1. Report Industry Investment Rating - No information provided in the document. 2. Core Viewpoints of the Report - The current spot market for finished steel products has entered the traditional off - season for consumption, and there may be a seasonal inventory build - up trend in the later period. On the supply side, the production of strip products such as hot - rolled coils remains at a relatively high level due to profit incentives, while the production of rebar continues to decline. The consumption is slightly stronger than the seasonal average, and the supply - demand structure is conducive to the continued narrowing of the spread between hot - rolled coils and rebar. In terms of cost, recent policy expectations on the raw material side have caused disturbances, and steel prices have rebounded slightly from the low level. It is expected that the short - term trend will mainly focus on basis repair, and the rebound pressure should be monitored between the long - process cost (2970) and the off - peak electricity cost (3125) [9]. 3. Summary by Relevant Catalogs 3.1 Conclusion and Balance Sheet - This week, domestic steel spot prices rebounded slightly in a volatile manner. The price of rebar in East China's Shanghai was 3090 yuan (unchanged), and that in Tangshan was 3150 yuan (+20). For hot - rolled coils, the price in Shanghai was 3200 yuan (+30), and that in Tianjin was 3120 yuan (-20) [6]. - As of June 5, the overall production of five major steel products decreased by 0.47 tons, the factory inventory of the five major products decreased by 0.26 tons month - on - month, and the social inventory decreased by 1.53 tons. The apparent demand was 882.17 tons, a month - on - month decrease of 31.62 tons. As of June 6, in the long - process spot market, the cash - inclusive cost of long - process rebar in East China was 2972 yuan, with a point - to - point profit of about 148 yuan, and the long - process cash - inclusive profit of hot - rolled coils was about 128 yuan. In the electric - arc furnace segment, the flat - rate electricity cost of electric - arc furnaces in East China (Fubao's data) was about 3260 yuan, and the off - peak electricity cost was about 3128 yuan. The flat - rate electricity profit of rebar in East China was about - 210 yuan, and the off - peak electricity profit was about - 78 yuan [8]. - In the scrap steel segment, as of June 5, the price of scrap steel in Zhangjiagang was 2080 yuan/ton, unchanged month - on - month. Data showed that the capacity utilization rate of 89 independent electric - arc furnace enterprises was 34.8%, a month - on - month increase of 1 percentage point; the daily consumption of 255 sample steel mills was 54.2 tons, a month - on - month increase of 0.66 tons. Among them, the daily consumption of 132 long - process steel mills was 26.7 tons per day, a month - on - month decrease of 0.15 tons; the daily consumption of short - process steel mills was 17.3 tons, a month - on - month increase of 0.51 tons. In terms of supply, the daily arrival of 255 sample steel mills was 48.7 tons, a month - on - month decrease of 4.7 tons, a decline of 8.8%. In terms of inventory, the total scrap steel inventory of 255 steel enterprises was 513.4 tons, a month - on - month decrease of 29.74 tons, a decline of 5.5%. Overall, the difference between iron and scrap steel prices continued to weaken this period, the economic efficiency of scrap steel slightly improved, and the short - term price is expected to fluctuate with steel prices [8]. 3.2 Supply - Demand Fundamentals 3.2.1 Production and Inventory Data of Five Major Steel Products - The report provides detailed production, inventory, and inventory change data of five major steel products (rebar, hot - rolled coils, medium - thick plates, wire rods, and cold - rolled coils) from March 28, 2025, to June 6, 2025, as well as the latest week - on - week changes [10][11]. 3.2.2 Steel Production Statistics - In 2024, according to the statistics bureau's data, the crude steel production was 1.005 billion tons, a decrease of 13.99 million tons compared with 2023, a decline of 1.7%; the pig iron production was 852 million tons, a decrease of 13.27 million tons compared with 2023, a decline of 2.3%. From January to April 2025, the cumulative pig iron production was 289 million tons, a year - on - year increase of 0.8%, and the cumulative crude steel production was 345 million tons, a year - on - year increase of 0.4% [17]. 3.2.3 Economic Data - The PMI in May 2025 was 49.5%. Compared with April 2025, the production index increased by 0.9 percentage points, the new order index increased by 0.6 percentage points, and the new export order index increased by 2.8 percentage points [22]. 3.2.4 Crude Steel Supply - Demand Balance Sheet - The report presents the supply - demand balance sheet of crude steel from 2019 to 2025E, including data on crude steel production, pig iron production, scrap steel - made steel production, crude steel imports and exports, and inventory changes [33]. 3.2.5 Supply - Side Data - **Long - process supply**: As of June 6, 2025, the blast furnace capacity utilization rate of 247 steel enterprises was 90.7% (unchanged from May 30), and the daily pig iron output was 241.8 tons, a decrease of 0.11 tons compared with May 30 [49]. - **Short - process supply**: As of June 5, the capacity utilization rate of 89 domestic electric - arc furnace plants was 34.8% (+1 percentage point); as of June 6, the difference between iron and scrap steel prices was - 113 yuan (-5.5 yuan) [52]. - **Scrap steel data**: The daily arrival of scrap steel at 255 steel mills decreased, and the inventory also decreased. The daily consumption of scrap steel increased overall, with short - process consumption increasing and long - process consumption decreasing [8]. 3.2.6 Demand - Side Data - **Rebar production and inventory**: This week, the original sample rebar production was 218.46 tons (-7.05 tons), including 193.66 tons of long - process production (-6.46 tons) and 24.8 tons of short - process production (-0.59 tons). The rebar factory inventory was 184.86 tons (-1.6 tons), the social inventory was 385.62 tons (-8.97 tons), and the total inventory was 570.48 tons (-10.57 tons) [65][81]. - **Hot - rolled coil supply and demand**: This week, the hot - rolled coil production was 328.75 tons, a month - on - month increase of 9.2 tons; the apparent demand was 320.92 tons, a month - on - month decrease of 6.01 tons. The factory inventory increased by 1.33 tons, the social inventory increased by 6.5 tons, and the overall inventory increased by 7.83 tons [84]. - **Plate demand**: As of June 6, the cold - hot spread in Shanghai was 510 yuan/ton (-10 yuan) [91]. - **Export situation**: As of June 6, the FOB export price of China was $445 (-$10), the export profit was - $11.5 (-$20.4), and the outbound volume from 32 major domestic ports was 2.7219 million tons (-0.153 million tons) [96].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In May, the steel market fluctuated little in the first half - month and declined continuously in the second half, breaking the previous low. Macroeconomic policies have limited impact on the black - series commodities, and the overall demand intensity is lower than expected. Although steel mills' profits are in a good state, the balance of steel supply and demand is fragile. There is a possibility of a seasonal decline in demand, and the raw material cost may decrease. The downward trend of the steel industry has not ended, but if there are corresponding production - limiting measures for coking coal, it may help form a phased bottom. Also, the steel basis is likely to weaken in June, and attention should be paid to reverse arbitrage opportunities [3][4]. 3. Summary by Relevant Catalogs 3.1 Market Review - After the Spring Festival, the resumption of construction at construction sites was slow, steel exports faced tariff barriers, and the decline of coking coal drove down the price of steel. During the Tomb - Sweeping Festival, affected by the trade war, the overall commodity market declined significantly. Currently, the steel market shows characteristics of low - level range fluctuations [8]. 3.2 Currency and Social Financing - The growth rates of M1 and M2 generally showed a rising trend, and the M1 - M2 gap slightly narrowed in April. In April, RMB loans decreased significantly to less than 10 billion, and the year - on - year difference between social financing and M2 declined [11]. 3.3 Price Index - In April, CPI was - 0.1 with a flat month - on - month change, and PPI was - 2.7, a further decline of 0.2 compared to March. The manufacturing PMI in April was 49, below the boom - bust line [14]. 3.4 Steel Production - In April, the crude steel output was 86.01 million tons, similar to the same period last year. From January to April, the cumulative output was 345 million tons, a year - on - year increase of 0.4%. The pig iron output was 289 million tons, a year - on - year increase of 0.8%. The weekly output of the five major steel products was 8.81 million tons, and the cumulative output since this year decreased by 2.2% year - on - year. The cumulative pig iron output increased by 3.9% year - on - year, and although the current pig iron output has declined compared to the previous period, it is still at an absolute high level [17]. 3.5 Blast Furnace Production No specific content provided. 3.6 Building Material Production - The production of rebar has been stable recently, maintaining at around 2.3 million tons. The cumulative rebar output decreased by 5% year - on - year, and the decline has gradually narrowed [22]. 3.7 Rebar Production Profit - The long - process rebar profit in East and Central China is around 160 yuan/ton, and in North China it is around 200 yuan/ton. The long - process spot immediate profit has been good this year, ensuring the production enthusiasm of steel mills [25]. 3.8 Short - Process Production - The short - process production is generally low. Currently, the profit during off - peak electricity hours is basically at the break - even point, and there are overall losses during peak electricity hours [28]. 3.9 Electric Furnace Profit No specific content provided. 3.10 Coil Production - The hot - rolled coil output declined after April and is still lower than the same period last year. The output of medium - thick plates and cold - rolled coils is the highest in the same period. The cumulative output of hot - rolled coils decreased slightly year - on - year, while the output of cold - rolled coils and medium - thick plates increased slightly [33]. 3.11 Hot - Rolled Coil Production Profit - The profit of hot - rolled coils in East China is around 200 yuan/ton, in North China it is around 100 yuan/ton, and in Central China it is around the break - even point. The overall profit of coils is slightly lower than that of rebar [36]. 3.12 Steel Demand - With the decline in price and the arrival of the off - season, the trading volume of construction steel has further decreased to around 100,000 tons, and the spot sentiment has continued to decline [39]. 3.13 Building Material Consumption - In May, the consumption of building materials generally declined, lower than the same period last year. The cumulative apparent consumption of rebar decreased by 5% year - on - year, and that of wire rods decreased by 10% year - on - year. As the demand enters the off - season, attention should be paid to the decline rate [42]. 3.14 Real Estate Data - In April, the newly - started area of real estate decreased by 22% compared to March, and the decline deepened. From January to April, the cumulative year - on - year decrease was 24.1%. From January to April, the land purchase cost decreased by 5.9%, and the construction area decreased by 9.7%, both showing a continuous weakening trend. In the future, it is difficult for the real estate construction demand to improve significantly [44]. 3.15 Real Estate High - Frequency Data - The cumulative year - on - year decrease in the transaction area of commercial housing in 30 cities was 2%, and the cumulative year - on - year decrease in the land transaction area of 100 cities was 1.9% [47]. 3.16 Cement and Concrete - In May, the outbound shipment volume of cement and concrete was relatively balanced but lower than the same period last year [50]. 3.17 Fixed - Asset Investment - From January to April, fixed - asset investment increased by 4% year - on - year, and the growth rate decreased by 0.2% compared to the period from January to March. Infrastructure investment increased by 10.85%, and the growth rate decreased by 0.65%. Manufacturing investment showed a slight weakening trend [53]. 3.18 Local Government Bonds - From January to April, the national issuance of new local government bonds was 1.49 trillion yuan, including 302.3 billion yuan of general bonds and 1.19 trillion yuan of special bonds. The issuance speed decreased in April. More than 80% of the 2 - trillion - yuan refinancing special bond resources have been implemented this year, and the peak issuance period has passed. Subsequently, the issuance of local government bonds will mainly be new bonds [56]. 3.19 Coil Consumption - The demand for coils remains strong, at a relatively high level in the same period. The cumulative apparent consumption of hot - rolled coils increased by 1% year - on - year, that of cold - rolled coils increased by 0.9%, and that of medium - thick plates increased by 2.7% [58]. 3.20 Automobiles and Home Appliances - From January to April, automobile sales were 10.06 million, a year - on - year increase of 10.8%, including 2.16 million exports, a year - on - year increase of 15.2%. From January to April, the output of air conditioners increased by 7.2% year - on - year, refrigerators decreased by 0.7%, and washing machines increased by 10.9%. Home appliance exports still maintained positive growth [62]. 3.21 Steel Exports - Steel exports remained at a high level. From January to April, the export volume was 37.89 million tons, a year - on - year increase of 8.2%. There was a certain "rush - to - export" factor in the early stage, and the export volume may decline later. Since this year, the export of steel billets has increased significantly, with a cumulative export of 3.34 million tons from January to April, a year - on - year increase of 2.49 million tons [65]. 3.22 Steel Inventory - Currently, steel inventory is still in the destocking stage, and the destocking is usually basically completed by the end of June [67]. 3.23 Rebar Inventory - Rebar inventory is seasonally destocking. Although the absolute level is low, the inventory - to - consumption ratio is basically normal. According to simple seasonal projections, the inventory will continue to decline [70]. 3.24 Hot - Rolled Coil Inventory - The destocking of hot - rolled coil inventory is relatively fast, and it has now dropped to a low level in the same period. According to seasonal projections, the inventory will continue to decline, but due to the possible weakening of exports, the demand may face a more - than - seasonal decline [73]. 3.25 Inventory of Other Varieties - The inventory of wire rods is similar to that of rebar, with a relatively low absolute level. The destocking of medium - thick plate inventory is going smoothly, while the cold - rolled coil inventory shows counter - seasonal accumulation [78]. 3.26 Rebar Basis - The rebar basis remained high in May with little change. Futures prices fell faster, while spot prices were somewhat resistant due to low inventory. According to past rules, it is highly likely that the basis will decline after June. Currently, the basis is at a relatively high level in the same period, with limited upward space. Attention should be paid to the possibility of basis weakening caused by demand decline [82]. 3.27 Hot - Rolled Coil Basis - The hot - rolled coil basis strengthened in May. The good destocking of spot inventory, strong domestic demand, and high export volume supported the relatively strong operation of the spot market. Later, attention should be paid to the possible decline in exports, which may put downward pressure on the hot - rolled coil basis [86]. 3.28 Rebar Monthly Spread - The spread between the October and January contracts of rebar was low and fluctuated little [91]. 3.29 Hot - Rolled Coil Monthly Spread - The hot - rolled coil monthly spread strengthened in May. After approaching the flat - water level, there was a lack of further upward momentum [95]. 3.30 Coil - Rebar Spread No specific content provided. 3.31 Spot Regional Spread No specific content provided. 3.32 Spot Variety Spread No specific content provided.

Core Viewpoint - The steel market is experiencing a slight decline in both spot and futures prices, with a weak balance between supply and demand leading to a bearish outlook for steel prices in the short term [1][14]. Group 1: Market Analysis - On May 8, the spot steel market saw a slight decrease, with major futures contracts all declining. Rebar prices hit a one-month low at 3047 yuan/ton, while hot-rolled steel dropped by 1.18% and iron ore and coking coal fell by over 2% [1][14]. - The National Development and Reform Commission announced plans to launch approximately 3 trillion yuan worth of quality projects this year, which is expected to boost steel demand and positively impact steel prices [2][14]. - After the holiday, total inventory of five major steel products increased by 289,700 tons to 14.76 million tons, ending a nine-week decline. However, apparent demand dropped significantly by 1.25 million tons to 8.45 million tons, indicating limited recovery in demand post-holiday [3][14]. Group 2: Production and Inventory - Weekly production of rebar decreased by 98,500 tons, with apparent demand dropping nearly 30% or 778,000 tons, leading to an inventory increase of 96,300 tons. Hot-rolled steel production slightly increased, but apparent demand fell by nearly 7% [3][4]. - The overall inventory situation shows a slight increase in both factory and social inventories, indicating a potential oversupply in the market [3][14]. Group 3: Price Trends - As of May 8, the average prices for various steel products showed slight declines, with rebar at 3340 yuan/ton and hot-rolled steel at 3340 yuan/ton, reflecting a general downward trend in the market [7][14]. - Futures prices for all major steel products closed lower, with rebar futures down 1.74% and iron ore futures down 2.73%, indicating bearish sentiment in the market [9][14]. Group 4: Raw Material Market - The price of imported iron ore showed a slight decline, with supply and demand remaining stable but concerns about future demand persisting. The market expects iron ore prices to fluctuate within a narrow range [12][14]. - Coking coal prices remained stable, supported by good demand from steel mills, although some steel mills have reduced their purchasing activity due to high inventory levels [12][14]. - Scrap steel prices remained stable with minor fluctuations, but the overall market sentiment is weak due to reduced demand from electric arc furnace steel mills [12][14].