Guolian Minsheng Securities·2026-03-01 06:52Investment Rating - The report maintains a "Buy" rating for the steel industry, recommending several key companies [2][3]. Core Insights - As the Two Sessions approach, expectations for supply constraints have increased, with some steel mills receiving temporary self-reduction notices during important meetings, indicating a reduction in high furnace load by no less than 30% [6][9]. - The report highlights that the first batch of steel enterprise grading results has been announced, with 35 and 195 steel companies expected to meet the standards for "leading normative enterprises" and "normative enterprises," respectively. This grading will serve as a key basis for differentiated supply-side regulation [6][9]. - The report suggests that with supply-side constraints expected, steel company profits are likely to rebound from the bottom, benefiting leading enterprises under differentiated regulation [6][9]. Summary by Sections Domestic Steel Market - As of February 27, the price of 20mm HRB400 rebar in Shanghai is 3200 CNY/ton, down 10 CNY/ton from the previous week. Other steel prices have also seen slight decreases [11][12]. - The average weekly gross profit for long-process steel (rebar, hot-rolled, and cold-rolled) has increased by 25 CNY/ton, 27 CNY/ton, and 32 CNY/ton respectively compared to the previous week [6][11]. Production and Inventory - As of February 27, the total production of five major steel products is 7.97 million tons, a decrease of 79,800 tons week-on-week. The total inventory of these products has increased by 1.14 million tons to 12.94 million tons [6][9]. Profitability - The report indicates that the profitability of long-process steel has improved, while short-process steel has seen a decrease in average gross profit by 44 CNY/ton compared to the previous week [6][11]. Key Company Valuations - The report provides earnings per share (EPS) and price-to-earnings (PE) ratios for several companies, all rated as "Buy," including: - Hualing Steel (EPS: 0.50 CNY, PE: 13) - Baosteel (EPS: 0.49 CNY, PE: 15) - Nanjing Steel (EPS: 0.46 CNY, PE: 13) [2][3]. International Steel Market - As of February 27, the U.S. steel market shows fluctuations, with hot-rolled coil prices at 1104 USD/ton, up 38 USD/ton from the previous week, while European prices also reflect similar trends [22][24]. Raw Material Market - Domestic iron ore prices are stable with slight declines, while imported ore prices are fluctuating. The report notes that the price of domestic iron concentrate is 750 CNY/ton, remaining stable [26][27].