Core Insights - The report highlights that the ongoing geopolitical conflicts in the Middle East are the primary variable affecting market risk appetite, leading to a decline in global equity markets, a strengthening dollar, and a significant rise in oil prices. The trading logic is focused on defensive demand and rising energy prices, with a need to monitor the duration of oil supply constraints and their potential long-term impact on supply-demand dynamics [2][12][16]. - A combination of rising commodity prices and declining interest rates is seen as favorable for a bull market. Historically, instances of rising commodity prices coinciding with falling stock markets are rare, with only three occurrences since 1968. Overall, both US and A-shares benefit from rising commodity prices, unless inflation pressures lead to significant liquidity tightening [2][4][25]. - The report suggests that the current domestic deflationary pressures reduce concerns about negative inflation impacts, and interest rates are unlikely to rise significantly in the absence of further positive signals in the fundamentals. The combination of rising ROE and declining interest rates creates a conducive environment for the stock market [2][4][25]. Market Changes This Week - This week, major A-share indices experienced declines, with the Shanghai Composite Index down by 0.93%, and the ChiNext Index down by 2.45%. The sectors leading the gains included oil and petrochemicals (+8.06%), while media (-6.97%) and non-ferrous metals (-5.47%) faced significant losses [32][33]. - Global stock markets also saw declines, with the S&P 500 down by 2.02%. In the commodity market, NYMEX crude oil surged by 36.18%, while LME copper fell by 3.61% [33][34]. Policy and Economic Outlook - The report indicates that the policy tone from the Two Sessions is generally stable, with limited expectations for unexpected easing policies in the short term. The economic growth target for 2026 has been adjusted to a range of 4.5%-5%, with other policy targets remaining consistent with 2025 [3][14]. - The report emphasizes that structural support policies aligned with long-term economic quality improvement and transformation are expected to be implemented effectively, particularly in sectors like services, AI commercialization, and new infrastructure [3][13]. Investment Recommendations - The report suggests focusing on sectors such as non-ferrous metals, oil and petrochemicals, and basic chemicals, which are expected to benefit from the current market dynamics. The energy security narrative is likely to strengthen due to ongoing geopolitical tensions, creating opportunities in these sectors [28][31]. - The report also highlights the potential for structural support policies to continue benefiting sectors aligned with long-term economic development logic, such as technology and consumption [27][31].

Investment Rating - The report does not explicitly state an investment rating for the industry [1] Core Insights - The report highlights the valuation comparisons of various indices and sectors within the A-share market, indicating that the overall market is at historical high percentiles for PE and PB ratios [2][5][6] - The report tracks the mid-term economic conditions across several industries, including New Energy, Technology, Real Estate, Consumption, and Cyclical sectors, providing insights into price movements and market trends [3][4] Valuation Comparisons - The overall market PE for the CSI All Share (excluding ST) is 22.6 times, with a PB of 1.9 times, positioned at the 83rd and 51st historical percentiles respectively [2] - The Shanghai Composite Index has a PE of 11.6 times and a PB of 1.3 times, at the 59th and 39th historical percentiles [2] - The CSI 300 Index shows a PE of 14.2 times and a PB of 1.5 times, at the 65th and 40th historical percentiles [2] - The report identifies sectors with high PE valuations above the 85th historical percentile, including Real Estate, Automation Equipment, Retail, Electronics, and IT Services [2] - Sectors with low PE and PB valuations below the 15th historical percentile include Securities, Food and Beverage, Medical Services, and White Goods [2] Industry Mid-term Economic Conditions New Energy - In the photovoltaic sector, upstream polysilicon prices have decreased by 11.6% for futures and 7.7% for spot prices, indicating a bearish demand outlook [3] - Battery materials such as cobalt and nickel have seen price declines of 1.4% and 1.8% respectively, with lithium prices dropping significantly [3] Technology TMT - The semiconductor market experienced a 46.1% year-on-year sales growth in January 2026, with China's growth at 47.0% [3] - Domestic smartphone shipments fell by 16.1% year-on-year, indicating a continued decline in demand [3] Real Estate Chain - The report notes a 0.7% increase in rebar prices, while cement prices have decreased by 1.5% [3] Consumption - The average price of live pigs has dropped by 4.7%, reflecting seasonal demand fluctuations [3] - The wholesale price index for liquor has shown a slight recovery, but major brands like Moutai have seen price declines [3] Cyclical - The report indicates fluctuations in commodity prices, with gold and silver prices down by 2.2% and 10.3% respectively, while aluminum prices have surged due to supply concerns [3]

Report Industry Investment Rating - Not provided Core Viewpoints - Short - term cost support from coking coal and iron ore prices boosts steel prices, but high inventory and high warrants of hot - rolled coils cap price increases. If destocking is below expectations, steel prices may fall. After the Two Sessions, market expectations return to the fundamentals of steel. The short - term upward trend of steel prices is limited, with the price range of rebar's main contract being 3000 - 3200 and that of hot - rolled coils' main contract being 3200 - 3350 [1][2] Summary by Directory Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - Geopolitical conflicts in Iran drive up oil and energy prices, which in turn boost coking coal prices. Market rumors about China's procurement restrictions on BHP's iron ore, downstream post - holiday restocking demand, tight tradable iron ore inventory at ports, and rising sea freight prices support iron ore prices. However, high inventory and high warrants of hot - rolled coils, weakening steel demand, and limited policy stimulus pose challenges to steel prices [1][2] 1.2 Trading Strategy Recommendations - **Trend Judgment**: The steel market is expected to trade within a range. The price of rebar's main contract 2605 may range from 3050 - 3200, and that of hot - rolled coils' main contract 2605 from 3200 - 3350. - **Near - term Trading Logic**: Cost support from iron ore and coking coal, and pressure on the price of hot - rolled coils from high inventory and high warrants. - **Long - term Trading Expectations**: Expectations of steel production cuts and demand support from major projects in the first year of the 15th Five - Year Plan [6] 1.3 Industrial Customer Operation Recommendations - **Price Range Forecast**: The price range of rebar's 05 contract is predicted to be 2900 - 3300, and that of hot - rolled coils' 05 contract 3100 - 3500. - **Risk Management Strategies**: For inventory management, companies with high finished - product inventory can short rebar or hot - rolled coil futures and sell call options. For procurement management, those with low inventory can buy rebar or hot - rolled coil futures and sell put options [8] 1.4 Data Overview - **Spot Prices**: Rebar and hot - rolled coil prices in most regions showed a slight decline or remained stable. - **Base Difference**: The base differences of rebar and hot - rolled coils generally decreased. - **Overseas Data**: The FOB export prices and CFR import prices of hot - rolled coils in some countries and regions changed slightly [9][10] Chapter 2: Important Information and Next - Week Concerns 2.1 Important Information - Not detailed in the provided content 2.2 Next - Week Important Event Concerns - China will announce February CPI on Monday, February M2 supply on Tuesday. The US will announce the end - of - February unadjusted CPI on Wednesday and the weekly initial jobless claims on Thursday [16][17] Chapter 3: Disk Interpretation 3.1 Price - Volume and Capital Interpretation - **Base Difference**: Cost support from iron ore and coking coal, but factors such as weakening blast furnace profits, high inventory, and weakening export orders suppress steel prices. - **Coil - Rebar Spread**, **Term Structure**, **Month - Spread Structure**: Various data charts are provided to show the historical trends of these indicators [16][18][27] Chapter 4: Valuation and Profit Analysis 4.1 Industry Chain Upstream and Downstream Profit Tracking - The report presents the profit trends of different steel products, including long - process rebar, hot - rolled coils, and cold - rolled coils, as well as the relationships between steel profits and production volumes [35][36][39] 4.2 Export Profit Tracking - It shows the seasonal trends of hot - rolled coil export profits and their relationships with export volumes, orders, and price differences between domestic and overseas markets [53][58][68] Chapter 5: Supply - Demand and Inventory Deduction 5.1 Supply - Demand Balance Sheet Deduction - The cumulative consumption and production of five major steel products from January to March 6, 2026, are provided, along with their year - on - year growth rates. The current inventory levels of each product are also given [75] 5.2 Supply - Side and Deduction - The supply is affected by factors such as blast furnace and electric furnace production, steel enterprise profitability, and maintenance influence [80][83][92] 5.3 Demand - Side and Deduction - The report provides the consumption prediction trends of different steel products, including crude steel, five major steel products, rebar, and hot - rolled coils [94][96][98]

Investment Rating - The report maintains a positive outlook on the metals and new materials industry, indicating a "Buy" rating for the sector [1]. Core Insights - The report highlights the impact of geopolitical tensions in the Middle East on metal prices, which have shown a mixed performance. Precious metals are expected to experience price fluctuations, while industrial metals are projected to see a gradual price increase due to stable supply-demand dynamics [2][3]. Weekly Market Review - The Shanghai Composite Index fell by 0.93%, while the Shenzhen Component Index decreased by 2.22%. The non-ferrous metals index dropped by 5.47%, underperforming the CSI 300 Index by 4.40 percentage points [3]. - Year-to-date, the non-ferrous metals index has risen by 18.37%, outperforming the CSI 300 Index by 17.71 percentage points [3]. Price Changes - Industrial and precious metals prices have varied, with LME copper down by 3.61%, aluminum up by 9.75%, and lithium prices down by 10.40% for battery-grade carbonate [2][14]. - The report notes significant price changes in various metals, including a 13.27% drop in tin and a 10.27% decrease in silver prices [14]. Precious Metals - The report discusses the U.S. labor market, noting a decrease in non-farm payrolls and an increase in unemployment rates, which may influence precious metal prices. The expectation is for gold prices to trend upwards in the long term due to low central bank reserves in China and ongoing geopolitical tensions [2][22]. - The gold-silver ratio is currently at 62.3, indicating potential for silver demand recovery [23]. Industrial Metals - Copper supply is expected to remain tight, with domestic social inventory increasing to 577,000 tons. The report suggests monitoring companies like Zijin Mining and Luoyang Molybdenum for investment opportunities [31]. - Aluminum production is projected to continue its upward trend, with downstream processing rates increasing to 59.50%. The report recommends companies with integrated operations such as Tianshan Aluminum and Nanshan Aluminum [47][48]. Steel Industry - The steel production has seen a week-on-week increase, with a focus on monitoring supply-side adjustments and seasonal demand. Companies like Baosteel and Nanjing Steel are highlighted for their stable dividend attributes [21]. Small Metals - The report notes tight supply conditions for cobalt and lithium, with companies like Huayou Cobalt and Ganfeng Lithium recommended for investment [18][19]. Growth Cycle Investment Analysis - The report suggests that after interest rate cuts, valuation levels may rise, recommending stable supply-demand dynamics in the new energy manufacturing sector, with companies like Huafeng Aluminum and Baowu Magnesium as potential investment targets [2].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights the valuation comparisons of various indices and sectors within the A-share market, indicating that the overall market is at historically high valuation percentiles, particularly in the real estate, automation equipment, and electronics sectors [2][5][6] - The report tracks the mid-term economic conditions across several industries, noting significant price fluctuations in raw materials and end products, particularly in the new energy and technology sectors [3][4][8] Valuation Summary A-share Valuation (as of March 6, 2026) - The overall market PE is 22.6x, with a PB of 1.9x, placing it at the 83rd and 51st historical percentiles respectively [2][5] - Specific indices such as the Shanghai Composite and CSI 500 show varying PE and PB ratios, with the CSI 500 at 37.5x PE and 2.6x PB, indicating a high valuation relative to historical data [2][5] Industry Valuation Comparisons - Industries with PE valuations above the 85th percentile include real estate, automation equipment, retail, electronics, and IT services [2][8] - Industries with PB valuations above the 85th percentile include electronics (semiconductors) and communications [2][8] - Sectors such as securities, food and beverage, medical services, and white goods are noted to have both PE and PB valuations below the 15th percentile, indicating potential undervaluation [2][8] Mid-term Economic Conditions Tracking New Energy - In the photovoltaic sector, upstream prices for polysilicon have decreased significantly, leading to a downward pressure on prices due to weak demand [3] - Battery material prices, including cobalt and lithium, have also seen declines, reflecting a cautious outlook on future demand [3] Technology (TMT) - The semiconductor market has shown robust growth, with a 46.1% year-on-year increase in global sales, particularly in China [3] - However, consumer electronics, particularly smartphones, are experiencing a decline in shipments, with forecasts adjusted downward [3] Real Estate Chain - Steel prices have seen slight increases, while cement prices have decreased, indicating mixed signals in the construction materials sector [3] - The glass industry is facing high inventory levels, leading to stable prices despite ongoing losses [3] Consumer Sector - Pork prices have dropped significantly due to seasonal demand fluctuations, while liquor prices have shown slight recovery [3] - Agricultural products like corn and wheat have seen price increases, reflecting varying demand dynamics [3] Cyclical Industries - Commodity prices are fluctuating, with precious metals experiencing declines while industrial metals like aluminum have seen price increases due to supply concerns [3] - Oil prices have surged, reflecting geopolitical tensions and supply chain disruptions [3]

Investment Rating - The report maintains a "Buy" rating for the steel industry, recommending several key companies [2][3]. Core Insights - The report emphasizes the urgency of carbon reduction goals, with the government targeting a 3.8% reduction in carbon intensity per unit of GDP. This highlights the steel industry's significant role as the second-largest carbon emitter after electricity [7]. - International tensions are driving up raw material prices, with costs remaining relatively firm due to rising oil and coal prices. The supply-demand recovery in the steel sector is slow, but the long-term carbon reduction requirements are expected to constrain supply, potentially leading to a recovery in steel company profits [7]. - The report identifies leading companies in various segments: 1. General steel leaders: Hualing Steel, Baosteel, Nanjing Steel 2. Special steel segment: Xianglou New Materials, CITIC Special Steel, Fangda Special Steel 3. Pipe materials: Jiuli Special Materials, Youfa Group, Changbao Co. 4. Raw materials: Dazhong Mining (iron ore + lithium ore), Fangda Carbon [7]. Summary by Sections Domestic Steel Market - As of March 6, 2026, steel prices in Shanghai showed fluctuations, with rebar (20mm HRB400) priced at 3170 CNY/ton, down 30 CNY/ton from the previous week. Hot-rolled and cold-rolled prices also experienced minor changes [14][15]. Profit Situation - The report indicates a decline in steel profits, with average weekly gross margins for rebar, hot-rolled, and cold-rolled steel decreasing by 31 CNY/ton, 11 CNY/ton, and 21 CNY/ton respectively compared to the previous week [7]. Production and Inventory - As of March 6, 2026, the total production of five major steel varieties reached 7.97 million tons, with a slight increase of 0.47 million tons week-on-week. Total inventory also rose by 1.07 million tons to 14.01 million tons [7]. Raw Material Market - The report notes that domestic iron ore prices are fluctuating, while imported ore prices are stable to slightly increasing. As of March 6, 2026, domestic iron ore prices varied, with Anshan iron concentrate at 750 CNY/ton and imported Brazilian powder at 888 CNY/ton [30].

Economic Policy and Growth Targets - The GDP growth target for 2026 is set in the range of 4.5%-5%[1] - The government emphasizes a more proactive fiscal policy and moderately loose monetary policy to support economic stability and growth[1] Domestic Demand and Consumption - Domestic cinema box office revenue averaged 21.32 million yuan per day, a 72.2% increase year-on-year[3] - The average number of domestic flights increased by 15.5% compared to March of the previous year, averaging 14,200 flights[3] External Demand and Geopolitical Risks - The Baltic Dry Index (BDI) averaged 2162.0, a 5.6% increase month-on-month and a 40.9% increase year-on-year[3] - Oil prices surged due to geopolitical tensions, impacting external demand and supply chain expectations[1] Production and Industrial Performance - The steel industry saw a decrease in operating rates, with blast furnace utilization dropping by 2.55 percentage points to 77.69%[3] - Chemical production remained strong, supported by high oil prices, with PTA production increasing by 106,300 tons[3] Price Trends - The Consumer Price Index (CPI) showed a week-on-week decline in pork prices by 3.92% and vegetable prices by 4.07%[4] - The Producer Price Index (PPI) was affected by rising oil prices, with WTI crude oil increasing by 19.0% and Brent crude by 17.5%[5] Fiscal Policy and Government Spending - The government issued 149 billion yuan in general bonds and 781.7 billion yuan in new special bonds this week[6] - Total public budget expenditure reached a record high of 30 trillion yuan for 2026[6] Monetary Policy and Liquidity - The People's Bank of China announced an 800 billion yuan reverse repurchase operation, maintaining liquidity in the market[7] - The 10-year government bond yield stabilized around 1.8%[7] International Economic Conditions - The U.S. non-farm payrolls for February showed a decrease of 92,000 jobs, significantly below market expectations[7] - The Eurozone faces rising inflation risks alongside economic slowdown due to geopolitical tensions[7] Risk Factors - Risks include potential underperformance of policy implementation and slower-than-expected recovery in consumer confidence[7]

Investment Rating - The investment rating for the steel industry is "Positive" [2] Core Insights - The report highlights that the steel sector is experiencing a supply-demand optimization driven by policies addressing "involution" competition, which is expected to improve the long-standing issues of homogenized competition and excess capacity in the industry [3] - Current inventory pressures for the five major steel products are relatively limited, with overall inventory at historically low levels and the accumulation rate slower than in previous years [3] - The report suggests that the profitability of steel companies is expected to improve, particularly for those with advanced equipment and environmental standards, as the industry undergoes a "de-involution" phase [3] Supply Situation - As of March 6, the capacity utilization rate for blast furnaces among sample steel companies is 85.3%, a decrease of 2.13 percentage points week-on-week [23] - The average daily pig iron production is 2.2759 million tons, down 5.69 thousand tons week-on-week [23] - The total production of the five major steel products is 6.995 million tons, an increase of 1.15 thousand tons week-on-week [23] Demand Situation - The consumption of the five major steel products reached 6.914 million tons as of March 6, an increase of 126.70 thousand tons week-on-week, representing a 22.44% increase [33] - The transaction volume of construction steel by mainstream traders is 57 thousand tons, up 2.17 thousand tons week-on-week, a 62.12% increase [33] Inventory Situation - The social inventory of the five major steel products is 14.031 million tons, an increase of 107.38 thousand tons week-on-week, or 8.29% [41] - The factory inventory of the five major steel products is 5.489 million tons, a decrease of 1.49 thousand tons week-on-week, or 0.27% [41] Steel Prices & Profits - The comprehensive index for ordinary steel is 3,403.9 yuan/ton, a decrease of 2.06 yuan/ton week-on-week [47] - The profit for rebar produced in blast furnaces is 72 yuan/ton, down 11.0 yuan/ton week-on-week [55] - The profit for construction steel produced in electric furnaces is -80 yuan/ton, down 17.0 yuan/ton week-on-week [55] Raw Material Situation - The spot price index for Australian iron ore (62% Fe) at Rizhao Port is 767 yuan/ton, up 17.0 yuan/ton week-on-week [71] - The price of primary metallurgical coke is 1,715 yuan/ton, down 55.0 yuan/ton week-on-week [71] Investment Recommendations - The report recommends focusing on regional leading companies with advanced equipment and environmental standards, such as Hualing Steel, Shougang, and Shandong Steel [3] - It also suggests paying attention to companies with excellent growth potential and those benefiting from the new energy cycle, such as CITIC Special Steel and Jiuli Special Materials [3]

Investment Rating - The industry investment rating is "Positive" [1] Core Viewpoints - The report emphasizes the expectation of stable growth driven by the Two Sessions, with a focus on "anti-involution" measures [1] Price Performance - The SW Steel Index is at 3,023, with a weekly change of -3.5% and a year-to-date change of 13.6% [3] - The price of rebar (HRB400 20mm) is 3,170 CNY/ton, with a year-to-date change of -4.5% [3] - The iron ore price index is at 101 USD/ton, reflecting a year-to-date decrease of 6.6% [3] Inventory - Total social inventory of five major steel products is 1,402,000 tons, with a weekly increase of 8.3% and a year-to-date increase of 60.8% [5] - Steel mill inventory stands at 549,000 tons, with a weekly increase of 31.9% and a year-to-date increase of 42.4% [5] - Port inventory of iron ore is 17,123,000 tons, with a weekly increase of 0.2% and a year-to-date increase of 7.9% [5] Supply and Demand - The weekly output of five major steel products is projected to be around 1,000,000 tons [9] - Daily average molten iron production is expected to reach approximately 240,000 tons [9] - The report indicates a steady demand for rebar, with a focus on maintaining production efficiency [15]

Investment Rating - The report does not explicitly state an investment rating for the steel industry, but it implies a stable outlook based on current conditions and trends observed in the market [11][12]. Core Insights - The steel industry is experiencing a stabilization at the bottom of its fundamental performance, with an average profit level of 16.5 yuan per ton and a current loss of 21.4 yuan per ton. The profit rate for steel companies is reported at 38.9% [11][12]. - Iron ore prices have rebounded due to high port inventories and geopolitical events, despite the completion of spring restocking by steel mills. The report notes that iron ore port inventories remain high at 178 million tons [4][11]. - The demand for hot-rolled coils is currently weak, with prices slightly decreasing and social inventories increasing. However, a potential recovery in demand is expected as downstream operations resume [12][13]. Summary by Sections 1. Steel Industry Overview & Index Performance - The steel mills' iron ore inventory has returned to baseline levels, while steel inventory has risen to levels close to those seen after the spring restocking in 2025. The strength of this year's spring restocking is weaker compared to 2025 [11]. - The average profit level in the industry has decreased, indicating a challenging environment for steel producers [11]. 2. Sub-Industry Fundamentals - Hot-rolled coil prices have seen a slight decline, with the average price for 3.0mm hot-rolled coils at 3320 yuan per ton, down 4 yuan from the previous week. Social inventory for hot-rolled coils has increased significantly [12]. - The metallurgical coke prices have remained stable, with trade prices for first-grade coke at 1570 yuan per ton. However, the overall supply remains high, leading to pressure on prices [13]. 3. Black Industry Chain Price Data Update - The report indicates fluctuations in iron ore prices, with the price index for 66% iron concentrate at 955 yuan per ton, reflecting a slight increase. The overall market sentiment is influenced by geopolitical factors and supply chain dynamics [4][13]. 4. Black Industry Chain Supply and Demand Data Update - Steel production and inventory levels are being monitored closely, with expectations of a slight increase in hot-rolled coil prices due to low inventory levels in downstream markets and seasonal supply constraints [12][13]. - Iron ore shipments and port inventories are being tracked, with a noted high level of 178 million tons at ports, indicating a potential for price adjustments in the future [4][11].