1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The steel market is generally strong. Last week, the futures market fluctuated upward. Due to geopolitical factors overseas, the market has strong expectations for future energy prices. Coal may be a strong substitute for crude oil, but geopolitical conflicts also have an impact on steel exports. In the short term, hot metal production decreased significantly, while the total output of five major steel products increased slightly week-on-week, and inventory accumulated. The apparent demand increased seasonally. There is a divergence between hot metal and steel mill production data, mainly due to production cuts by some long-process steel mills in the north. Rebar production increased and inventory accumulated, while hot-rolled coil production decreased and inventory accumulated. In the short term, the fundamentals of rebar are stronger than those of hot-rolled coil. The profits of long-process steel mills in the spot market have recovered, while the valley electricity profits of short-process steel mills have declined slightly. The price difference between scrap iron and steel has widened, and the profit margin of the futures market has narrowed. Raw materials are stronger than steel products. In terms of strategies, investors can consider shorting the spread between hot-rolled coil and rebar when prices are high [3]. - The rebar month spread is neutral. The 5 - 10 month spread of rebar is -27 yuan/ton, which has strengthened slightly week-on-week [3]. - Steel mill profits are strong. This week, the profitability rate of 247 steel enterprises is 38.1%, which has decreased slightly week-on-week and is still significantly lower than the same period last year [3][13]. - Scrap steel is strong. According to calculations, current flat electricity production of electric arc furnaces in East China results in a loss of 142 yuan/ton, and valley electricity production results in a loss of 38 yuan/ton [3]. - The inventory of steel products is neutral. The overall inventory of five major steel products has accumulated seasonally [3]. 3. Summary by Relevant Catalogs 3.1 Market Review - As of March 6, 2026, the daily average pig iron output was 227.59 tons, a significant week-on-week decline of 5.69 tons, lower than the same period last year. The blast furnace operating rate of 247 domestic steel enterprises was 77.71%, a significant week-on-week decline; the capacity utilization rate of 85 electric arc furnaces was 20.71%, a significant week-on-week increase [13]. - This week, the total output of five major steel products was 797.24 tons, an increase of 0.47 tons from last week. Among them, rebar production was 173.31 tons, an increase of 8.21 tons from last week; hot-rolled coil production was 301.11 tons, a significant week-on-week decline of 8.5 tons. The production of cold-rolled and medium-thick plates was significantly higher than the historical average [20]. - In terms of demand, the total consumption of five major steel products this week was 691.35 tons, a seasonal increase week-on-week. Rebar consumption was 98.23 tons, a slight week-on-week increase; hot-rolled coil consumption was 281.6 tons, a slight week-on-week decline [41]. - After the Spring Festival, spot trading volume has increased seasonally, but overall it is lower than the same period last year. Attention should be paid to the subsequent recovery [60]. - This week, the billet inventory of 55 billet-rolling mills was 59.7 tons, a significant week-on-week increase, approaching the same period last year. The mainstream warehouse billet inventory was 247.57 tons, a significant week-on-week increase, reaching a record high [76]. 3.2 Valuation - Rebar warehouse receipts increased slightly but are still significantly lower than the same period last year. Hot-rolled coil warehouse receipts increased significantly week-on-week, reaching a high level for the same period in history [109]. 3.3 Balance Sheet - The report provides a monthly balance sheet for crude steel from July 2025 to July 2026, including data such as initial steel mill and social inventory, pig iron and crude steel production, imports and exports, total consumption, production-demand balance, ending steel mill and social inventory, surplus, year-on-year production and consumption growth, and cumulative year-on-year production and consumption growth [110].

Core Viewpoint - The steel market is experiencing a decline in prices due to weak demand and increased inventory levels, with significant variations in the performance of different steel products [1][2][6]. Supply - Iron element production increased by 18 million tons year-on-year, a growth rate of 3.1%. In August, production rebounded compared to July, primarily due to a notable increase in scrap steel consumption [3]. - The production of five major steel products rose by 64,000 tons to 8.78 million tons, with rebar production decreasing by 58,000 tons to 2.15 million tons, while hot-rolled coil production increased by 96,000 tons to 3.25 million tons [3]. Demand - From January to July, the apparent demand for the five major steel products remained flat year-on-year, with a slight decrease of 0.2%, while production fell by 1.3% [4]. - Domestic demand decreased year-on-year, but external demand increased significantly, leading to an overall increase in steel demand despite a seasonal decline [4]. Inventory - There has been a significant accumulation of inventory, primarily among traders, with the total inventory of the five major steel products increasing by 250,000 tons to 14.41 million tons [5]. - Rebar inventory rose by 200,000 tons to 6.07 million tons, indicating a mismatch between supply and demand [5]. Price Trends - The steel market sentiment has weakened, leading to a decline in steel prices, with rebar prices falling more than hot-rolled coil prices due to a noticeable drop in demand for rebar [6]. - The price difference between rebar and hot-rolled coil has narrowed, indicating a shift in market dynamics [6].