1. Report Industry Investment Rating - Investment rating: ★★ [5] 2. Core Viewpoints of the Report - Last week, the Iron Ore 2601 contract rose 3.69%. Recently, the global iron ore shipment volume has increased month - on - month and is at a high level in the same period of the past three years. On the demand side, the environmental protection restrictions in Tangshan have been temporarily lifted, and the national hot metal output may fluctuate slightly next week. On the inventory side, the iron ore inventory in 47 ports continues the trend of inventory accumulation. It is expected that the iron ore price may fluctuate weakly in the near future [4][32]. 3. Summary by Relevant Catalogs 3.1 Market Information - In the first three quarters of this year, China's steel production decreased year - on - year, and the apparent consumption continued to decline. The cumulative national crude steel production in the first three quarters was 7.46 billion tons, a year - on - year decrease of 2.9%. It is expected that the annual production will still decline year - on - year, achieving the crude steel production control target [13]. - The US will suspend the implementation of the 50% penetration rule of export control announced on September 29 for one year. China will suspend the implementation of relevant export control measures announced on October 9 for one year and will study and refine specific plans. The US will suspend the implementation of the 301 investigation measures on China's maritime, logistics, and shipbuilding industries for one year. After the US suspends the implementation of relevant measures, China will also suspend the implementation of counter - measures against the US for one year [13][14]. - A total of 500 billion yuan of new policy - based financial instruments have been fully invested, which is expected to drive the total project investment to exceed 7 trillion yuan [14]. - The "Henan Province Iron and Steel Industry Quality Improvement and Upgrading Action Plan" was issued, aiming to complete the technological transformation or elimination of steel production capacity below the energy efficiency benchmark level in the province by the end of 2025 and basically complete the ultra - low emission transformation of enterprises. By 2027, the industrial layout will be further optimized, and inefficient production capacity will be basically cleared [14]. 3.2 Supply - Side Situation - In September, the import volume of iron ore and concentrates was 11,633,000 tons, an increase of 1,111,000 tons from the previous month; the import average price was $96.95 per ton, an increase of $4.23 per ton from the previous month [18]. - As of September 2025, Australia's iron ore shipment volume was 6,517,100 tons, an increase of 434,200 tons from the previous month; Brazil's iron ore shipment volume was 2,819,800 tons, a decrease of 415,900 tons from the first half of the month [22]. 3.3 Demand - Side Situation - The PMI of the steel industry in October 2025 was 49.2%, a month - on - month increase of 1.5%, ending the continuous two - month month - on - month decline, and the industry operation has recovered [30]. - Last week, the iron ore price continued to rise month - on - month. As of October 31, the 62% Australian powder forward price index was $106.3 per ton, a month - on - month increase of $2.3 per ton, with a growth rate of 2.21%. The iron ore price was in the range of $105 - $107 per ton last week, and the average price in October was $104.8 per ton [30]. 3.4 Fundamental Analysis - The total import iron ore inventory in 47 ports was 15,272,930 tons, a month - on - month increase of 163,440 tons; the daily average port clearance volume was 3,312,200 tons, an increase of 91,500 tons. The total import iron ore inventory in 45 ports was 14,542,480 tons, a month - on - month increase of 118,890 tons; the daily average port clearance volume was 3,201,600 tons, an increase of 75,100 tons; the number of ships at the port was 118, an increase of 11 [31]. - Last week, the blast furnace operating rate of 247 steel mills was 81.75%, a month - on - month decrease of 2.96% and a year - on - year decrease of 0.69%; the blast furnace ironmaking capacity utilization rate was 88.61%, a month - on - month decrease of 1.33% and a year - on - year increase of 0.21%; the steel mill profitability rate was 45.02%, a month - on - month decrease of 2.60% and a year - on - year decrease of 16.02%; the daily average hot metal output was 236,360 tons, a month - on - month decrease of 3,540 tons [31]. 3.5 Operation Strategy - Unilateral: Pay attention to the upper pressure near 850 yuan/ton. - Arbitrage: Long raw materials - short rebar arbitrage strategy. - Options: Wait and see [5][33].

Investment Rating - The report maintains a "Buy" recommendation for several steel companies, including Hualing Steel, Baosteel, Nanjing Steel, and others, indicating a positive outlook for these stocks [3][4]. Core Viewpoints - The introduction of the "Steel Industry Stabilization Growth Work Plan (2025-2026)" aims to address the supply-demand imbalance in the steel industry by implementing precise capacity and production controls, promoting resource allocation to leading enterprises, and achieving dynamic balance in supply and demand [3][7]. - The report highlights that the long-term focus will remain on capacity regulation, which is expected to restore profitability for steel companies, particularly benefiting leading firms from the new regulatory measures [3][7]. Price Trends - As of September 26, 2025, steel prices have decreased, with HRB400 rebar priced at 3,240 CNY/ton, down 40 CNY/ton from the previous week [1][9]. - The report details price changes for various steel products, including hot-rolled and cold-rolled sheets, indicating a general downward trend in prices [1][10]. Production and Inventory - The total production of five major steel products reached 8.65 million tons, an increase of 94,700 tons week-on-week, while total inventory decreased by 121,200 tons to 10.88 million tons [2][3]. - The apparent consumption of rebar was estimated at 2.2044 million tons, reflecting a week-on-week increase of 104,100 tons [2][3]. Profitability Analysis - The report notes a decline in profitability for plate products, with the gross margins for rebar, hot-rolled, and cold-rolled steel changing by +3 CNY/ton, -36 CNY/ton, and -20 CNY/ton respectively [1][3]. - Electric arc furnace steel showed a gross margin increase of 10 CNY/ton week-on-week [1][3]. Investment Recommendations - The report recommends specific companies for investment, including Hualing Steel, Baosteel, Nanjing Steel in the general steel sector, and Xianglou New Materials, CITIC Special Steel in the special steel sector [3][4]. - It also suggests monitoring high-temperature alloy companies like Fushun Special Steel for potential investment opportunities [3].