Orient Securities·2026-03-02 00:25Investment Rating - The report maintains a "Positive" outlook for the steel industry [5] Core Viewpoints - The upcoming peak season is expected to improve steel demand, supported by macroeconomic policies aimed at expanding domestic demand and optimizing supply [8] - The steel sector is anticipated to experience marginal improvements in both demand and supply sides, with a focus on the upcoming traditional peak demand period in March and April [12] - The successful operation of the Simandou iron ore project is expected to lower production costs and enhance the profitability of domestic steel companies [12] Summary by Sections Cycle Assessment - The report highlights the upcoming peak season and the expectation of policy guidance, with a focus on the positive macroeconomic environment for steel demand recovery [8][12] - The Ministry of Industry and Information Technology has released a list of companies meeting the new industry standards, indicating a shift towards higher quality development in the steel sector [12] Supply - The average daily pig iron production is reported at 2.3328 million tons, showing a slight week-on-week increase of 1.21%, while rebar production decreased by 2.40% [13][15] - The capacity utilization rate for long-process rebar has increased slightly, while short-process rebar utilization has decreased significantly [15] Inventory - Total social and steel mill inventories have risen significantly, with a week-on-week increase of 27.96% [21][20] - The report notes that while inventories are up, they are down 1.76% year-on-year, indicating a potential for inventory destocking in the near future [21] Demand - The apparent consumption of steel has decreased significantly, with a total of 5.65 million tons consumed, marking an 18.06% decline week-on-week [23][24] - Rebar consumption has seen the largest drop, with a week-on-week decrease of 67.08% [24] Cost and Profitability - The report indicates a slight decrease in overall steel costs, with long-process rebar costs down by 0.48% and short-process costs up by 2.95% [30][27] - Profit margins for long-process rebar have increased slightly, while short-process margins have decreased significantly [30][31] Steel Prices - The overall steel price index has seen a minor decline of 0.14%, with all steel product price indices showing a decrease [35][36] - The report notes that the price of hot-rolled steel has decreased by 0.37% week-on-week [35] Sector Performance - The steel sector has outperformed the market, with the Shanghai Composite Index rising by 1.98% and the steel sector index increasing by 12.27% [40][41] - Among individual stocks, Changbao Co. has shown the highest increase in the steel sector [46]