Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Steel: Although adverse weather conditions such as high temperatures and heavy rainfall in many areas still occur frequently, the real - time terminal demand for steel may remain under pressure, and the inventory accumulation pressure of coils and rebar may continue. However, after the "severe flood period from late July to early August", with the start of large - scale "two major" projects like the Yajiang Hydropower Plant and the continuous implementation of "two new" policies, the terminal demand for steel may remain resilient, and steel futures prices may have downward support [1][41]. - Iron ore: Although the Ministry of Industry and Information Technology will release a new round of steel industry stability - growth work plan, and the China Iron and Steel Association has proposed to strictly implement the deployment of crude steel production control, and there may be production restrictions for steel mills in North China near the September 3rd parade, the demand - side pressure on iron ore may gradually emerge, and there is still a risk of inventory accumulation at iron ore ports. But due to the policy expectation difference in supply - side structural reform and the implementation of demand - side management policies, the replenishment demand of traders and terminal steel mills before the production restrictions in North China in late August may still be released, and the production enthusiasm of steel mills is still relatively high, so the demand for iron ore may remain resilient, and iron ore futures prices may have downward support [2][42]. Summary by Directory 1. Expected Boost but Weak Reality Dominates, Steel and Iron Ore Futures Prices Rise and Then Fall - Last week, the futures prices of steel and iron ore main contracts showed a trend of rising and then falling. The main contracts of hot - rolled coils and iron ore performed slightly stronger, both rising 0.32% week - on - week, while the futures price of the rebar main contract fell 0.78% week - on - week. In the first two trading days of last week, policy expectations led to a strong - side oscillation of steel and iron ore futures prices. However, starting from Wednesday, the prices began to fall. One reason was the expected pressure on China's macro - economic data in July, and the actual data of investment, consumption, industry, and real estate were indeed under pressure. The other reason was the significant decline in the apparent demand for rebar and the continuous inventory accumulation of rebar and hot - rolled coils [4]. 2. Supply - Demand Marginally Loose but Terminal Demand Resilience May Gradually Appear, Steel and Iron Ore Inventory Accumulation Pressure May Be Limited Overall (1) Steel: The Window of Supply - Demand Mismatch in Loose Conditions Remains, but Terminal Demand Resilience May Gradually Appear, and Futures Prices May Have Downward Support - **Terminal Demand**: Last week, the consumption of rebar significantly declined to below the level of the same period last year, while the consumption of hot - rolled coils increased month - on - month and was higher than that of the same period last year. The impact of off - season adverse weather on the consumption of building materials such as rebar was more significant. In July, the year - on - year growth rates of investment, consumption, industry, and real estate indicators all declined. Although the year - on - year decline in new housing starts in the real estate sector continued to narrow slightly and the year - on - year growth rate of automobile sales increased, the year - on - year decline in real estate investment still widened, and the year - on - year growth rates of narrow - sense infrastructure and manufacturing investment also slowed significantly. This week, although the adverse weather still exists, the terminal demand for steel may remain resilient with the start of "two major" projects and the implementation of policies [9]. - **Supply**: Last week, the profitability rate of steel enterprises decreased for the first time after continuous increases, and the profits of rebar blast furnaces, electric furnaces, and hot - rolled coils continued to decline. The capacity utilization rate of steel mill blast furnaces and the output of rebar and hot - rolled coils remained basically stable. This week, the expected "one - size - fits - all" administrative production cuts have decreased, and steel production may still have room for release. However, with the upcoming new round of steel industry stability - growth plan and production control policies, as well as the possible production restrictions in North China near the September 3rd parade and off - season factors, the overall steel supply may be under pressure [18]. - **Inventory**: Last week, the total inventories of rebar and hot - rolled coils continued to accumulate. This week, although the terminal demand for steel shows resilience, the expected reduction of "one - size - fits - all" production cuts and the overall pressure on off - season real - time demand may lead to a continuation of the inventory accumulation pressure for coils and rebar [30]. (2) Iron Ore: Although the Expectation of Steel Mill Production Restrictions and Supply - Side Structural Reform Remains, the Demand Side May Have Resilience, and Futures Prices May Have Downward Support - **Demand**: Last week, the iron ore port clearance volume at 45 ports significantly increased to the highest level in recent years, and the port transactions were active. The daily iron ore consumption of steel mills and the average daily molten iron output increased slightly. This week, although there may be production restrictions for steel mills, the replenishment demand of traders and terminal steel mills before the production restrictions in North China in late August may still be released, and the production enthusiasm of steel mills is still high, so the demand for iron ore may remain resilient [34]. - **Supply**: Last week, the iron ore shipment volume from 19 ports in Australia and Brazil increased by 242,000 tons, and the arrival volume at 45 ports increased by nearly 95,000 tons. This week, the iron ore shipment from overseas mines may transition from the off - season to normal, and new production capacity is expected to be released. The overall supply of iron ore may be relatively loose [35]. - **Inventory**: Last week, the iron ore inventory of steel mills increased significantly, and the port inventory continued to accumulate. This week, there is still a risk of inventory accumulation at iron ore ports, but the replenishment demand of steel mills may limit the degree of inventory accumulation [38]. 3. Supply - Demand Marginally Loose but the Implementation Effect of Demand - Side Management Policies May Gradually Appear, Steel and Iron Ore Futures Prices May Have Downward Support - **Steel Operation Suggestions**: Steel producers and traders with high inventory levels can temporarily slow down the sales rhythm; traders with low inventory levels, downstream, and terminal procurement enterprises can appropriately speed up the procurement rhythm or establish short - term buying hedging positions on the futures market. Investors are advised to adopt a range - trading strategy of high - selling and low - buying, paying attention to profit - taking and stop - loss [41]. - **Iron Ore Operation Suggestions**: Steel mills or traders with low inventory levels can appropriately speed up the procurement rhythm or establish short - term buying hedging positions on the futures market; traders with high inventory levels can temporarily slow down the sales rhythm. Investors are advised to adopt a range - trading strategy of high - selling and low - buying, paying attention to profit - taking and stop - loss [43].