Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The steel market is currently in a game between weak reality and strong expectations, with high hopes for "anti - involution" and strengthened optimistic expectations for macro - policies. The iron ore market is under pressure due to potential iron - water production decline and high port trade - mine inventory, but the short - term price is supported by inventory decline [2][4]. Summary by Relevant Catalogs 1. Threaded Steel and Hot - Rolled Coils - **Market News**: The China Iron and Steel Association called on enterprises to control production and stabilize prices, and some Hebei steel mills are required to reduce production due to the parade. These news boosted the threaded steel price, which increased in volume and reached a new stage high [2]. - **Supply and Demand**: Last week, the production and apparent demand of threaded steel increased, the factory inventory decreased for the second consecutive week, and the social inventory increased for the second consecutive week. The total inventory of the five major varieties increased, and the apparent demand declined. In the summer high - temperature season, demand is expected to weaken further, and inventory is expected to rise [2]. - **Technical Analysis**: After a significant correction, the futures price increased in volume, indicating strong bullish power [2]. - **Operation Suggestion**: Hold long positions lightly. For empty - position investors, buy on dips, conduct short - term trading, and set stop - losses and take - profits in a timely manner [2]. - **Related Data**: The closing prices of the main contracts of threaded steel and hot - rolled coils, as well as their spot prices, all increased. The basis and spreads of various varieties showed different degrees of change. The production, inventory, and trading volume data of steel also had corresponding fluctuations [2]. 2. Iron Ore - **Supply and Demand**: The profitability of steel mills is acceptable, but the iron - water production is expected to decline significantly in the short term. The global iron ore shipment is at a relatively high level and rising seasonally, and the future arrival volume is expected to remain high. The port inventory is slowly decreasing, but the port trade - mine inventory is high [4]. - **Technical Analysis**: After a short - term adjustment, the futures price stabilized and rebounded [4]. - **Operation Suggestion**: Try to go long on dips in the short term and set stop - losses and take - profits in a timely manner [5]. - **Related Data**: The prices of various iron ore varieties, basis, spreads, shipment volume, freight rates, exchange rates, inventory, and production data all showed different degrees of change [5]. 3. Industry News - The fourth round of coke price increase was fully implemented, with different price adjustments in Shandong and Hebei markets [8]. - From July 21st to 27th, 2024, the total iron ore inventory of seven major ports in Australia and Brazil decreased slightly. The inventory of imported iron ore at 47 ports in China decreased compared with last Monday due to a decline in arrival volume [8]. - The China Iron and Steel Association called on enterprises to continue to adhere to the "Three - Fixed and Three - No" principle, control production, and stabilize prices, and promote self - discipline in key steel product markets [9]. - Hainan Development's subsidiary, Haikong Sanxin, recently reduced production by shutting down a 550 - ton kiln and five deep - processing production lines [9].

Core Viewpoint - The Chinese steel industry has experienced a slight decline in crude steel production in the first five months of the year, but profitability has improved significantly due to better supply-demand dynamics and lower raw material costs [1][2]. Group 1: Production and Profitability - From January to May, the national crude steel output was 432 million tons, a year-on-year decrease of 1.7% [1]. - The black metal smelting and rolling industry achieved a total profit of 31.69 billion yuan, surpassing the full-year profit of 29.19 billion yuan in 2024 [1]. - The steel industry's operational stability and improved economic benefits are attributed to enhanced supply-demand conditions [1]. Group 2: Supply-Side Dynamics - Since 2025, the steel industry has increased self-discipline in production control, leading to a decrease in crude steel output and alleviating supply-demand conflicts [1]. - The reduction in inventory pressure has provided support for steel prices and improved the overall operating environment of the industry [1]. - The self-discipline in production has ensured that inventory levels remain low, which has helped maintain a balance in market supply and stabilize steel prices [2]. Group 3: Demand-Side Factors - The "two new" policies have positively impacted steel consumption, with automobile production and sales increasing by over 10% year-on-year, and retail sales of home appliances and audio-visual equipment rising by 30.2% [1]. - Steel exports have also shown significant growth, with cumulative exports reaching 48.469 million tons, a year-on-year increase of 8.5%, providing further support for steel demand [1]. Group 4: Cost Factors - Prices of key raw materials such as iron ore, coking coal, and coke have significantly decreased compared to last year's highs, effectively lowering production costs for steel mills [2]. - The decline in raw material prices has created more room for profitability in steel production [2]. - The industry is advised to continue self-discipline in production and inventory management to avoid excessive competition [2].