1. Report's Industry Investment Rating - No information about the industry investment rating is provided in the report. 2. Core View of the Report - The real - demand for steel is weak, and steel prices are still in the process of finding a bottom [1][3] 3. Summary by Related Catalogs 3.1 Total Quantity Contradictions - Macro Policy - The 2025 government work report's GDP target is about 5%, the deficit is 4%, the inflation target is 2%, the local government special bond scale is 4.4 trillion, and the ultra - long - term special sovereign bond scale is 1.3 trillion. The Politburo meeting on April 28th did not issue any unexpected policies, and China will enter a policy window period. In May, the M1 - M2 scissors gap was - 5.6, and the decline continued to narrow [7] 3.2 Total Quantity Contradictions - Capital Supply - In March 2025, the ultra - long - term special sovereign bond scale was 1.3 trillion. On May 20th, the loan market quotation rate (LPR) was lowered for the first time this year. On May 15th, the deposit reserve ratio of financial institutions was lowered by 0.5 percentage points [11] 3.3 Total Quantity Contradictions - Capital Demand - Relevant data on new social financing scale, resident medium - and long - term loans, new RMB loans, and enterprise medium - and long - term loans are presented, but no specific conclusions are drawn from the data [13][14][15][16] 3.4 Real Estate 3.4.1 Sales - Housing prices show signs of stabilizing, and the decline in new home sales has narrowed. Rigid demand is related to population growth, urbanization rate, and resident leverage ratio. Investment demand is related to housing prices. Housing prices lead to second - hand housing sales, and second - hand housing sales lead to new home sales [17][20][22] 3.4.2 New Construction and Land Transactions - Land acquisition leads new construction by 6 months [24] 3.5 Infrastructure 3.5.1 Funds - Traditional funds include public fiscal expenditure, government - funded expenditure, and special bonds. Emerging funds involve quasi - fiscal policies, such as 700 billion yuan of the 1 - trillion - yuan ultra - long - term special treasury bonds in 2024 being used for "two major" construction projects, and a 1.3 - trillion - yuan ultra - long - term special sovereign bond in March 2025 [26][27][30][31] 3.5.2 Projects - Data on the construction industry PMI and the start - up investment amount of major projects are presented [33] 3.6 Manufacturing 3.6.1 General Situation - Supported by new factors, the production and sales of major industrial products maintain high growth, but exports face shocks [34] 3.6.2 Production and Sales of Major Industrial Products - The production and sales of automobiles, white goods, excavators, and other products are presented, with specific production data and year - on - year growth rates [39][40] 3.6.3 Production Enterprises' Orders and Sales - The planned and actual production of household appliances such as air conditioners, refrigerators, and washing machines, as well as their domestic sales data, are presented [43] 3.6.4 Automobile Production and Sales - The automobile industry operates on a production - based - on - sales model, with structural contradictions in production and sales by variety. Leading indicators include enterprise orders [57] 3.6.5 Machinery Production and Sales - The machinery industry operates on a production - based - on - sales model, and the export proportion of sub - varieties is increasing year by year. Leading indicators include enterprise orders [65] 3.6.6 Ship Production and Sales - Shipbuilding is driven by economic growth, manufacturing capacity changes, supply - demand patterns, renewal cycles, and transportation efficiency in different periods. Currently, shipyards have sufficient orders on hand, and new orders continue to grow at a high rate [70] 3.7 Steel Direct Exports - Steel exports are adjusting passively by trading price for volume. Vietnam's anti - dumping tax has a great impact on China's steel exports to Vietnam, and the traditional price - for - volume model is affected [71][74] 3.8 Steel Demand - Steel demand is gradually peaking, and negative feedback should be vigilant. Data on spot transactions and variety price difference structures are presented [83][89][91]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - In May, the core of black commodity trading was the confirmation of loose coking coal supply and the decline of warehouse receipts. The accelerated decline of thermal coal spot prices and the seasonal peak - to - trough decline of hot metal led to a pessimistic outlook on thermal coal and a weakening expectation of steel demand, accelerating the decline of coking coal prices and dragging down the overall black price center. In June, due to marginal improvement in macro - expectations, political turmoil in Mongolia, and domestic safety production month activities, the market focused on supply reduction, etc., leading to a rebound of coking coal to repair the basis [5]. - Overall, short - term steel demand is expected to remain stable, hot metal shows resilience, the contradictions of coking coal and coke are generally weakening, but the price ceiling pressure is still obvious. It is recommended to be cautious in the short - term and maintain the strategy of short - selling in the medium - to - long - term [74]. Summary by Relevant Catalogs 1. Market Review - In May, the trading logic was similar to April, centered on the confirmation of loose coking coal and the decline of warehouse receipts. The accelerated decline of thermal coal prices and the peak - to - trough decline of hot metal led to more capital inflows and price drops. In June, the logic changed due to macro - factors, and coking coal rebounded to repair the basis [5]. 2. Current High - Frequency Data of Coking Coal and Coke 2.1 Coking Coal Supply Turned Negative in May, Showing the Feature of "Production Based on Sales" - Since May, with the accelerated decline of coal prices and continuous discount in the futures market, high inventory at the pithead forced production cuts, high port inventory restricted customs clearance, and imports decreased without hedging. The weekly growth rates of Mongolian coal customs clearance, sea - borne coal arrival, and domestic mine production all declined, showing the feature of "production based on sales". But supply may recover when prices stabilize [19]. 2.2 Coking Coal Inventory Concentrated in the Upstream, with Low Inventory in the Downstream - Inventory accumulation was mainly in upstream mines and import ends, while inventory in downstream coking links was low. This situation led to production cuts and import reduction, and raised concerns about downstream restocking. However, these phenomena are the result of overall demand decline, and short - term supply reduction has limited price - supporting effect [27]. 2.3 After Basis Repair, Coking Coal Needs to Face Terminal Demand - With the decline of spot prices in May and the rebound of futures prices in June, the coking coal basis shrank rapidly. Now, it is necessary to answer whether demand can support the market after the marginal recovery of supply, but the current supply - demand pattern cannot provide an accurate answer [37]. 2.4 The Emergence of the Israel - Iran Conflict Brought New Entrants to Coking Coal - After the sudden intensification of the Israel - Iran conflict, crude oil prices soared, and new funds entered the coking coal market based on the logic that rising crude oil prices would drive up thermal coal and then coking coal. However, historical data shows that the short - term correlation between crude oil and domestic and foreign thermal coal is not high [43]. 2.5 Coke Production and Profit Remained Stable - During the price decline, coke profit loss was small, and since May, it has been continuously repairing. Considering the low - cost coking coal in June, coke profit and production are expected to be sustainable. If downstream demand cannot keep up, coke may be the first to deteriorate [51]. 2.6 Coke Faced Greater Short - Term Inventory Pressure - Due to the continuous improvement of coking profit and the weakening of downstream hot metal demand, coke inventory pressure did not ease in May. Inventory accumulation was mainly in coking plants, and downstream steel mills had strong bargaining power. Even if there is an unexpected reduction in coking coal supply, the coke segment will still be weak [55]. 2.7 The Decline of Hot Metal Slowed Down, and There Were Still Few Maintenance Plans - Since May, hot metal production peaked as expected, but the decline slowed down at the end of May, which was related to the accelerated reduction of scrap steel. In the future, hot metal is expected to remain at a high level, so the decline of direct demand for coking coal and coke may not be smooth [62]. 2.8 Coke Turned to Discount, but Profit Improved - The coke futures market turned into a premium for wet - quenched coke. In the current situation, it may not have a positive impact and may even keep production and profit at a high level for a longer time, which is worthy of attention [66]. 3. Strategy Recommendation - Coking coal supply - demand: The accelerated price decline in May led to continuous marginal reduction in supply. The supply - demand contradiction improved, and this situation continued in June, but the improvement will disappear as prices rise [74]. - Coke supply - demand: The cost of coke collapsed faster, and it will be in a low - cost pattern in June. Supply elasticity is high, while demand may face an increase in hot metal. Overall, the supply - demand of coke in June is expected to remain loose [74]. - Steel demand: Real - estate high - frequency data is weak, infrastructure funds have limited improvement and are in the off - season, and the manufacturing industry shows resilience but also has long - term risks. Short - term steel demand is expected to be stable, and it is recommended to be cautious in the short - term and maintain short - selling in the medium - to - long - term [74].