Report Industry Investment Rating No relevant content provided. Core Viewpoints - The steel market will continue to fluctuate, with the price range determined by factors such as macro - trading expectations, seasonal demand, and inventory pressure [2]. - The sentiment of silicon - iron and manganese - silicon has improved, but the price is under pressure due to supply - demand imbalance [3][5]. - For coking coal and coke, the decline in spot auction prices of coking coal has narrowed, and the market is expected to be supported by potential downstream replenishment, with a strategy of buying far - month contracts at low prices [6]. - Iron ore faces significant upward pressure, with inventory accumulation expected to continue, and the operation strategy is to short at high prices [7]. Summary by Related Catalogs Steel - On December 3rd, the closing prices of far - month and near - month contracts of steel futures showed different changes, with some contracts rising and some falling. The spot prices of steel in different regions were relatively stable, and the basis also changed [1]. - The spot trading volume continued to decline on Wednesday, providing limited upward momentum for prices. The main contracts are shifting to 05. Macro factors such as US interest - rate cut expectations and domestic economic meetings are worth observing. The seasonal off - season in the industry has not formed a unified contradiction, and the supply - demand structure is relatively stable. Hot - rolled coils have inventory and production pressure, but there is no strong short - selling intention in the low - profit environment of steel mills. There may be some replenishment behavior in December, providing support for low prices [2]. - The trading strategy is to adopt a unilateral range - trading approach, consider participating in cash - and - carry arbitrage for hot - rolled coils, or use option strategies to assist in spot procurement and sales [8]. Silicon - iron and Manganese - silicon - Recently, the prices of silicon - iron and manganese - silicon have rebounded with the black - metal sector, but the driving force is insufficient. The steel price is under pressure, the direct demand is weakening, and the alloy factories have a high production volume despite poor profits. The supply - demand surplus pattern continues, and the price will be under pressure [5]. - Investment customers are advised to short at high prices, and industrial customers can use accumulation options to protect their spot positions [8]. Coking Coal and Coke - On the spot side, the trading sentiment of coke in the domestic market is average, the decline in the spot auction prices of coking coal has narrowed, and some coal types have slightly increased. In the futures market, the performance is still weak. The steel data is good, and the coking coal price is affected by the slowdown in downstream replenishment. The market is expected to be supported by potential downstream replenishment in mid - to - late December, and the strategy is to buy far - month contracts at low prices [6]. - The speculative strategy is to mainly buy far - month contracts at low prices [8]. Iron Ore - Iron ore is at the upper limit of the range - bound movement. In the short term, the arrival of iron ore at ports has increased, and the shipment will remain stable. In the medium term, the inventory will continue to accumulate. The decline in steel - mill profits has affected production willingness, and the port inventory of iron ore will continue to rise. The operation strategy is to short at high prices [7]. - The strategy is to hold short positions [8].

Report Summary 1. Report Industry Investment Rating - **Steel**: Adopt a unilateral range trading strategy; consider participating in cash-and-carry arbitrage for hot-rolled coils or use option strategies to assist spot procurement and sales [3] - **Silicon Ferroalloy and Manganese Ferroalloy**: Investment clients should short on rallies, and industrial clients can use accumulating options to protect spot exposures [3] - **Coking Coal and Coke**: Speculators should mainly go long on far-month contracts at low prices [3] - **Iron Ore**: Hold short positions [3] 2. Core Viewpoints - The upward momentum of steel prices is weak, and the black sector is in a range-bound pattern. There is support at low prices due to potential restocking, and it is necessary to wait for the implementation of the production cut logic and observe the start of winter storage restocking [3] - The prices of silicon ferroalloy and manganese ferroalloy are under pressure due to over - supply and weak demand, despite strong cost support [3] - The decline in coking coal spot auction prices has narrowed, and some coal varieties have rebounded slightly. The futures are still weak. It is expected that the previous low will form strong support, and far - month contracts can be bought at low prices [3] - Iron ore is at the upper limit of the range. Due to increasing inventory pressure, it is advisable to short on rallies [3] 3. Summary by Related Catalogs Futures Market - **December 2nd Closing Prices and Changes**: The far - month contracts RB2605, HC2605, I2605, J2605, JM2605 closed at 3169.00 yuan/ton, 3322.00 yuan/ton, 775.50 yuan/ton, 1764.50 yuan/ton, and 1179.50 yuan/ton respectively, with changes of 25.00 yuan, 15.00 yuan, 3.50 yuan, 21.50 yuan, and 15.50 yuan, and the corresponding percentage changes were 0.80%, 0.45%, 0.45%, 1.23%, and 1.33%. The near - month (main) contracts RB2601, HC2601, I2601, J2601, JM2601 closed at 3133.00 yuan/ton, 3325.00 yuan/ton, 800.50 yuan/ton, 1629.50 yuan/ton, and 1096.50 yuan/ton respectively, with changes of 11.00 yuan, 10.00 yuan, 4.00 yuan, 39.00 yuan, and 20.00 yuan, and the corresponding percentage changes were 0.35%, 0.30%, 0.50%, 2.45%, and 1.86% [1] - **Cross - month Spreads and Changes**: On December 2nd, the cross - month spreads RB2601 - 2605, HC2601 - 2605, I2601 - 2605, J2601 - 2605, JM2601 - 2605 were - 36.00 yuan/ton, 3.00 yuan/ton, 25.00 yuan/ton, - 135.00 yuan/ton, and - 83.00 yuan/ton respectively, with changes of - 3.00 yuan, - 4.00 yuan, 1.50 yuan, 15.50 yuan, and 7.00 yuan [1] - **Spreads/Ratios/Profits and Changes**: On December 2nd, the coil - to - rebar spread, rebar - to - ore ratio, coal - to - coke ratio, rebar paper profit, and coking paper profit were 192.00 yuan, 3.91, 1.49, - 60.33 yuan, and 171.16 yuan respectively, with changes of - 1.00 yuan, 0.00 yuan, 0.00 yuan, - 5.18 yuan, and 5.35 yuan [1] Spot Market - **December 2nd Spot Prices and Changes**: The spot prices of Shanghai rebar, Tianjin rebar, Guangzhou rebar, Tangshan billet, and the Platts Index were 3320.00 yuan/ton, 3240.00 yuan/ton, 3560.00 yuan/ton, 2990.00 yuan/ton, and 107.80 respectively, with changes of 10.00 yuan, 0.00 yuan, 0.00 yuan, 0.00 yuan, and 0.45 [1] - **Base Prices and Changes**: On December 2nd, the base prices of HC main contract, RB main contract, I main contract, J main contract, and JM main contract were - 5.00 yuan/ton, 187.00 yuan/ton, 9.00 yuan/ton, 158.19 yuan/ton, and 123.50 yuan/ton respectively, with changes of 2.00 yuan, 11.00 yuan, - 2.00 yuan, - 10.00 yuan, and - 128.50 yuan [1]

1. Report Industry Investment Ratings - Steel: Neutral. The report suggests a wait - and - see approach for steel investment [5]. - Coking Coal and Coke: Neutral. It is recommended to wait and see for both unilateral and arbitrage trading [69]. - Iron Ore: Bearish. The report advises holding short positions for unilateral trading and waiting and seeing for arbitrage [118]. 2. Core Views of the Report - The steel industry is currently facing a situation where the supply - demand structure has not deteriorated significantly, but the inventory of hot - rolled coils is a pressure point. In December, attention should be paid to new macro - trading expectations, and the production of molten iron may decline further. The market is in a state of range - bound oscillation [5]. - The coking coal and coke market has seen the first round of price cuts, and the futures market has priced in 3 - 4 rounds of price cut expectations. Although the steel data is still good, the coking coal price has weakened due to the slowdown in downstream restocking. The market may need to wait for the start of the next round of downstream restocking in mid - December [69]. - The iron ore market is under pressure as the inventory has increased again. With stable supply and weakening demand in the future, the inventory is expected to continue to accumulate slightly. The decline in steel mill profitability may lead to production cuts, and the iron ore price is difficult to break through the upper range, so it is advisable to short at high prices [118]. 3. Summaries According to Relevant Catalogs 3.1 Steel - **Supply**: The molten iron production has continued a slight decline, with a decrease of 1.6 to 234.68 wt in the current week. The daily consumption of scrap steel has remained stable, matching last year but lower than 2023. In the future, molten iron production is likely to decrease, and there are still some production - cut plans in December [5]. - **Demand**: The weekly supply - demand structure of steel has not deteriorated further. The total inventory has continued to decline, and the apparent demand has slightly weakened, but there are no major contradictions. This year's demand has shown a differentiated pattern: rigid demand provides support, speculative demand is occasionally active but generally weak, and external demand is rigid, with a slight decline in exports after October [5]. - **Inventory**: The inventory of five major steel products has continued to decline, but the hot - rolled coil inventory and de - stocking pressure are relatively obvious. The inventory of rebar is in a healthier state, but the absolute levels of hot - rolled coils and cold - rolled coils are higher than in previous years, and the inventory de - stocking is slow [5]. - **Basis/Spread**: The basis of both hot - rolled coils and rebar has weakened. As of Friday, the basis of rb2601 in the East China region (Hangzhou) was 100, with a weekly decline of 13; the basis of hc2601 in the East China region (Shanghai) was - 12, with a weekly decline of 12 [5]. - **Profit**: The immediate profit of long - process steelmaking is meager, and most electric furnaces are in the red. The profitability rate of steel mills is 35%, with a weekly decline of 2.6% [5]. - **Valuation**: The basis of hot - rolled coils is slightly better than that of rebar, making it more suitable for cash - and - carry arbitrage. From an industrial perspective, the production profit of steel mills is meager, and the industrial relative valuation is still not high [5]. - **Macro and Risk Appetite**: In December, attention should be paid to new macro - trading expectations, such as the game of the new round of interest - rate cut expectations in the United States, the Central Economic Work Conference in China, and an important Politburo meeting at the end of the year [5]. - **Investment View**: Adopt a wait - and - see approach. In the short term, the market is in a range - bound state. Wait for the implementation of the production - cut logic and then observe the start of the winter restocking drive [5]. 3.2 Coking Coal and Coke - **Demand**: The supply - demand situation of steel is good, with the apparent demand of five major steel products at 855.71 (+5.80) and production at 888.00 (-6.16). However, the profitability rate of steel mills has decreased to 35.06% (-2.60%), and the daily molten iron production of 247 steel mills has decreased to 234.68 (-1.60). There is still an expectation of a decline in molten iron production [69]. - **Coking Coal Supply**: The domestic coking coal supply has limited recovery. Although some mines in the main production areas have resumed production, some are still restricted by underground conditions, and recent safety inspections have affected a small number of mines. Mongolian coal trading is sluggish, while the quotation of overseas coal has risen. As of November 27, the CFR quotation of Australian Peak Downs coal was 215.85 US dollars (+1.65) [69]. - **Coke Supply**: The coke supply has increased. This week, the daily coke production was 110.1 (+1.2), and the coking profit was 46 (+27). With the decline in raw coal costs and the end of equipment maintenance and the resumption of production restrictions, the coke supply has recovered rapidly [69]. - **Inventory**: Downstream enterprises have slowed down their procurement rhythm, mainly consuming raw material inventories, while upstream enterprises have continued to accumulate inventories, putting downward pressure on prices [69]. - **Basis/Spread**: The first round of coke price cuts has been launched. After implementation, the warehouse - receipt cost is 1700, and the port trade quotation has fallen in advance, with a warehouse - receipt cost of 1600. The futures price around 1570 has priced in 3 - 4 rounds of price cut expectations. The warehouse - receipt cost of Mongolian coal is 1174, but the actual cost should be lower due to warehouse - receipt processing issues, and the near - month contracts are at a certain discount [69]. - **Profit**: The profitability rate of steel mills is 35.06% (-2.60%), and the coking profit is 46 (+27) [69]. - **Summary**: In December, pay attention to whether the market logic will shift. From a fundamental perspective, the steel data is still good, but coking coal prices have weakened due to downstream restocking slowdown. From a valuation perspective, the decline may be nearing its end, but from a driving perspective, the market may need to wait for the start of the next round of downstream restocking in mid - December [69]. 3.3 Iron Ore - **Supply**: The current shipment data has decreased by 20.2 tons per day week - on - week to 443 tons per day. Australia's shipments have decreased by 34.0 tons per day, Brazil's have increased by 6.7 tons per day, and non - mainstream mines' have increased by 7.1 tons per day to 83.4 tons per day. China's arrival volume has increased by 23.1 tons per day, with Australia's arrival increasing by 31.6 tons per day, Brazil's decreasing by 2.3 tons per day, and non - mainstream arrivals decreasing by 6.2 tons per day [118]. - **Demand**: The molten iron production of steel mills has slightly decreased to 234.68 tons (-1.6). The profitability ratio of steel mills has continued to decline, dropping by 2.6% to 35.06%. According to the maintenance plan, molten iron production is expected to continue a slight decline. The average daily port clearance volume of 47 ports has increased by 1.67 tons to 345.06 tons, and the port inventory has increased by 166.37 tons, exceeding the level of the same period last year [118]. - **Inventory**: The port inventory of 47 ports has increased by 166.37 tons week - on - week. With stable supply and weakening demand in the future, the inventory is expected to continue to accumulate slightly [118]. - **Profit**: The profit of steel mills has continued to decline, which has begun to affect molten iron production [118]. - **Valuation**: The short - term valuation is neutral [118]. - **Summary**: Although the Wenhua Index has been strong, the Black Chain Index has been weak. Iron ore has reached the upper limit of the range - bound oscillation. Fundamentally, the short - term arrival volume has increased, and the subsequent shipments will remain stable. In the medium term, the inventory will continue to accumulate under the pressure of molten iron production. The decline in steel mill profitability may lead to production cuts, and the iron ore price is difficult to break through the upper range, so it is advisable to short at high prices [118].