Report Title - Black Series Weekly Report - Steel Products, dated September 19, 2025 [2] Report Industry Investment Rating - Not provided in the document Core Viewpoints - This period saw a decrease in production and inventory and an increase in apparent demand for rebar; for hot-rolled coils, production and inventory increased while apparent demand decreased. The apparent demand for the five major steel products increased month-on-month. Rebar inventory is being depleted, and the pressure may be relieved. Attention should be paid to the opportunity of narrowing the spread between hot-rolled coils and rebar. The rebar 2601 contract fluctuated, and the hot-rolled coil 2601 contract also fluctuated [5] Summary by Directory 1. Macro - Not provided in the document 2. Supply - In August, China exported 9.51 million tons of steel products, a year-on-year increase of 0.1%, with the growth rate falling by 25.5 percentage points from the previous month. From January to August, China exported 77.49 million tons of steel products, a year-on-year increase of 10.0%, with the growth rate falling by 1.4 percentage points from the previous month [7] - The pig iron output was 2.4102 million tons, a month-on-month increase of 0.047 million tons and a year-on-year increase of 0.1719 million tons [7] - The output of the five major steel products was 8.5546 million tons, a month-on-month decrease of 0.0178 million tons and a year-on-year increase of 0.4744 million tons. Rebar production was 2.0645 million tons, a month-on-month decrease of 0.0548 million tons and a year-on-year increase of 0.1222 million tons; hot-rolled coil production was 3.2649 million tons, a month-on-month increase of 0.0135 million tons and a year-on-year increase of 0.2521 million tons [7] - The EAF operating rate was 70.63%, a month-on-month decrease of 1.29% [7] 3. Inventory - The total inventory of the five major steel products was 15.1974 million tons, a month-on-month increase of 0.0513 million tons and a year-on-year increase of 1.3751 million tons. Rebar inventory was 6.5028 million tons, a month-on-month decrease of 0.0358 million tons and a year-on-year increase of 1.8482 million tons; hot-rolled coil inventory was 3.7799 million tons, a month-on-month increase of 0.0467 million tons and a year-on-year decrease of 0.4374 million tons [7] 4. Demand - The weekly apparent demand for the five major steel products was 8.5033 million tons, a month-on-month increase of 0.07 million tons and a year-on-year increase of 0.0583 million tons [7]

Core Viewpoint - The recent increase in the hot-rolled coil and rebar price spread (referred to as the "coil-rebar spread") is attributed to various factors, with the fundamental pressure on rebar being the primary reason for the widening spread [1] Group 1: Market Dynamics - As of September 12, the coil-rebar spread for the 2510 contract reached 360 CNY/ton, and for the 2601 contract, it was 237 CNY/ton, both hitting historical highs for the same period [1] - The coil-rebar spread has increased by 175 CNY/ton and 101 CNY/ton respectively since July 31 [1] - Rebar production has been under pressure due to a significant drop in prices following the switch to new national standards last August, leading to a decrease in production amid steel mills' losses [1] Group 2: Inventory and Delivery Pressure - The increase in rebar inventory has been notable, with total inventory rising by 19.69% since early August, while hot-rolled coil inventory only increased by 7.29% [1] - In major delivery regions, rebar social inventory reached 1.3522 million tons, a historical high, while hot-rolled coil inventory stood at 330,100 tons, remaining low compared to the past five years [2] - The number of rebar warehouse receipts reached 252,200 tons, the highest since its listing, while hot-rolled coil receipts were at 58,800 tons, also low compared to historical levels [2] Group 3: Future Outlook and Arbitrage Opportunities - The 2601 contract's price spread is less affected by delivery pressures due to the distance from the delivery month, suggesting that arbitrage activities may influence its strength [3] - The potential for narrowing the 2510 contract spread is limited due to ongoing delivery pressures, while the 2601 contract's future movements will depend on rebar production adjustments and demand improvements in the second half of the year [3] - The production of major home appliances has seen a year-on-year decline of 7.2% in September, indicating potential weakness in hot-rolled coil demand moving forward [3]