Orient Securities·2026-03-09 14:42Investment Rating - The report maintains a "Positive" outlook for the steel industry [6] Core Viewpoints - The steel industry is currently facing weak supply and demand dynamics, but inventory levels are low compared to last year. As the traditional manufacturing peak season approaches, demand for steel is expected to improve marginally, potentially driving prices up. Environmental production restrictions during the Two Sessions are leading to a decrease in iron water output, awaiting policy guidance to enhance profitability for steel companies [3][12][13] Supply - Average daily iron water output decreased by 2.44% week-on-week to 2.2759 million tons, while rebar production increased by 4.97% week-on-week to 1.73 million tons. The capacity utilization rate for long-process rebar decreased slightly by 0.24 percentage points, while short-process rebar utilization increased significantly by 9.66 percentage points [15][18] Inventory - Total inventory increased by 5.74% week-on-week, with social inventory rising by 8.29% and steel mill inventory slightly decreasing by 0.27%. The total inventory level is up 4.93% year-on-year [21][20] Demand - The apparent consumption of five major steel products rose significantly by 22.44% week-on-week to 6.91 million tons, with rebar consumption increasing the most by 192.79% [23][24] Cost and Profitability - The average iron water cost decreased slightly by 0.12% week-on-week to 2,295 yuan per ton, while the profitability of steel companies dropped by 1.73 percentage points to 38.10% [33][29] Steel Prices - The overall price index for common steel decreased by 0.02% this week, with most steel product prices showing a downward trend. The largest price increase was for galvanized steel at 3,938 yuan per ton, up 0.13% week-on-week [40][41] Sector Performance - The Shanghai Composite Index fell by 0.93% to 4,124 points, while the steel sector index dropped by 3.55% to 3,023 points [44][45]