Report Industry Investment Rating - Not provided Core Viewpoints of the Report - The hot-rolled coil is currently in a situation where cost support and inventory pressure are in a game under the pattern of weak supply and demand. It is expected to maintain a sideways consolidation, and there are no unilateral driving factors for now. Attention should be paid to the winter storage market in January and the recovery slope of production capacity [5]. Summary by Relevant Catalogs Market行情回顾 - Futures price: The main contract of hot-rolled coil futures increased its open interest by 43,907 lots on Monday, with a trading volume of 511,982 lots. The intraday low was 3,280 yuan, the high was 3,308 yuan, and it closed at 3,287 yuan/ton, up 18 yuan/ton or 0.55% [1]. - Spot price: The price of hot-rolled coil in Shanghai, a major region, was reported at 3,290 yuan/ton, up 20 yuan from the previous trading day [1]. - Basis: The basis between futures and spot was 3 yuan, approaching flat water [2]. Fundamental Data - Supply: As of December 25, the weekly output of hot-rolled coil increased by 16,300 tons to 2.9354 million tons week-on-week, and decreased by 136,000 tons year-on-year. This week's output rebounded after a sharp decline last week, currently near the lowest level of the year and at a near 4-year low, enhancing price support. The reduction in production was mainly due to profit contraction, more steel mill maintenance, some steel mills switching to rebar production, and the seasonal off-season [3]. - Demand: As of December 25, the weekly apparent consumption increased by 87,600 tons to 3.0704 million tons week-on-week, and decreased by 22,900 tons year-on-year. This week's apparent consumption rebounded, and the export rush market emerged, but the winter storage market in January still needs to be monitored [3]. - Inventory: As of December 25, the total inventory decreased by 135,000 tons to 3.7722 million tons week-on-week (social inventory decreased by 106,000 tons, and steel mill inventory decreased by 29,000 tons). The total inventory continued to be destocked, and the destocking accelerated, indicating that demand was resilient in late December, likely due to enterprises rushing to export. However, the total inventory was at a near 4-year high. The subsequent destocking speed needs to be monitored [3]. - Policy: The new regulations on the management of steel export licenses were introduced. In the short term, it will cause export fluctuations, increase supply, and put pressure on prices. In the long term, it will promote industrial upgrading, structural optimization, and competitiveness improvement. The Central Economic Work Conference held in December proposed a proactive fiscal policy and a moderately loose monetary policy, and listed the in-depth rectification of involutionary competition as a key task for 2026, which is beneficial to prices and industry profitability. Efforts will be made to stabilize the real estate market and expand domestic demand [3][4]. - External Macro: In the United States, the core CPI in November increased by 2.6% year-on-year, the slowest growth rate since early 2021, lower than the market expectation of 3%. The overall CPI increased by 2.7% year-on-year, lower than the expected 3.1% [4]. Market Driving Factor Analysis - Bullish factors: Significant decline in supply-side production, expectation of winter storage demand, export rush market, policy support ("14th Five-Year Plan", infrastructure investment), and strong iron ore as a furnace charge [5]. - Bearish factors: Unexpected resumption of steel mill production in January, seasonal weakening of demand, insufficient manufacturing orders, and inventory accumulation suppressing prices [5]. Short-Term View Summary - The hot-rolled coil is currently in a game between cost support and inventory pressure under the pattern of weak supply and demand. Last week's reported output of hot-rolled coil rebounded but was at a relatively low level, and there may still be room for output to rebound in the future. The rebound in apparent consumption shows demand resilience, but the subsequent demand increase is limited. The total inventory continued to be destocked, but the total amount was still at a high level. There is an expectation of a relatively loose macro environment. It is necessary to monitor whether the manufacturing PMI can rise above the boom - bust line. In the future, it is necessary to pay attention to the winter storage market in January and the slope of production capacity recovery. Today's daily line closed with a long upper - shadow阳线, indicating pressure above but also support below. It is expected to mainly maintain a sideways consolidation. There are no unilateral driving factors for now [5].

1. Report Industry Investment Rating - Not provided 2. Core View of the Report - The supply of hot - rolled coils is expected to continue to decline, providing support. The stabilization of furnace materials boosts cost support. The market has digested the off - season demand and the news of export license management through previous price drops, and the macro - economic outlook is positive. Pay attention to the start of winter stockpiling from late December to January before the Spring Festival. The price of hot - rolled coils is expected to continue to fluctuate strongly in the short term [6] 3. Summary by Relevant Catalogs Market行情回顾 (Market Review) - **Futures Price**: The trading volume of the main hot - rolled coil futures contract has shrunk for three consecutive days, with narrow intraday fluctuations. It closed at 3,245 yuan/ton, up 1 yuan/ton, a 0.03% increase, showing a stable and rising trend in the past three trading days [1] - **Spot Price**: The price of hot - rolled coils in Shanghai, a mainstream region, is reported at 3,270 yuan/ton [2] - **Basis**: The basis between futures and spot is 25 yuan, close to flat water [3] Fundamental Data - **Supply**: As of December 11, the weekly output of hot - rolled coils decreased by 56,000 tons to 3.0871 million tons week - on - week, and decreased by 114,100 tons year - on - year. It is at a near 4 - month low, and the output has been continuously declining recently. Steel mills may have the intention to switch production to rebar, which may marginally reduce the supply of hot - rolled coils [4] - **Demand**: The weekly apparent consumption decreased by 28,900 tons to 3.1197 million tons week - on - week, and decreased by 50,200 tons year - on - year. The domestic manufacturing demand is weak, with purchases mainly for rigid needs and a weak willingness for active stockpiling. The export demand is good, sharing the domestic supply pressure and providing support [4] - **Inventory**: The total inventory decreased by 32,600 tons to 3.9709 million tons week - on - week (social inventory decreased by 73,700 tons, and steel mill inventory increased by 41,100 tons). The total inventory is at a near 4 - year high, and inventory pressure continues to accumulate, suppressing prices. Attention should be paid to the further inventory reduction speed [4] - **Policy**: The new regulations on steel export license management have been introduced. In the short term, it may trigger a rush to export, but the long - term expectation of export restrictions is rising, which may lead some export resources to be sold domestically, intensifying the domestic supply pressure. In addition, the Central Financial and Economic Affairs Office emphasized that expanding domestic demand is a key task for next year, but it will take time for the policy to be transmitted to terminal demand, and it is difficult to provide substantial support in the short term [4] Market Driving Factor Analysis - **Bullish Factors**: The expectation of supply reduction is increasing, winter stockpiling demand has started, there is policy support (such as the "14th Five - Year Plan" and infrastructure investment), and the stabilization and strengthening of furnace materials such as iron ore and coking coal enhance cost support [5] - **Bearish Factors**: The demand is seasonally weak, manufacturing orders are insufficient, and inventory accumulation suppresses prices [6]