Report Industry Investment Rating - The mid - term outlook for the black building materials industry is "Oscillation" [5] Core Viewpoints - The current supply - demand weakness in the black building materials industry aligns with off - season characteristics. It is difficult to support the prices of sector varieties, but the downward pressure is also not significant. Without macro and policy disturbances in the short term, prices are expected to remain oscillating. If there are still positive macro and policy releases later, phased upward opportunities can be observed [1][5] Summary by Category Iron Element - Iron ore: The resumption of hot metal production this week was below expectations, mainly due to insufficient sinter supply in some Tangshan steel mills. Considering seasonal blast furnace maintenance, the increase in hot metal production is limited. Iron ore inventory is expected to show a slight increase, and the fundamentals lack upward price support. Given the existing macro and policy disturbances, short - term prices are expected to oscillate. For scrap steel, supply increases while demand decreases, with no prominent short - term fundamental contradictions. Scrap steel prices are expected to follow the trend of finished products [1] Carbon Element - Coke: After three rounds of price hikes, steel mills are resistant to further increases due to profit pressure. However, coke has strong cost support and there is still procurement demand from steel mills, so the coke - steel game will continue, and coke prices are expected to oscillate. - Coking coal: Coking coal supply is difficult to improve. With continuous procurement from the middle and lower reaches, coal mine inventories have dropped to recent lows. The short - term fundamentals are healthy, and prices are expected to oscillate [2] Alloys - Manganese silicon: Short - term cost support is strong, but the market has a pessimistic supply - demand outlook, and there is insufficient upward price drive. - Ferrosilicon: Short - term cost trends are strong, but the market supply - demand relationship is loose, and there is insufficient upward price drive [2] Glass and Soda Ash - Glass: The expectation of supply disturbances has resurfaced, and the supply side faces short - term downward risks. With medium and high downstream inventories, if sales remain weak, prices will return to an oscillating and weak trend. In the long - term, market - oriented capacity reduction is needed, and prices may continue to decline oscillating. - Soda ash: Recently, downstream buyers have started restocking as they think the price is appropriate. The cost of soda ash plants has increased, leading to a slight price increase. In the short - term, prices are expected to oscillate. In the long - term, the oversupply situation will intensify, and the price center will continue to decline to promote capacity reduction [2] Specific Varieties - Steel: Spot market transactions are average, and sentiment has improved. Steel mill profits have shrunk again, and production has decreased significantly. In the off - season, demand has declined from its peak, and inventory levels are still higher than the same period last year. The futures market is under pressure, and attention should be paid to macro - policy and supply - side disturbances [7] - Iron ore: The supply - demand situation has weakened marginally, and inventory has increased significantly. Overseas mine shipments are relatively stable, but the arrival volume has fluctuated greatly recently. The recovery of hot metal is restricted by factors such as sinter supply and blast furnace maintenance. Short - term prices are expected to oscillate [7][8] - Scrap steel: Supply has increased while demand has decreased. The short - term fundamental contradictions are not prominent, and prices are expected to follow finished products [9] - Coke: Supply has contracted again, and inventory has been continuously reduced. After three rounds of price hikes, there is a game between coke and steel, and prices are expected to oscillate [11] - Coking coal: Supply remains at a low level, and downstream procurement is good. Mine inventories have dropped to recent lows, and prices are expected to oscillate [12] - Glass: Supply disturbances are expected to intensify, and the supply side faces short - term downward risks. With medium and high downstream inventories, if sales are weak, prices will return to an oscillating and weak trend. In the long - term, prices may decline oscillating [13] - Soda ash: Downstream restocking has started, and the cost of soda ash plants has increased. In the short - term, prices are expected to oscillate. In the long - term, the oversupply situation will intensify, and the price center will decline [15] - Manganese silicon: Cost support is strengthening, but the market supply - demand outlook is pessimistic, and the upward price space is limited [16] - Ferrosilicon: Cost trends are strong, but the market supply - demand relationship is loose, and there is insufficient upward price drive [17]

Report Industry Investment Rating - The mid - term outlook for the industry is "oscillation" [5] Core Viewpoints - The overall impact of Sino - US trade frictions on the black sector has weakened. As the off - season approaches, the demand for building materials remains weak, but the inventory has no pressure due to the decline in production. The industrial materials demand shows signs of weakening from June to July, allowing for a decline in hot metal production, and the negative feedback path is difficult to disprove. Currently, the weakening demand and the accumulation of iron ore at ports suppress the upside, and prices are oscillating near support levels waiting for new drivers [1][2] Summary by Category Iron Element - Overseas mines are ramping up shipments at the end of the fiscal year and quarter, with expected seasonal increases in shipments until early July. The profitability rate of steel enterprises and hot metal production have slightly decreased but are expected to remain high in the short term. There is an expectation of a small - scale and phased accumulation of ore inventory, but the overall supply - demand contradiction is not prominent. The short - term fundamentals are healthy, and significant price drops are unlikely, so the ore price is expected to oscillate [2] Carbon Element - Recently, the number of coal mines shut down due to factors such as changing working faces, inventory pressure, and safety has increased, leading to a slight decline in coking coal production. However, the overall market supply is still abundant. On the demand side, the coke production level is loosening at a high level, and coke production tends to decline due to increasing inventory pressure on coke enterprises and shrinking coking profits. In terms of inventory, coke enterprises are not enthusiastic about replenishing raw materials during the price cut period, and the upstream inventory of coking coal remains at a high level in recent years. Overall, the supply contraction is limited, the downstream rigid demand is expected to decline in the off - season, and the upstream de - stocking pressure of coking coal remains high. In the short term, coking coal prices may continue to be weak [3] Alloy - In the alloy sector, the cost of production has been slightly repaired during the wet season in Yunnan and due to electricity price discounts in Guangxi, leading to a slight increase in supply in Ningxia, Inner Mongolia, and Yunnan. The supply of non - standard warehouse goods is tight, and manufacturers are reluctant to sell at low prices. On the demand side, as the off - season for the black market arrives, the market sentiment is still cautious, and downstream buyers have a strong intention to bargain. The steel procurement by Hebei Iron and Steel Group for ferrosilicon - manganese in June was 11,700 tons, an increase of 100 tons compared to May. The supply - demand of ferrosilicon - manganese is becoming more balanced, and there is an expectation of a decline in manganese ore prices. However, due to cost inversion, manufacturers are less willing to sell. In the short term, the futures market is expected to be under pressure and oscillate. The supply of ferrosilicon has slightly increased, and as the downstream steel consumption enters the off - season, the downstream has a strong intention to reduce inventory. The market sentiment remains cautious, and costs may still be a drag. The future focus is on steel procurement and production [3] Glass and Soda Ash - For glass, the demand is declining in the off - season, and the deep - processing demand is still weak year - on - year. The supply pressure remains as there are still 6 production lines waiting to produce glass. The upstream inventory has significantly increased, while the mid - stream inventory has decreased. There are rumors affecting the supply side, but the actual impact is limited. The coal price is also expected to decline, and the sentiment fluctuates. The futures price is at a discount to the spot price, but the price cut of Hubei spot has led to a decline in the futures market. In the short term, a weak - oscillation view is maintained. For soda ash, the oversupply situation remains unchanged, and after the maintenance period ends, it is expected to oscillate weakly in the short term, and the price center will decline in the long term [5] Specific Products - **Steel**: The static fundamentals are good, but the demand expectation is weak. The domestic policy is in a vacuum period, and the macro - fluctuations have converged. This week, the demand for the five major steel products has weakened, especially for rebar. The hot metal production has peaked, and steel production has significantly declined. Although both supply and demand have weakened this week, the inventory is still decreasing. The main factors suppressing the futures price are the decline in raw material prices and the pessimistic expectation of domestic demand. It is expected that steel prices will oscillate in the short term [6] - **Iron Ore**: The port trading volume has increased, and the spot market prices have declined slightly. Overseas mines are increasing shipments seasonally, and it is expected to remain high until early July. The profitability rate of steel enterprises and hot metal production have slightly decreased but are expected to remain high in the short term. There is an expectation of a small - scale and phased accumulation of ore inventory, but the overall supply - demand contradiction is not prominent. The short - term fundamentals are healthy, and significant price drops are unlikely, so the ore price is expected to oscillate [2][6] - **Scrap Steel**: As the off - season for building materials deepens, the apparent demand for rebar has declined. The market is pessimistic about the off - season demand, and the futures price of finished products is under pressure. The supply of scrap steel has decreased this week, and the resources are relatively tight, supporting the price. The demand has also decreased as the profit of electric furnaces at off - peak hours is negative, and the hot metal production of blast furnaces has slightly declined. The inventory in steel mills is still decreasing, but the absolute level is at a high level in the same period. It is expected that the scrap steel price will oscillate [6] - **Coke**: After three rounds of price cuts, there is an expectation of further price cuts due to the off - season demand for steel and pessimistic market sentiment. On the supply side, the production of some coke enterprises has slightly declined, but the overall production remains stable, and the de - stocking pressure is still high. On the demand side, the hot metal production is declining, and there is an expectation of further decline. The supply reduction is limited, and the demand support is weakening, so the coke price still has room to decline [6][7] - **Coking Coal**: The market trading atmosphere is poor, and there are still online auction failures. Recently, the number of shut - down coal mines has increased, leading to a slight decline in production, but the overall supply is still abundant. The coke production is loosening at a high level, and the inventory pressure on coke enterprises is increasing, leading to a decline in demand for coking coal. The upstream inventory of coking coal is still at a high level in recent years. In the short term, the coking coal price may continue to be weak due to the high - inventory pressure and weak downstream demand [3][8] - **Glass**: The demand is declining in the off - season, and the deep - processing demand is still weak year - on - year. The supply pressure remains as there are still 6 production lines waiting to produce glass. The upstream inventory has increased slightly, while the mid - stream inventory has decreased. The market sentiment fluctuates, and the futures market is oscillating. In the short term, a weak - oscillation view is maintained, and attention should be paid to the price - cut range of Hubei manufacturers [5][8] - **Soda Ash**: The oversupply situation remains unchanged. After the maintenance period ends, the supply pressure remains. The demand for heavy soda ash is expected to maintain rigid procurement. The sentiment affects the futures market, but the long - term oversupply situation cannot be changed. It is expected to oscillate weakly in the short term, and the price center will decline in the long term [5][9] - **Silicon Manganese**: The cost of production has been slightly repaired in Yunnan and Guangxi. The supply in Ningxia, Inner Mongolia, and Yunnan has slightly increased. The supply of non - standard warehouse goods is tight, and manufacturers are reluctant to sell at low prices. The black market is in the off - season, and the downstream is cautious and has a strong intention to bargain. The steel procurement by Hebei Iron and Steel Group for silicon manganese in June has increased. The supply - demand of silicon manganese is becoming more balanced, and there is an expectation of a decline in manganese ore prices. However, due to cost inversion, manufacturers are less willing to sell. In the short term, the futures market is expected to be under pressure and oscillate [3][11] - **Silicon Iron**: The cost of production in various regions has little fluctuation, and the overall supply level is still low. Manufacturers are reluctant to sell at low prices. The steel procurement has increased, but the downstream construction progress is average due to the college entrance examination and rainy season. The terminal steel consumption is about to enter the off - season, and the downstream has a strong intention to reduce inventory. The procurement sentiment in the magnesium market has recovered, and the price has stabilized and increased. The supply of silicon iron has slightly increased, and the demand is expected to continue to weaken. The supply - demand gap is expected to narrow, and the cost may still be a drag. It is expected that the futures market will oscillate in the short term [12]