Report Industry Investment Rating No relevant content provided. Core Viewpoints - Steel: The steel market is in a volatile range. The upward rebound trading story is not well - developed, and the cost - collapse narrative is also unsmooth. The price will enter a period of tug - of - war, and the rebound height of finished products is relatively limited. It is advisable to hedge at the upper limit of the range and rotate inventory during the volatile period. The steel basis maintains a structure where futures are at a discount to spot, and there may be a reverse - spread logic in the spot off - season [5]. - Coking Coal and Coke: Spot - end coking coal auctions continue to weaken, but the rate of unsuccessful auctions has decreased. Big mines have lowered long - term agreement prices. The market still expects coke price cuts. On the futures side, coking coal prices were affected by supply - side news but did not hold above 800. The black - chain index is weak, and the 20 - day line shows obvious pressure. It is recommended that industrial customers actively participate in hedging, and wait and see for unilateral trading [6]. - Ferrosilicon and Silicomanganese: The fundamentals of ferrosilicon and silicomanganese are stable and follow the steel market. Ferrosilicon production has decreased in some regions, but demand has weakened, and costs have declined. Silicomanganese supply has increased, demand has weakened, and cost support has also weakened [7]. - Iron Ore: The overall situation of the iron ore market remains weak. Iron ore shipments are increasing, and port inventories are starting to accumulate. The downstream pressure is intensifying, and it is more likely that steel products will be weaker than iron ore [8]. Summary by Related Catalogs Futures Market - **Contract Closing Prices and Changes**: - On June 17, for far - month contracts, RB2601 closed at 2974 yuan/ton (unchanged), HC2601 at 3091 yuan/ton (up 3 yuan, 0.10% increase), I2601 at 670 yuan/ton (down 1 yuan, - 0.15% decrease), J2601 at 1388 yuan/ton (up 13.5 yuan, 0.98% increase), and JM2601 at 807 yuan/ton (up 9 yuan, 1.13% increase). - For near - month contracts, RB2510 closed at 2981 yuan/ton (up 5 yuan, 0.17% increase), HC2510 at 3093 yuan/ton (up 4 yuan, 0.13% increase), I2509 at 699 yuan/ton (down 0.5 yuan, - 0.07% decrease), J2509 at 1365.5 yuan/ton (up 13.5 yuan, 1.00% increase), and JM2509 at 789.5 yuan/ton (up 5.5 yuan, 0.70% increase) [2]. - **Spread and Ratio**: - On June 17, the spread between RB2510 and RB2601 was 7 yuan/ton (up 2 yuan), between HC2510 and HC2601 was 2 yuan/ton (down 1 yuan), between I2509 and I2601 was 29 yuan/ton (down 0.5 yuan), between J2509 and J2601 was - 22.5 yuan/ton (down 1 yuan), and between JM2509 and JM2601 was - 17.5 yuan/ton (down 2.5 yuan). - The coil - to - rebar spread was 112 yuan/ton (down 2 yuan), the rebar - to - ore ratio was 4.26 (up 0.02), the coal - to - coke ratio was 1.73 (up 0.01), the rebar disk profit was 187.15 yuan/ton (up 2.83 yuan), and the coking disk profit was 315.47 yuan/ton (up 2.48 yuan) [2]. Spot Market - **Steel Products**: On June 17, the spot prices of Shanghai rebar, Tianjin rebar, and Guangzhou rebar were 3100 yuan/ton, 3220 yuan/ton, and 3160 yuan/ton respectively (all unchanged). The price of Tangshan billet was 2910 yuan/ton (down 10 yuan), and the Platts Index was 93.10 (down 1.15). The spot prices of Shanghai hot - rolled coil, Hangzhou hot - rolled coil, and Guangzhou hot - rolled coil were 3170 yuan/ton (down 50 yuan), 3220 yuan/ton (unchanged), and 3150 yuan/ton (down 10 yuan) respectively. The billet - to - product spread was 190 yuan/ton (up 10 yuan), and the price of PB ore at Rizhao Port was 716 yuan/ton (down 1 yuan) [2]. - **Coking Coal and Coke**: The spot price of coking coal at Ganqimao Port: Mongolian No. 5 raw coal was 700 yuan/ton (down 1 yuan), Mongolian No. 5 cleaned coal was 860 yuan/ton, Mongolian No. 3 cleaned coal was 70 yuan/ton (down 20 yuan), and the price of Mongolian No. 5 cleaned coal in Hebei Tangshan was 1015 yuan/ton. The price of quasi - first - grade coke at Qingdao Port (ex - warehouse) was 1335 yuan/ton (unchanged) [2]. - **Basis**: On June 17, the basis of HC (main contract) was 77 yuan/ton (down 39 yuan), RB (main contract) was 119 yuan/ton (up 9 yuan), I (main contract) was 31 yuan/ton (unchanged), J (main contract) was 104.98 yuan/ton (up 5.5 yuan), and JM (main contract) was 30.5 yuan/ton (down 14 yuan) [2].

Summary of Conference Call on Coal Transportation and Railway Freight Industry Overview - The conference call primarily discusses the railway freight rates for coal transportation in China, particularly focusing on the impact of coal demand and supply dynamics on pricing strategies [1][2][3]. Key Points and Arguments 1. **Railway Freight Rate Adjustments** - Railway freight rates have been reduced twice in 2025, with the first reduction of 15% at the end of March and a second reduction of approximately 6% at the end of May to early June. The current reduction is set to last until June 30, 2025, but may be extended [2][4]. 2. **Impact of Coal Demand and Supply** - The reductions in freight rates are attributed to weak coal demand and increased upstream production capacity. The railway companies and coal companies are collaborating to adjust prices to maintain transportation volumes and market share [1][5]. 3. **Cost Structure of Railway Industry** - The main costs in the railway industry include depreciation and labor costs, with labor costs rising approximately 5% annually. The Daqin Railway has not increased freight prices since 2015, but there is a potential for price increases in a deflationary environment [6][7]. 4. **Regional Freight Rate Variations** - Freight rates vary significantly by region. For example, the cost of transporting coal from Xinjiang to Qinhuangdao is about 500 yuan per ton, and a 20% reduction could save around 100 yuan. The competition is particularly intense in eastern regions [5][6]. 5. **Future Freight Rate Trends** - If coal demand remains low and production capacity continues to expand, railway companies may continue to lower prices to sustain transportation volumes. The disparity in interests among different regions also affects overall pricing strategies [5][8]. 6. **Monitoring Freight Volume and Rates** - Short-term monitoring of freight volume and rates can be conducted through data from the Ministry of Transport. Recent data indicates a 2% year-on-year decline in June 2025, while May showed a 1% increase [8][9]. 7. **Long-term Outlook for Coal Prices** - The current coal prices are near the cost support line, with spot prices around 610 yuan, close to the cost line of 570-600 yuan. The expectation is for a narrowing of the price decline speed in the short term, with potential demand peaks in summer [16]. 8. **Companies to Watch** - In the current market environment, companies such as China Coal, Huayang Jinkong, and Yanzhou Coal are highlighted as having advantages amid market fluctuations. For long-term investment, China Coal and Shenhua are recommended due to their stable fundamentals and good investment value at current price levels [17]. Additional Important Information - The railway freight rates are influenced by seasonal demand fluctuations, with peak freight activity typically occurring from late June to early July, while the off-peak season runs from mid-July to late August [11]. - The overall transportation capacity remains underutilized, with about 20% of capacity idle despite high levels of coal transportation historically [11][12]. This summary encapsulates the key insights from the conference call regarding the coal transportation industry and railway freight dynamics, providing a comprehensive overview of current trends and future expectations.