel demand was weak during the peak season. Affected by the real estate market, the demand for building materials was weak. A survey by Baonian Construction showed that at the end of September, the fund availability rate of construction sites was only 59.54%, and the capital sources of real estate enterprises continued to decline. The real estate industry is still in a difficult bottoming-out stage. The manufacturing industry maintained resilience, with good growth in automobile and home appliance production, and the apparent demand for hot-rolled coils increased slightly year-on-year. In October, as the weather cools down, the construction site start-up rate is expected to increase, but the seasonal improvement space for steel demand is limited. It is difficult for steel demand to have unexpected growth. In the future month, steel supply pressure remains high, demand growth is limited, and changes in inventory data should be closely monitored. Policy-wise, the Fourth Plenary Session in October may lead to policy support. Fundamentally, the weak demand during the peak season persists, and the weak reality is hard to change. Supply shows a pattern of increased blast furnace production and reduced electric furnace production. If inventory pressure continues to rise, a new round of production cuts may occur. Overall, steel supply outstrips demand, policy support is limited, and steel prices are expected to fluctuate weakly. The reference range for rebar is 2,900 - 3,200 yuan/ton. Short-term attention should be paid to Sino-US tariff policy interference [49][50].
需求持续不佳，钢价震荡转弱
Tong Guan Jin Yuan Qi Huo·2025-10-13 02:40