Orient Securities·2026-03-10 00:24Investment Rating - The steel industry is rated as "Positive" and the rating is maintained [6] Core Viewpoints - The steel industry is currently facing weak supply and demand dynamics, but inventory levels are low year-on-year. As the traditional manufacturing peak season approaches, demand for steel is expected to improve marginally, potentially driving prices upward. Environmental production restrictions during the Two Sessions have led to a decrease in molten iron output, and the industry is awaiting policy guidance to enhance profitability for steel companies [3][12][13] Supply - The average daily molten iron output this week was 2.2759 million tons, a week-on-week decrease of 2.44%. Rebar production increased by 4.97% week-on-week to 1.73 million tons. The production of hot-rolled steel decreased by 2.75%, while cold-rolled steel production saw a slight increase of 0.87% [15][18] Inventory - Total social inventory increased by 8.29% week-on-week to 14.03 million tons, while steel mill inventory decreased slightly by 0.27% to 5.49 million tons. The combined inventory saw a significant week-on-week increase of 5.74% and a year-on-year increase of 4.93% [21][20] Demand - The apparent consumption of steel this week rose significantly, with a total of 6.91 million tons, marking a week-on-week increase of 22.44%. Notably, rebar consumption surged by 192.79% week-on-week. The transaction volume for mainstream building materials reached 56,553 tons, a substantial increase of 62.12% [23][24] Cost and Profitability - The average molten iron cost this week was 2,295 yuan per ton, reflecting a slight week-on-week decrease of 0.12%. The profitability rate for steel companies was 38.10%, down 1.73 percentage points week-on-week. Long-process rebar costs increased by 0.56%, while short-process costs decreased by 0.26%. Long-process rebar profitability fell by 22 yuan, while short-process profitability rose by 5 yuan [33][36][29] Steel Prices - The overall price of common steel has slightly declined, with the common steel price index decreasing by 0.02%. The price of galvanized steel increased by 0.13% to 3,938 yuan per ton, while cold-rolled steel prices fell by 0.19% to 3,697 yuan per ton [40][41] Sector Performance - The Shanghai Composite Index closed at 4,124 points, down 0.93% for the week, while the Shenwan Steel Index closed at 3,023 points, down 3.55% [44][45]