Group 1: Steel Industry Investment Rating No investment rating provided in the report [1] Core View The steel price is in a weak downward trend due to the decline in apparent demand and the increase in raw material supply pressure. Although there is an expectation of apparent demand recovery in the peak season, the steel price performance is suppressed before the demand picks up. It is recommended to wait and see for now [1] Summary of Key Points - **Price and Spread**: The prices of most steel products, including rebar and hot-rolled coils, showed a downward trend, with the exception of some regions where the prices remained unchanged. The spread between different contracts and regions also varied [1] - **Cost and Profit**: The cost of steel billets and slabs remained stable, while the cost of rebar from electric furnaces in Jiangsu increased slightly, and the cost of rebar from converters decreased. The profit of hot-rolled coils in different regions showed different trends, with the profit of rebar in South China increasing [1] - **Production**: The daily average pig iron output increased by 5.1%, while the output of the five major steel products decreased by 0.4%. The output of rebar decreased by 3.1%, mainly due to the decrease in electric furnace output, while the output of hot-rolled coils increased by 3.5% [1] - **Inventory**: The inventory of the five major steel products increased by 0.9%, the inventory of rebar increased by 2.2%, and the inventory of hot-rolled coils decreased by 0.3% [1] - **Transaction and Demand**: The building materials trading volume decreased by 1.2%, the apparent demand of the five major steel products increased by 1.9%, the apparent demand of rebar decreased by 2.0%, and the apparent demand of hot-rolled coils increased by 6.8% [1] Group 2: Iron Ore Industry Investment Rating No investment rating provided in the report [3] Core View The iron ore market is currently in a balanced and tight pattern. The global shipment volume of iron ore has decreased significantly, and the arrival volume at 45 ports has also declined. The demand from steel mills has increased, and the port inventory is at a relatively low level year-on-year. It is recommended to buy the Iron Ore 2601 contract on dips and consider the arbitrage strategy of going long on iron ore and short on coking coal [3] Summary of Key Points - **Price and Spread**: The warehouse receipt costs of various iron ore varieties decreased, and the basis of the 01 contract increased significantly. The spreads between different contracts also showed different trends [3] - **Supply**: The global shipment volume of iron ore decreased by 22.5% week-on-week, the arrival volume at 45 ports decreased by 3.1%, and the national monthly import volume decreased by 1.2% [3] - **Demand**: The daily average pig iron output of 247 steel mills increased by 5.1%, the daily average port clearance volume decreased by 0.3%, the national monthly pig iron output decreased by 1.5%, and the national monthly crude steel output decreased by 4.2% [3] - **Inventory**: The inventory at 45 ports increased by 0.2%, the imported ore inventory of 247 steel mills decreased by 0.7%, and the available days of inventory for 64 steel mills decreased by 4.8% [3] Group 3: Coke and Coking Coal Industry Investment Rating No investment rating provided in the report [5] Core View The coke and coking coal markets are currently in a state of adjustment. The coke price has been lowered in the first round, and there is still room for further reduction. The coking coal price is expected to continue to decline in September. It is recommended to short the Coke 2601 contract and the Coking Coal 2601 contract on rallies and consider the arbitrage strategy of going long on iron ore and short on coke/coking coal [5] Summary of Key Points - **Price and Spread**: The prices of coke and coking coal contracts showed an upward trend, while the basis decreased. The spreads between different contracts also showed different trends [5] - **Supply**: The daily average output of all sample coking plants increased by 3.8%, and the daily average output of 247 steel mills decreased by 4.74%. The output of raw coal and clean coal from Fenwei sample coal mines increased [5] - **Demand**: The pig iron output of 247 steel mills increased by 5.1%, and the daily average output of all sample coking plants increased, indicating an increase in demand for coke [5] - **Inventory**: The total inventory of coke increased slightly, with coking plants and steel mills accumulating inventory and ports reducing inventory. The inventory of coking coal decreased slightly, with coal mines, coking plants, and steel mills reducing inventory and washing plants, ports, and border crossings accumulating inventory [5] - **Supply - Demand Gap**: The supply - demand gap of coke changed from a deficit to a surplus, with an increase of 8.8 tons [5]

Investment Rating - The coal industry is rated as "stronger than the market" [6] Core Viewpoints - The report emphasizes that the fundamental goal is to reverse the Producer Price Index (PPI), which has been declining, with July's PPI showing a year-on-year decrease of 3.6%. The stability of coal prices is closely linked to PPI, and the lowest coal prices in 2025 may represent a policy bottom, with expectations for more supply-side policies to be introduced [5][6] - The coal industry is currently undergoing a significant transformation, with strict capacity controls and increasing operational difficulties leading to a tighter supply. The report suggests that coal will remain a key energy source in the short term, despite macroeconomic weaknesses affecting demand [5][6] - The report identifies several investment opportunities in the coal sector, focusing on companies with strong resource endowments, stable operating performance, and high or potentially increasing dividend ratios [6] Summary by Sections 1. Market Overview - The coal index increased by 0.31% this week, outperforming the Shanghai and Shenzhen 300 index, which decreased by 0.81%. Year-to-date, the coal index has dropped by 9.32%, while the Shanghai and Shenzhen 300 index has risen by 13.35% [11][12] 2. Thermal Coal 2.1 Key Indicators - As of September 5, 2025, the Qinhuangdao 5500K thermal coal price was 679 CNY/ton, down 1.6% week-on-week. The average daily production from 462 sample mines was 5.379 million tons, a year-on-year decrease of 6.5% [3][21] 2.2 Annual Long-term Contract Price - The long-term contract price for Qinhuangdao thermal coal (Q5500) was 674 CNY/ton, with a month-on-month increase of 0.9% and a year-on-year decrease of 3.3% [23] 2.3 Spot Prices - The report details various spot prices for thermal coal across different regions, indicating slight fluctuations in prices [27][28] 2.4 Supply and Demand - The report notes a slight decrease in daily consumption by major power plants, with a total inventory of 13.388 million tons, reflecting a minor decline [37][48] 3. Coking Coal 3.1 Key Indicators - The report highlights the price changes for coking coal, with the main coking coal price at Jing Tang Port dropping to 1540 CNY/ton, a decrease of 4.3% week-on-week [62][63] 3.2 Spot Prices - Various spot prices for coking coal are provided, showing both increases and decreases across different regions [66][68]