Report Industry Investment Rating - Not provided in the report Core Viewpoint - Steel prices are expected to fluctuate strongly due to rising costs, but the high inventory level in the supply - demand aspect restricts significant price increases. Steel mill profits may be continuously compressed, and attention should be paid to the 5 - 10 positive spread arbitrage [3][5] Summary by Directory 1. Domestic Macro - The macro - environment is generally warm. In 2026, the government set the GDP growth target at 4.5% - 5%, the urban surveyed unemployment rate at around 5.5%, and the CPI increase at around 2%. Key fiscal and monetary policy tools include a fiscal deficit rate of about 4%, issuing 1.3 trillion yuan in ultra - long - term special treasury bonds, arranging 4.4 trillion yuan in local government special bonds, and 755 billion yuan in central budget - internal investment [6][8] 2. Industry Chain - **Supply - demand perspective**: The high inventory level of steel restricts price increases, and the supply - demand relationship drives prices downward [5][9][11] - **Cost perspective**: The cost of steelmaking is rising. Iron ore prices are rising due to factors such as near - end delivery, inventory structural contradictions, and rising freight costs. Coking coal prices are firm due to energy substitution expectations [5][13][17] 3. Rebar Fundamental Data - **Basis and spread**: Last week, the Shanghai rebar spot price was 3230 (- 20) yuan/ton, the 05 - contract price was 3123 (- 19) yuan/ton, the 05 - contract basis was 107 (- 1) yuan/ton, and the 05 - 10 spread was - 28 (- 5) yuan/ton. As demand enters the peak season, attention should be paid to the positive spread arbitrage [19][23] - **Demand**: Second - hand housing transactions remain high, indicating rigid demand, but new - house transactions are at a low level, showing weak market confidence. Land transaction area also remains low. Overall, rebar demand is slowly recovering [24][28][29] - **MS weekly data**: Demand is rising, and inventory is slightly decreasing. Long - and short - process supply and inventory data show different trends [32][33][35] - **Production profit**: Due to rising raw material prices, rebar production profit is being compressed. Last week, the rebar spot profit was 113 (- 25) yuan/ton, the main - contract profit was 64 (- 28) yuan/ton, and the East China rebar valley - electricity profit was 6 (- 11) yuan/ton [37][41] 4. Hot - Rolled Coil Fundamental Data - **Basis and spread**: Last week, the Shanghai hot - rolled coil spot price was 3280 (+ 10) yuan/ton, the 05 - contract futures price was 3297 (+ 2) yuan/ton, the 05 - contract basis was - 17 (+ 8) yuan/ton, and the 05 - 10 spread was - 6 (+ 1) yuan/ton. As demand enters the peak season, attention should be paid to the positive spread arbitrage [43][47] - **Demand**: Overseas steel prices are rising, increasing China's hot - rolled coil export profit and export volume. The hot - rolled coil trading volume has improved significantly, and the spot - futures speculative sentiment has also improved [48][54][55] - **MS weekly data**: Hot - rolled coils maintain low production, and inventory is decreasing rapidly [57][58] - **Production profit**: Due to rising raw material prices, hot - rolled coil production profit is being compressed. Last week, the hot - rolled coil spot profit was 1 (+ 6) yuan/ton, and the main - contract profit was 88 (- 7) yuan/ton [61][64] 5. Variety Regional Difference - The report shows the price differences between different regions for rebar, cold - rolled coils, hot - rolled coils, and medium - thick plates [71][72][73] 6. Cold - Rolled and Medium - Thick Plate Supply - Demand - Inventory Data - The report presents the seasonal data of total inventory, production, and apparent consumption for cold - rolled coils and medium - thick plates [77][78] 7. Small - Variety Steel Inventory - The report shows the inventory data of small - variety steels such as strip steel, galvanized coils, color - coated coils, welded pipes, seamless pipes, and special - quality steels [80]