1. Report Industry Investment Rating - No information provided in the report regarding the industry investment rating 2. Core Viewpoints of the Report - The black metal market is currently in a state where contradictions are not prominent, with unclear valuations and drivers. The market is affected by seasonal factors, and the trading opportunities are limited. Different sub - sectors (steel, coking coal and coke, iron ore) have their own characteristics and trends, and corresponding trading strategies are proposed based on these [8][67][118] 3. Summary by Directory 3.1 Steel - **Supply**: Iron and steel production shows a narrow - range fluctuation. This week, the molten iron output decreased by 0.12 to 228wt, and the daily consumption of scrap steel increased slightly month - on - month, higher than the same period in 2025 but slightly lower than that in 2024. It is basically certain that the molten iron output has bottomed out in the range of 225 - 226. The electric furnace operation will decline after the end of the month to balance the total crude steel output [8] - **Demand**: Building material demand shows obvious seasonality, with a significant decline in transactions. Plate demand remains stable, and the apparent demand for cold - rolled products is slightly better than that for hot - rolled products, but the price difference between cold - rolled and hot - rolled products has not strengthened. The market sentiment index fluctuates around rigid demand, and speculative demand is relatively weak [8] - **Inventory**: The social inventory level of the five major steel products is between 2025 and 2025, and the weekly inventory has shifted from destocking to seasonal inventory accumulation. The inventory accumulation of building materials has increased, while the inventory accumulation rhythm of plates is relatively neutral [8] - **Basis/Spread**: The basis of hot - rolled coils and rebar has slightly decreased. As of Friday, the basis of rb2605 in the East China region (Hangzhou) is 82, a month - on - month decrease of 16; the basis of hc2605 in the East China region (Shanghai) is - 18, a month - on - month decrease of 3 [8] - **Profit**: The profitability of steel mills is moderately low, and the actual production profit is slightly higher than the statistical profit. The profit of rebar is slightly better than that of plates. The profitability rate of steel mills is 39.39%, a weekly change of - 1.3% [8] - **Valuation**: The basis of hot - rolled coils is weaker than that of rebar, which is more suitable for rolling spot - futures positive arbitrage. From an industrial perspective, the production profit corresponding to the futures price is meager, and the relative valuation is neutral [8] - **Macro and Risk Preference**: Commodity fluctuations have increased, and leading varieties have experienced large - scale historical fluctuations [8] - **Investment Viewpoint**: It is recommended to wait and see. The black metal sector currently has no prominent contradictions, and there are no obvious trading opportunities. It is recommended to adopt a range - bound trading strategy for single - side trading, and continue to roll the spot - futures positive arbitrage of hot - rolled coils [8][9] 3.2 Coking Coal and Coke - **Demand**: The steel market has entered the off - season. This week, the apparent demand for the five major steel products is 801.74 (+7.78), and the output is 823.17 (+3.58). The industry data is generally weak, with relatively stable supply, seasonal weakening of demand, and inventory accumulation. The daily average molten iron output of 247 steel mills is 227.98 (-0.12), and the profitability rate of steel mills is 39.39% (-1.30%) [68][82][86] - **Coking Coal Supply**: Although safety production cuts have been tightened in some areas, the Fenwei output has increased this week. Next week, some coal mines will start to take holidays, and the output will gradually decline. The customs clearance of Mongolian coal remains at a high level, but due to port storage capacity pressure, the high - level customs clearance has slowed down. The market trading is cold. The high - price overseas coal has faced increasing resistance from terminal users [68][94] - **Coke Supply**: The daily average coke output this week is 109.8 (-0.4), and the coking profit is - 55 (-11). Affected by production restrictions and cuts, the coking enterprise operation continues to decline [68][95] - **Inventory**: The downstream inventory replenishment has slowed down. The market is still in the winter inventory replenishment cycle, and the upstream inventory is being transferred to the downstream. The coking enterprises' replenishment of raw coal is basically coming to an end, while the steel mills still have inventory replenishment needs. The first round of coke price increase has finally been implemented, but the coking coal price has gradually declined, and the driving force of inventory replenishment on price is weakening [68][98] - **Basis/Spread**: The first round of coke price increase has been implemented, but the market sentiment has not been boosted. The cost of the first - round price - increased warehouse receipts for wet - quenched and dry - quenched coke in the 05 contract is 1729/1756, and the port trading quotation is around 1728. The cost of Mongolian coal warehouse receipts is around 1130 [68] - **Profit**: The profitability rate of steel mills is 39.39% (-1.30%), and the coking profit is - 55 (-11) [68] - **Investment Viewpoint**: It is recommended to cash in the spot at an appropriate time and wait for the opportunity to short the futures after the price rises. It is recommended to wait and see for arbitrage [68] 3.3 Iron Ore - **Supply**: The Reuters shipping data this period shows a month - on - month decline of 4.2 tons per day to 418 tons per day. Among them, the shipping volume from Australia decreased by 13.3 tons per day, that from Brazil increased by 3.8 tons per day, and that from non - mainstream mines increased by 5.2 tons per day to 89.8 tons per day. The total arrival volume in China has increased by 47.9 tons per day month - on - month, with a decrease of 13.2 tons per day from Australia, an increase of 63.4 tons per day from Brazil, and a decrease of 2.4 tons per day from non - mainstream sources [118] - **Demand**: The molten iron output of steel mills this period is basically stable at 227.98 tons (-0.12). The maintenance and resumption of production of steel mills in various regions are routine operations. The profitability rate of steel mills has slightly declined, with a month - on - month decrease of 1.3% to 39.39%. According to the maintenance plan, the molten iron output will continue to increase significantly in February. The daily average port clearance volume of 47 ports has increased significantly by 27.19 tons to 347.71 tons. Therefore, with the decrease in the number of ships waiting at the port, the port inventory has increased by 261.73 tons, continuously higher than the same period last year and reaching a new high for the year [118] - **Inventory**: The daily average port clearance volume of 47 ports has increased significantly to a relatively high seasonal level, but the number of ships waiting at the port has decreased, so the port inventory has increased again, continuously higher than the same period last year and reaching a new high for the year [118] - **Profit**: The profit of steel mills is at a low level [118] - **Valuation**: The short - term valuation is relatively high. From a fundamental perspective, the in - plant inventory of steel mills is still at a relatively low level in recent years. However, the expectation of accelerated resumption of production by steel mills in February and the inventory replenishment before the Spring Festival have a significant impact on the transfer of iron ore inventory, which is one of the reasons for the relatively high iron ore price in the short term [118] - **Investment Viewpoint**: It is recommended to consider going long in the short term and shorting at the pressure level in the long term. It is recommended to wait and see for arbitrage [118]

1. Report's Industry Investment Rating - Not provided in the given content 2. Report's Core View - The black metal market is in a state of narrow - range operation, with each sub - sector showing different trends. The steel market continues to be volatile, with limited upside and downside drivers; the coking coal and coke market is in an oscillating and weak state, and the iron ore market is in a short - term oscillating and strong pattern but faces long - term pressure from inventory [5][66][116] 3. Summary by Relevant Catalogs 3.1 Steel - **Supply**: Iron and steel production shows a slight increase, with iron water production fluctuating within a narrow range and scrap steel daily consumption increasing slightly. It is expected that after January, iron water production will rise, and the electric furnace will gradually reduce production during the Spring Festival, balancing the total output of crude steel [5] - **Demand**: Building materials demand shows obvious seasonality, and the demand for plates is weak in both supply and demand. The spot market lacks fluidity, and the overall demand support for the market is limited [5] - **Inventory**: The social inventory of five major steel products has shifted from destocking to seasonal inventory accumulation, with slow inventory reduction for plates and high - inventory pressure for hot - rolled coils [5] - **Basis/Spread**: The basis of hot - rolled coils remains unchanged, and the basis of rebar decreases slightly [5] - **Profit**: The profitability of steel mills is at a relatively low - to - medium level, and the actual production profit is slightly higher than the statistical profit [5] - **Valuation**: The basis of hot - rolled coils is weaker than that of rebar, making it more suitable for rolling cash - and - carry arbitrage. The relative valuation is neutral [5] - **Macro and Risk Preference**: Commodity fluctuations increase, and there are structural opportunities. Attention should be paid to capital flow and rotation [5] - **Investment View**: Adopt a wait - and - see approach. The black market is in a state of range - bound operation. It is advisable to use an oscillating mindset for single - side trading, and continue rolling cash - and - carry arbitrage for hot - rolled coils [5] - **Trading Strategy**: For single - side trading, consider range or short - term long strategies; for arbitrage, focus on widening the spread between hot - rolled coils and rebar; for cash - and - carry, continue rolling cash - and - carry arbitrage for hot - rolled coils [6] 3.2 Coking Coal and Coke - **Demand**: The steel market enters the off - season, with overall weak industrial data. The demand for coking coal and coke weakens seasonally, and inventory accumulates. However, there is no excessive spot selling pressure, and the market mainly trades at a reasonable valuation [66] - **Coking Coal Supply**: Domestic coal mine production continues to increase but will peak before the Spring Festival. Mongolian coal customs clearance remains at a high level, but market transactions are weak. The price of Australian coal continues to rise, and there is a continuous internal - external price inversion [66] - **Coke Supply**: Coke production remains stable, and the first round of price increases is temporarily postponed, with stable coking profits [66] - **Inventory**: Downstream inventory replenishment slows down, and the market sentiment weakens after the first - round price increase of coke is postponed [66] - **Basis/Spread**: The first - round price increase of coke is temporarily postponed, and the cost of the first - round price increase for the 05 - contract wet - quenched/dry - quenched coke is 1729/1756. The cost of Mongolian coal warehouse receipts drops to around 1120 [66] - **Profit**: The profitability of steel mills increases slightly, while coking profits remain at a loss [66] - **Summary**: The coking coal and coke market is oscillating and weak. The first - round price increase of coke still has a chance to be implemented, but the upward driving force is insufficient. It is recommended to cash out spot stocks at high prices before the festival and wait for short - selling opportunities in the futures market after the price rises [66] - **Trading Strategy**: For single - side trading, cash out spot stocks at appropriate times and wait for short - selling opportunities in the futures market after the price rises; for arbitrage, adopt a wait - and - see approach [66] 3.3 Iron Ore - **Supply**: The shipping volume rebounds, and the arrival volume in China also shows a mixed trend. Australian and non - mainstream ore arrivals increase, while Brazilian ore arrivals decrease [116] - **Demand**: Steel mill iron water production is basically stable, and it is expected to increase significantly in February. The daily port dredging volume decreases, and port inventory continues to be higher than the same period last year [116] - **Inventory**: The port inventory increases again, reaching a new high for the year, which is a long - term pressure factor for the iron ore market [116] - **Profit**: Steel mill profits are at a low level [116] - **Valuation**: The short - term valuation is relatively high [116] - **Summary**: In the short term, the iron ore market is in an oscillating and strong pattern due to factors such as inventory replenishment before the Spring Festival and expected production resumption in February. However, in the long term, port inventory pressure will be the main factor restricting the price [116] - **Investment View**: Neutral [116] - **Trading Strategy**: For single - side trading, consider short - term long positions and short positions at pressure levels for long - term trading; for arbitrage, adopt a wait - and - see approach [116]