1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - The overall steel products are supported by raw material costs, with profits gradually improving. The market may pre - trade policy expectations, and steel prices are expected to be oscillating and strengthening. The operating range of rebar may be between 3000 - 3300, and that of hot - rolled coils may be between 3200 - 3500 [2][9]. - The supply - demand balance of steel products is marginally improving, but the risk of negative feedback is increasing as the profitability rate of steel enterprises has fallen to 35.06% [2]. - The port inventory of iron ore has resumed its accumulation trend, and its high valuation limits the upside space [2]. 3. Summary According to Relevant Catalogs 3.1 Core Contradictions and Strategy Recommendations 3.1.1 Core Contradictions - **Market sentiment**: Overseas macro - sentiment has warmed up, and the probability of interest rate cuts has increased. Domestically, the market anticipates targeted policies in stabilizing the real estate and fiscal areas in December, boosting the bullish sentiment in the steel market [1]. - **Supply - demand situation**: The production of the five major steel products increased slightly week - on - week, while consumption decreased slightly. The inventory is slowly being depleted, and the supply - demand balance is marginally improving. However, hot - rolled coils are in a situation of high inventory and high production, and destocking may rely on production cuts. Plate exports remain high, but domestic demand is weakening [2]. - **Profitability and cost**: The profits of blast furnaces and electric furnaces are marginally improving, but the profitability rate of steel enterprises has continued to decline. The price of iron ore has been strong recently, but with the increase in arrivals, the port inventory has resumed its accumulation trend, and its valuation is relatively high [2]. 3.1.2 Trading - Type Strategy Recommendations - **Trend judgment**: Oscillating and strengthening. - **Range reference**: The operating range of rebar is expected to be between 3000 - 3300, and that of hot - rolled coils is between 3200 - 3500. - **Spread strategies**: The long - spread strategy for steel products has a high profit - loss ratio, and the strategy of narrowing the spread between hot - rolled coils and rebar is recommended [9][11]. 3.1.3 Industrial Customer Operation Recommendations - **Price range forecast**: The 01 - contract monthly price range for rebar is 2900 - 3300, with a current volatility of 9.95% and a volatility percentile of 9.1%. For hot - rolled coils, the range is 3100 - 3500, with a current volatility of 7.90% and a volatility percentile of 0.70% [12]. - **Risk management strategies**: Enterprises with high finished - product inventories can short rebar or hot - rolled coil futures to lock in profits. Those with low procurement inventories can buy futures to lock in procurement costs. Additionally, selling call options or put options can be used to reduce costs [12]. 3.2 Important Information and Next - Week Concerns 3.2.1 Important Information - **Positive factors**: The price of iron ore is relatively strong, the supply - demand balance of steel products is marginally improving, the price of coking coal has declined, and the profits of blast furnaces and electric furnaces are gradually improving [19]. - **Negative factors**: The basis of hot - rolled coils is gradually weakening, the steel market is under - performing during the peak season, the profitability rate of steel enterprises has declined significantly, the port inventory of iron ore may resume its accumulation trend, and the hot - rolled coil segment is in a situation of high inventory and high production [20]. 3.2.2 Next - Week Important Events to Monitor - Next Monday: Release of the final November ISM manufacturing PMI and November S&P Global manufacturing PMI in the United States. - Next Wednesday: Release of the November ADP employment figures in the United States [22]. 3.3 Disk Interpretation - **Basis**: The basis of rebar and hot - rolled coils shows certain seasonal characteristics. - **Coil - rebar spread**: The spot coil - rebar spread continues to narrow, and the driving force for the futures coil - rebar spread to widen is weakening, with a possible narrowing trend [27]. - **Term structure**: The term structure of rebar remains in a deep Contango (C) structure, while the near - end term structure of hot - rolled coils may revert from the C structure to the previous B structure [33]. - **Monthly spread structure**: The supply - demand balance of steel products is marginally improving, and the long - spread strategy has a high profit - loss ratio [11]. 3.4 Valuation and Profit Analysis 3.4.1 Upstream and Downstream Profit Tracking in the Industry Chain - The profitability rate of steel mills has declined significantly, falling below 40%, but the profits of blast furnaces and electric furnaces are marginally improving, which may weaken the motivation for the five major steel products to cut production [46]. - The profit ratios of different steel products, such as the ratio of rebar to iron ore and the ratio of rebar to coke, show certain seasonal characteristics [54]. 3.4.2 Export Profit Tracking - The export profit of hot - rolled coils shows seasonal fluctuations and is related to export volume. The difference between overseas and Chinese hot - rolled coil prices also affects export orders [64]. 3.5 Supply - Demand and Inventory Deduction 3.5.1 Supply - Demand Balance Sheet Deduction - The production and consumption of the five major steel products have changed week - on - week. Rebar production decreased by 1.88, hot - rolled coil production increased by 3, and the inventory of various steel products has also changed accordingly [90]. 3.5.2 Supply - Side and Deduction - The estimated amount of molten iron and scrap steel shows seasonal characteristics, and the profitability rate of steel enterprises is related to the daily output of molten iron [98]. - The production of rebar and hot - rolled coils is affected by factors such as maintenance and profit, and the planned production of rebar and hot - rolled coils also shows certain trends [101]. 3.5.3 Demand - Side and Deduction - The consumption of different steel products, such as rebar, hot - rolled coils, and cold - rolled coils, shows seasonal characteristics, and the inventory - to - sales ratios of various steel products also vary [113].