Supply - Iron element production has declined for three consecutive weeks, while finished product output is recovering. Daily iron water production decreased by 16,900 tons to 2.42 million tons; scrap steel consumption decreased by 1,500 tons to 530,000 tons. The output of the five major materials increased by 84,000 tons to 8.81 million tons; rebar production decreased by 60,000 tons to 2.25 million tons; hot-rolled coil production increased by 139,000 tons to 3.20 million tons. Off-balance sheet material production decreased month-on-month [2] Demand - From January to May, the apparent demand for the five major materials remained basically flat year-on-year (-0.8%), while production also remained stable (-0.9%). The increase in iron element production is more directed towards non-major materials and steel billets. Domestic demand decreased year-on-year, while external demand increased, leading to a slight overall increase in steel demand [3] Inventory - Steel inventory continues to show a trend of destocking, although the pace of destocking has slowed recently, with cold-rolled steel maintaining an accumulation trend. The five major materials decreased by 320,000 tons to 13.656 million tons; rebar decreased by 230,000 tons to 5.81 million tons; hot-rolled coil decreased by 74,000 tons to 3.328 million tons. Cold-rolled steel continues to accumulate [4] Cost and Profit - On the cost side, coking coal continues to accumulate, with prices declining. Given that coking coal supply is unlikely to contract, the cost support for carbon elements is weak. Iron ore maintains a destocking trend, with current shipments recovering, coupled with a decline in iron water and expectations of decreased demand, which suppresses iron ore prices. Overall cost support is weak. Under expectations of weakened demand, steel prices have fallen, currently below electric furnace cost, with the next step being a potential drop below blast furnace costs [5] Viewpoint - Recently, coking coal has driven a noticeable rebound in black metals, primarily due to short sellers exiting the market, leading to a decline in open interest. Currently, there are no favorable narratives for the industry to bet on. Data from Steel Home indicates a decline in production, a decrease in apparent demand, and a slowdown in destocking. Increased maintenance of blast furnaces is expected to lead to a slight decline in iron water. In the context of declining iron water and apparent demand, the negative feedback logic for finished products continues. However, with low steel inventory in June and a modest decline in demand, the expected decline in iron water is not significant, making it difficult to form deep negative feedback [6]