Market Overview - The cyclical market is perceived to be strong, but concerns about high valuations exist; however, from a 5-year perspective, the cyclical rally may just be beginning[3] - From 2021 to 2025, the domestic real estate cycle was declining, and the PPI continued to bottom out, leading to a bear market in cyclical industries[6] - The overall cumulative increase of the Wind All A index from September 2021 to September 2025 was 11%, while construction materials fell by 36%, steel by 35%, and basic chemicals by 21%[6] Valuation Insights - The overall valuation of cyclical industries is not expensive, with current valuations around the 50% percentile of the past 20 years; for example, steel is at 1.3x PB (60% percentile) and basic chemicals at 2.6x PB (56% percentile)[8] - In a bull market environment at 4100 points on the Shanghai Composite, it is challenging to find absolutely cheap quality stocks[8] Macro Fundamentals - The performance recovery of cyclical industries is expected as PPI year-on-year growth is anticipated to turn positive, which typically leads to profit growth and ROE recovery[9] - As of January 2026, PPI was still in a negative growth range at -1.4%, with cyclical sector ROE around 8% and profit growth near 0%[9] Institutional Behavior - Institutional investors have just begun to increase their positions in cyclical sectors, with current allocations still low; for instance, as of Q4 2025, the allocation to non-ferrous metals was 8%[12] - The allocation to basic chemicals was 3%, and to construction materials was only 0.7%[12] Supply-Side Dynamics - The supply-side constraints have led to a long-cycle dividend, with capital expenditures in cyclical industries declining over the past five years, resulting in tight supply conditions[14] - For example, capital expenditure to depreciation ratios for coal remained at 1-1.5, while for steel it dropped from 1.2 to 0.8[18] Historical Context - Historical comparisons indicate that the current cyclical rally has not yet ended; previous cyclical rallies lasted around 400-500 trading days, while the current rally has only lasted 164 trading days since July 2025[24] - The last cyclical downturn saw significant increases in commodity prices, with the CRB index showing a maximum increase of over 200% during previous cycles[19]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - For steel, the market is in a state of oscillation, and inventory has not started to decline. It is recommended to wait and see for single - side trading and conduct positive arbitrage after the basis spread falls [2]. - For ferrosilicon and silicomanganese, although the price has rebounded due to supply disturbances and cost support, the fundamentals are weak, and it is recommended to gradually take profits on previous long positions and for industrial customers to hedge at high prices [3][7]. - For coking coal and coke, the geopolitical situation continues to ferment. It is recommended to wait and see for single - side trading and establish positive arbitrage positions on the 05 contract during rebounds [7]. - For iron ore, the geopolitical conflict has intensified, and it is recommended for medium - and long - term investors to enter short positions at resistance levels [7]. 3. Summary by Related Catalogs Futures Market - On March 5th, for far - month contracts, the closing prices of RB2610, HC2610, 12609, J2609, and JM2609 were 3104.00 yuan/ton, 3230.00 yuan/ton, 735.50 yuan/ton, 1745.00 yuan/ton, and 1200.00 yuan/ton respectively, with corresponding changes of 1.00 yuan, - 4.00 yuan, 5.00 yuan, - 8.00 yuan, and - 6.00 yuan, and percentage changes of 0.03%, - 0.12%, 0.68%, - 0.46%, and - 0.50% [1]. - For near - month contracts (main contracts), the closing prices of RB2605, HC2605, 12605, J2605, and JM2605 were 3075.00 yuan/ton, 3209.00 yuan/ton, 759.00 yuan/ton, 1676.50 yuan/ton, and 1105.50 yuan/ton respectively, with corresponding changes of 3.00 yuan, - 6.00 yuan, 9.50 yuan, - 1.00 yuan, and - 4.00 yuan, and percentage changes of 0.10%, - 0.19%, 1.27%, - 0.06%, and - 0.36% [1]. - The cross - month spreads of RB2605 - 2610, HC2605 - 2610, 12605 - 2609, J2605 - 2609, and JM2605 - 2609 on March 5th were - 29.00 yuan/ton, - 21.00 yuan/ton, 23.50 yuan/ton, - 68.50 yuan/ton, and - 94.50 yuan/ton respectively [1]. - The spreads/price ratios/profits on March 5th: the coil - to - rebar spread was 134.00 yuan/ton, the rebar - to - ore ratio was 4.05, the coal - to - coke ratio was 1.52, the rebar on - disk profit was - 73.35 yuan/ton, and the coking on - disk profit was 206.19 yuan/ton [1]. Spot Market - On March 5th, the spot prices of Shanghai rebar, Tianjin rebar, Guangzhou rebar, Tangshan billet, and the Platts Index were 3170.00 yuan/ton, 3110.00 yuan/ton, 3390.00 yuan/ton, 2920.00 yuan/ton, and 101.35 respectively, with changes of 0.00 yuan, 0.00 yuan, 0.00 yuan, 10.00 yuan, and 1.15 respectively [1]. - The spot prices of Shanghai hot - rolled coil, Hangzhou hot - rolled coil, Guangzhou hot - rolled coil, billet - to - product spread, and Rizhao Port: PB on March 5th were 3250.00 yuan/ton, 3230.00 yuan/ton, 3220.00 yuan/ton, 250.00 yuan/ton, and 767.00 yuan/ton respectively, with changes of 40.00 yuan, 0.00 yuan, 0.00 yuan, - 10.00 yuan, and 17.00 yuan respectively [1]. - The spot prices of Gaolü Port: Super Special Powder, Anruoguo: Tiliuquan, Ganqimao Coal Refined Coking Coal, Qingdao Port: Quasi - first - grade Coke (ex - warehouse), and Qingdao Port: PB on March 5th were 647.00 yuan/ton, 704.00 yuan/ton, 1180.00 yuan/ton, - 1480.00 yuan/ton, and 769.00 yuan/ton respectively, with changes of 7.00 yuan, 7.00 yuan, 0.00 yuan, 0.00 yuan, and 19.00 yuan respectively [1]. - The basis spreads of HC main contract, RB main contract, main contract, J main contract, and JM main contract on March 5th were 41.00 yuan/ton, 95.00 yuan/ton, 30.00 yuan/ton, - 50.10 yuan/ton, and 104.50 yuan/ton respectively [1]. Specific Product Analysis - **Steel**: The steel inventory is in the seasonal accumulation cycle, with only medium - thick plates showing a slight decline in inventory. The spot rigid demand starts slowly, and the price driving force is unclear. The steel mill has profit and the intention to resume production, but the actual resumption rhythm may be slow. It is recommended to wait and see for single - side trading and conduct positive arbitrage after the basis spread falls [2]. - **Ferrosilicon and Silicomanganese**: After the Spring Festival, the price has rebounded due to supply disturbances and cost support. However, the fundamentals are weak, with high inventory and strong resistance to price increases. It is recommended to gradually take profits on previous long positions and for industrial customers to hedge at high prices [3][7]. - **Coking Coal and Coke**: The geopolitical situation continues to ferment. The first round of coke price cuts has started, and the coking coal spot price continues to weaken. The supply recovers faster than the demand. It is recommended to wait and see for single - side trading and establish positive arbitrage positions on the 05 contract during rebounds [7]. - **Iron Ore**: The geopolitical conflict has intensified, and the risk assets' volatility has increased. There is a certain restocking expectation for iron ore, but the long - term pressure is obvious. It is recommended for medium - and long - term investors to enter short positions at resistance levels [7].

1. Report Industry Investment Ratings - Steel: Neutral, with prices expected to oscillate [1][2] - Iron ore: Cautiously bearish, with short - term downward pressure on prices [3][4] - Coking coal and coke: Neutral, with prices expected to fluctuate [6][7] - Thermal coal: No specific strategy provided, prices in a narrow - range fluctuation [8][9] 2. Core Views - The steel market has poor sentiment, with building materials in a supply - demand weak situation and plate demand expected to improve; the iron ore market has strong supply and weak demand, and high inventory needs to be resolved by price decline; the coking coal supply is loose, and coke follows the weakening of finished products; the thermal coal price shows a narrow - range fluctuation, supported by imported coal [1][3][6][8] 3. Summary by Related Catalogs Steel - **Market Analysis**: The steel futures prices oscillated upward, while the spot trading was generally weak. The spot prices remained stable, and most regions did not follow the futures price increase. The trading volume decreased in the afternoon as the futures prices declined [1] - **Supply - Demand and Logic**: Near the Two - Sessions, macro - expectations are more volatile. Building materials have a supply - demand weak situation, with inventory rising seasonally. Plate production and sales have improved, and the demand is expected to further increase. High intermediate inventory suppresses price performance [1] - **Strategy**: Unilateral trading is expected to oscillate, and no strategies for inter - period, inter - variety, spot - futures, or options trading are provided [2] Iron Ore - **Market Analysis**: The iron ore futures prices oscillated upward, and the spot prices of mainstream imported iron ore in Tangshan ports were strong. The trading volume decreased by 31.90% compared with the previous day, and the daily average hot - metal output decreased by 5.69 tons [3] - **Supply - Demand and Logic**: The supply of iron ore remains high at high prices. The daily average hot - metal output has significantly declined, and the excessive supply and inventory suppress the price. The key to resolving high inventory is to reduce prices and suppress marginal supply [3] - **Strategy**: Unilateral trading is cautiously bearish, and no strategies for inter - period, inter - variety, spot - futures, or options trading are provided [4] Coking Coal and Coke - **Market Analysis**: The coking coal and coke futures oscillated. The coking coal production in the origin has basically returned to normal, and the trading atmosphere is average. The coke in some steel mills in Hebei and Tianjin has started the first - round price cut. The Mongolian coal customs clearance is at a high level [6] - **Supply - Demand and Logic**: The coking coal supply is loose, with slight inventory accumulation, and the price oscillates. The coke follows the weakening of finished products, and the supply - demand weak situation remains unchanged [6] - **Strategy**: Both coking coal and coke are expected to oscillate, and no strategies for inter - period, inter - variety, spot - futures, or options trading are provided [7] Thermal Coal - **Market Analysis**: In the origin, some coal mines' prices have increased, while some have decreased. At the ports, traders are more willing to sell, but the downstream acceptance of high prices is low, and the actual trading volume is limited. Imported coal prices are high [8] - **Demand - Logic**: The post - holiday demand has recovered, and the domestic coal price has continued to rise slightly due to the import supply problem. The current price is in a narrow - range fluctuation [8] - **Strategy**: No strategy is provided [9]

1. Industry Investment Rating - No information provided 2. Core Viewpoints - The supply and demand of hot-rolled coils have both weakened. The production of plate steel mills has declined, with the weekly output of hot-rolled coils decreasing by 85,000 tons week-on-week. The inventory has reached a high level, and the supply pressure has not been effectively alleviated, which continues to suppress steel prices. Meanwhile, the demand for hot-rolled coils has also weakened, with the weekly apparent demand decreasing by 97,400 tons week-on-week, significantly lower than the same period last year. The downstream cold-rolled contradictions have not been resolved, and the Middle East conflict has disrupted steel export demand, so the demand resilience of hot-rolled coils will weaken. Under the current high-inventory situation, the supply pressure of hot-rolled coils remains, while the demand resilience is weakening. With the simultaneous decline in supply and demand, the contradictions in the hot-rolled coil market continue to accumulate, and prices will continue to face pressure. Under the logic of weak reality, it is expected that hot-rolled coils will maintain a downward trend in search of a bottom. Attention should be paid to changes in demand [3]. 3. Summary by Relevant Catalog Supply - The weekly output of hot-rolled coils is 3.0111 million tons, a week-on-week decrease of 85,000 tons and a decrease of 278,200 tons compared to the same period last year. The blast furnace capacity utilization rate is 85.32%, a week-on-week decrease of 2.13 percentage points and a decrease of 0.28 percentage points compared to the same period last year. The weekly output of cold-rolled coils is 885,100 tons, a week-on-week increase of 76,000 tons and an increase of 316,000 tons compared to the same period last year [1]. Demand - The weekly apparent demand for hot-rolled coils is 2.8157 million tons, a week-on-week decrease of 97,400 tons and a decrease of 320,200 tons compared to the same period last year. The downstream cold-rolled contradictions have not been resolved, and the Middle East conflict has disrupted steel export demand, so the demand resilience of hot-rolled coils will weaken [1][3]. Inventory - The total inventory of hot-rolled coils is 4.7169 million tons, a week-on-week increase of 195,400 tons and an increase of 420,300 tons compared to the same period last year. The in-plant inventory is 900,800 tons, a week-on-week decrease of 47,000 tons and a decrease of 18,500 tons compared to the same period last year. The social inventory is 3.8161 million tons, a week-on-week increase of 242,400 tons and an increase of 438,800 tons compared to the same period last year [1].

gtaxinstitute@essence.com.cn 综合晨报 国投期货研究院 (原油) 军事冲突持续，昨夜外盘原油依然强势，WTI原油期货一度触及80美元/桶。昨日SC原油涨势相对松 动,主要因5日下午尾盘时段受突发消息影响直线跳水,最终收长上影线,夜盘呈现区间整理形态。 我们此前指出，SC强势本质是地缘风险通过运输成本在消费地价格上的放大，因此任何关于霍尔木 兹海峡通航的消息都会显著影响SC溢价部分。自冲突爆发以来，内外价差持续走阔，一度高达18.5 美元/桶，昨日SC相对Brent的溢价冲高回落但仍溢价明显。中国将派中东问题特使翟隽访问中东推 动局势降温。后续密切留意霍尔木兹海峡通航情况。当前市场消息纷杂，油价波动加剧，投资者 必做好风险控制。 【责金属】 隔夜贵金属小幅回落，美伊战局激烈但并未显现更多变化。数据方面美国周度初请失业金人数录得 21.3万人维持低位基本符合预期，美联储多位官员讲话普遍认为应关注通胀维持利率不变，市场聚 焦今晚美国非农就业和零售销售数据。 【铜】 隔夜沪铜夜盘在10万一线韧性博弈，尾盘伦铜接近再次测试MA60日均线。市场等待今日美国关键指 标，目前经济活动稳健，战局背景 ...

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - The report indicates that iron ore prices are fluctuating with a decline in hot metal production [1] Group 3: Summary by Related Catalogs Fundamental Tracking - The closing price of iron ore futures I2605 was 759.0 yuan/ton, up 7.0 yuan/ton or 0.93% The position was 498,769 hands, a decrease of 26,804 hands [1] - Among imported iron ore, the price of Carajás fines (65%) was 888.0 yuan/ton, up 4.0 yuan/ton; PB fines (61.5%) was 757.0 yuan/ton, up 5.0 yuan/ton; Jinbuba fines (61%) was 709.0 yuan/ton, up 5.0 yuan/ton; Super Special fines (56.5%) was 643.0 yuan/ton, up 5.0 yuan/ton Among domestic iron ore, the price of Hanxing (66%) and Laiwu (65%) remained unchanged at 910.0 yuan/ton and 828.0 yuan/ton respectively [1] - The basis of I2605 against Super Special fines decreased by 1.6 yuan/ton to 86.7 yuan/ton; the basis against Jinbuba fines decreased by 1.6 yuan/ton to 66.5 yuan/ton The spread of I2605 - I2609 increased by 3.0 yuan/ton to 23.5 yuan/ton, while the spread of I2609 - I2701 remained unchanged at 14.0 yuan/ton The spread of Carajás fines - PB fines decreased by 1.0 yuan/ton to 131.0 yuan/ton, while the spreads of PB fines - Jinbuba fines and PB fines - Super Special fines remained unchanged at 48.0 yuan/ton and 114.0 yuan/ton respectively [1] Macro and Industry News - The 2026 government work report focuses on stabilizing expectations, adjusting the structure, preventing risks, and promoting reforms The GDP growth target is lowered from "around 5%" to "4.5% - 5.0%", and the scale of policy - based financial instruments is increased [1] - The daily average hot metal production of 247 steel enterprises was 227.59 million tons, a decrease of 5.69 million tons compared with the previous period [2] - Five departments in Shanghai jointly issued a notice to optimize and adjust real - estate policies, which came into effect on February 26, 2026 [2] Trend Intensity - The trend intensity of iron ore is 0, indicating a neutral outlook [3]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Overseas, the escalation of military actions between the US, Israel, and Iran may last for months, leading to increased uncertainties in the energy and shipping markets. Rising oil prices strengthen inflation expectations, causing the market to postpone the expected timing of the Fed's first interest rate cut to September and expect only one cut this year. In the domestic market, the Two Sessions set the GDP target for 2026 at 4.5% - 5%, and A - shares are expected to maintain a volatile recovery in the short term [2][3]. - For precious metals, the adjustment is not over yet, with the gold price trend remaining stronger than the silver price, and the gold - silver ratio continuing to correct upwards [5]. - Copper prices are expected to maintain high - level volatility in the short term due to factors such as the impact of the US - Iran conflict on inflation and the tight supply pattern [6][7]. - Aluminum prices are expected to remain high and fluctuate widely in the short term, with geopolitical risks being the core driving factor [8][9]. - Alumina is expected to have a short - term preference for oscillation, but there is still significant upward pressure in the long term [10]. - Cast aluminum is expected to oscillate at a high level, with cost support and market sentiment being easily affected by news [11]. - Zinc prices are expected to maintain high - level oscillation, with macro factors being the main driver and high inventory still exerting pressure [12]. - Lead prices are expected to maintain low - level wide - range oscillation due to high inventory and limited demand improvement [14]. - Tin prices are expected to maintain high - level adjustment, with the market focusing on inflation and the supply improvement expectation increasing [15]. - Nickel prices are expected to remain oscillating, with the cost - end support weakening and the global nickel supply - demand structure shifting to a tight balance [16][17]. - Steel prices are expected to show an oscillating trend, with production remaining stable, apparent demand recovering, and inventory continuing to accumulate [19]. - Iron ore prices are expected to oscillate and stabilize, with supply and demand both affected by factors such as the Two Sessions and steel mill production restrictions [20]. - Coking coal and coke prices are expected to oscillate in the short term, with the profitability of coking enterprises turning positive and the market affected by factors such as steel mill production and policy support [21]. - Soybean meal and rapeseed meal prices are expected to oscillate, with the US soybean export increasing and the South American harvest gradually materializing [22][23]. - Palm oil prices are expected to oscillate strongly in the short term, supported by rising oil prices and expected inventory decline [24]. 3. Summary by Relevant Catalogs 3.1 Macro - Overseas: The military actions between the US, Israel, and Iran have escalated, with Iran refusing to negotiate and claiming the ability to counter - attack. The Asian energy market has entered an emergency state, and rising oil prices have strengthened inflation expectations, causing the market to postpone the expected timing of the Fed's first interest rate cut to September and expect only one cut this year. The US stock market closed down, the US dollar index oscillated around 99, the 10 - year US Treasury bond yield rose to 4.13%, gold, silver, and copper closed down, and oil prices rose by more than 3%. Attention is paid to the US February non - farm payroll report [2]. - Domestic: The Two Sessions set the GDP target for 2026 at 4.5% - 5%, the inflation target at 2%, the budget fiscal deficit at 5.89 trillion yuan (with a deficit rate of 4%), the local special bond quota at 4.4 trillion yuan, and issued 1.6 trillion yuan in special treasury bonds. The policy focuses on expanding domestic demand, cultivating new drivers, and developing technology, while maintaining a moderately loose monetary environment. A - shares are expected to maintain a volatile recovery in the short term [3]. 3.2 Precious Metals - On Thursday, international precious metal futures prices declined. The COMEX gold futures fell 0.81% to $5093.30 per ounce, and the COMEX silver futures fell 0.80% to $82.52 per ounce. The Fed's hawkish signals, inflation pressure, and strong employment data have strengthened the expectation of no interest rate cut, putting pressure on precious metal prices. The conflict between the US and Iran has intensified, increasing concerns about energy supply and inflation, and reducing the possibility of interest rate cuts. The market expects the Fed to keep interest rates unchanged at the March 18 policy meeting. The CME has lowered the margin for gold and silver. The adjustment of precious metals is not over yet, and the gold - silver ratio will continue to correct upwards. Investors are closely watching the US February employment report [4][5]. 3.3 Copper - On Thursday, the main contract of Shanghai copper continued to oscillate, and LME copper adjusted to around $12,800 to seek support. The domestic spot market for electrolytic copper improved, and the LME inventory rose to 261,000 tons, while the COMEX inventory remained at 600,000 tons. The US - Iran conflict has led to a rise in oil prices, increasing inflation expectations and possibly delaying the Fed's interest rate cut, which has cooled market risk appetite and put pressure on the metal market. The domestic government work report focuses on cultivating new - quality productive forces. The copper supply pattern remains tight, and the inventory accumulation rate has slowed down. Copper prices are expected to maintain high - level volatility in the short term [6][7]. 3.4 Aluminum - On Thursday, the main contract of Shanghai aluminum closed at 24,815 yuan per ton, up 1.31%, and the LME closed at $3,292.5 per ton, down 1.29%. The electrolytic aluminum ingot inventory increased by 72,000 tons to 1.229 million tons, and the aluminum rod inventory in the main domestic consumption areas increased by 5,500 tons to 403,500 tons. The core driving factor for aluminum prices is geopolitical risks, and the repeated news has intensified market fluctuations. The passage of the Strait of Hormuz remains uncertain, and the risk of supply interruption has not been eliminated. Aluminum prices are expected to remain high and fluctuate widely in the short term [8][9]. 3.5 Alumina - On Thursday, the main contract of alumina futures closed at 2,800 yuan per ton, up 0.18%. The national average spot price of alumina rose by 5 yuan to 2,673 yuan per ton, with a discount of 100 yuan per ton. The increase in the cost expectation driven by the limit - up of caustic soda futures and the reduction in supply due to the production cut of an alumina plant in Guizhou have led to a short - term preference for oscillation. However, there is still significant upward pressure in the long term due to large new and potential复产 capacities [10]. 3.6 Cast Aluminum - On Thursday, the main contract of cast aluminum alloy futures closed at 23,420 yuan per ton, up 1.23%. The cost support is significant, and casting aluminum enterprises have a strong willingness to raise prices. However, the market sentiment is easily affected by news due to the unclear situation in the Middle East. Cast aluminum is expected to oscillate at a high level [11]. 3.7 Zinc - On Thursday, the main contract of Shanghai zinc first rose and then fell during the day and continued to decline at night, and LME zinc closed down. The market supply increased, and downstream demand was weak, with the inventory continuing to accumulate. Rising oil prices have affected the Fed's interest rate cut expectation, and the US dollar is strong, which suppresses zinc prices. However, the cost support is still strong, and the policy is positive. Zinc prices are expected to maintain high - level oscillation [12]. 3.8 Lead - On Thursday, the main contract of Shanghai lead oscillated horizontally during the day and declined at night, and LME lead closed down. Due to equipment maintenance and policy control, the resumption of some secondary lead smelters has been postponed to April, and the supply pressure has been relieved. However, the downstream battery factories and dealers have high inventory, and the demand for replenishment is weak. The social inventory remains at a high level, and lead prices are expected to maintain low - level wide - range oscillation [14]. 3.9 Tin - On Thursday, the main contract of Shanghai tin dived in the afternoon, stabilized at the end of the session, and oscillated narrowly at night, and LME tin oscillated. The concern about the obstruction of the Strait of Hormuz has eased, and the US Treasury will announce measures to deal with rising energy prices. The supply improvement expectation has increased, and the support from the supply side has weakened. However, the decline in futures prices has increased the downstream replenishment expectation, limiting the adjustment space of futures prices. Tin prices are expected to maintain high - level adjustment [15]. 3.10 Nickel - On Thursday, the main contract of Shanghai nickel maintained oscillation, and LME nickel adjusted to around 17,300 to seek support. The global energy crisis concern has cooled down in the short term, and the risk - aversion sentiment has declined. Although the Philippines is in the rainy season, the nickel ore export has not decreased significantly. Considering the supply increase after the rainy season, the upward trend of nickel ore prices may not be sustainable. The cost - end support has weakened, and the global nickel supply - demand structure will shift to a tight balance. Nickel prices are expected to remain oscillating [16][17]. 3.11 Steel (Screw and Coil) - On Thursday, steel futures oscillated. The spot market trading volume was 60,000 tons. The supply of the five major steel products increased slightly, the total inventory increased by 5.7%, and the consumption of building materials increased by 90.8%. The Two Sessions are in line with expectations, and the macro - policy is positive. However, the real estate market is still at risk, and the terminal expectation is moderate. Steel production remains stable, the apparent demand recovers, and the inventory continues to accumulate. Steel prices are expected to show an oscillating trend [19]. 3.12 Iron Ore - On Thursday, iron ore futures oscillated. The port spot trading volume was 720,000 tons. The supply from overseas increased slightly, and the arrival decreased. The inventory pressure is still large. The macro - expectation has landed, and the steel mills in the north are under production restrictions, so the demand is limited. Iron ore prices are expected to oscillate and stabilize [20]. 3.13 Coking Coal and Coke - On Thursday, coking coal and coke futures oscillated. The profitability of coking enterprises has turned positive, and the production has remained stable. However, the inventory pressure of coking enterprises has increased, and there is an expectation of price cuts for coke. The coal production in the origin has returned to normal, and the supply of coking coal is loose. The demand from steel mills in Tangshan and other places is limited, and they mainly consume inventory. Coking coal and coke prices are expected to oscillate in the short term [21]. 3.14 Soybean Meal and Rapeseed Meal - On Thursday, the soybean meal 05 contract rose 0.28% to 2,843 yuan per ton, and the rapeseed meal 05 contract rose 0.13% to 2,318 yuan per ton. The US soybean export increased by 383,500 tons this week. The production estimates of soybeans in South America have been adjusted slightly, and the supply and export are increasing. The import cost of soybeans supports the domestic market, but the upward space is limited. Soybean meal and rapeseed meal prices are expected to oscillate [22][23]. 3.15 Palm Oil - On Thursday, the palm oil 05 contract rose 1.28% to 9,070 yuan per ton. The rise in oil prices has led to an increase in diesel prices, and the palm oil price is at a discount compared to diesel. The threat of interrupted vegetable oil transportation through the Middle East route has supported the palm oil price. The market expects the inventory of Malaysian palm oil to continue to decline at the end of February, and India may increase palm oil purchases. Palm oil prices are expected to oscillate strongly in the short term [24].

Financial Engineering - As of February 28, 2026, there are 13,817 existing funds in the market, an increase of 95 funds compared to the previous month. The total net asset value of funds is 37.23 trillion yuan, which is an increase of 9.7 billion yuan, indicating a slight growth in the fund market size [2] - In February 2026, the returns of value, balanced, and growth fund indices were 1.00%, 1.40%, and 0.72% respectively, with balanced funds outperforming growth funds, showing a certain degree of performance divergence among different styles of funds [2] ETF Market Tracking - As of February 28, 2026, there are 1,446 ETFs in the Shanghai and Shenzhen markets, an increase of 16 from the previous period. The total asset management scale is 5.39 trillion yuan, a decrease of 73.79 billion yuan, while the total shares amount to 33.4 trillion, an increase of 60.17 billion shares [3] - In February, the median return of stock ETFs was 0.70%, while cross-border ETFs had the lowest median return of -3.30%. Bond ETFs had a median return of 0.21%, outperforming commodity ETFs [3] - Cross-border ETFs exhibited the highest internal deviation in February, while stock and commodity ETFs had internal deviations of 3.18% and 0.89% respectively. Bond ETFs had the lowest internal deviation at 0.11% [3] ETF Strategy Tracking - The industry ETF rotation strategy focused on steel, coal, and non-ferrous metals in February 2026, achieving a cumulative return of 6.17%, significantly outperforming the cumulative return of the CSI 300 index at 0.09%, resulting in an excess return of 6.08%. Year-to-date, the strategy's cumulative return is 71.82%, compared to the CSI 300's 21.67%, yielding an excess return of 50.15% [4] - The PB-ROE framework's industry ETF rotation strategy focused on non-ferrous metals, transportation, and utilities in February 2026, with a cumulative return of 4.25%, again outperforming the CSI 300 index's 0.09% return, leading to an excess return of 4.16%. Year-to-date, this strategy's cumulative return is 34.51%, compared to the CSI 300's 21.67%, resulting in an excess return of 12.84% [4] Investment Recommendations - For March 2026, there is a positive outlook on the non-ferrous metals, steel, and coal industries, with corresponding ETFs recommended for these sectors. Additionally, based on the PB-ROE situation and supplementary indicators, the ETF rotation strategy suggests focusing on the communication, agriculture, forestry, animal husbandry, and coal industries, with corresponding ETFs recommended for these sectors as well [5]

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - **For the steel sector**: The market is currently in a state of weak supply and demand, with low production and demand and a rapid increase in inventory from a low level. Although the impact of the sharp rise in crude oil prices on black commodities is limited, it has a certain boost to the overall market sentiment. The downstream demand is expected to gradually start, but the market's demand expectation for this year is relatively weak, and the expectation for the fundamentals is pessimistic. The futures price is oscillating at a low level, indicating strong support below. Due to the current low valuation, the downside space may be limited [1]. - **For the iron ore sector**: The market is gradually entering the consumption peak season. The output of the five major steel products of 247 sample steel mills remains stable, and the daily average hot metal output has rebounded from a low level. The supply side has seen an increase in shipments and a decrease in arrivals, but the port inventory has continued to rise and reached a record high. Technically, the futures price has rebounded rapidly, breaking through the important resistance level above, and the medium - term downward trend may end [3]. 3. Summary by Relevant Catalogs 3.1. Thread and Hot Roll - **Market situation**: After the US - Israel attack on Iran, the sharp rise in crude oil prices has a limited impact on black commodities but boosts the overall market sentiment. The market is in a state of weak supply and demand, with low production and demand and increasing inventory [1]. - **Operation suggestions**: Maintain a wait - and - see attitude and trade cautiously [1]. - **Data summary**: - **Price**: The closing prices of the main contracts of rebar and hot - rolled coil have decreased to varying degrees compared with the previous day and the previous week. The spot prices of rebar and hot - rolled coil have also decreased [1]. - **Basis and spread**: The basis and spread of rebar and hot - rolled coil futures have changed, with some increasing and some decreasing [1]. - **Production**: The output of rebar and hot - rolled coil has decreased slightly, and the production of electric - arc furnace steel mills has changed, with the output of electric - arc furnace rebar increasing significantly [1]. - **Inventory**: The social inventory of the five major varieties has increased, while the steel mill inventory has decreased slightly. The inventory of billets in the Tangshan area has increased [1]. - **Trading volume and apparent demand**: The trading volume in the spot market has decreased, and the apparent demand has increased [1]. - **Futures warehouse receipts**: The number of registered warehouse receipts for rebar has decreased, while that for hot - rolled coil has increased [1]. 3.2. Iron Ore - **Market situation**: The market is gradually entering the consumption peak season. The output of the five major steel products remains stable, and the hot metal output has rebounded from a low level. The supply side has seen an increase in shipments and a decrease in arrivals, but the port inventory has continued to rise and reached a record high [3]. - **Operation suggestions**: Adopt a wait - and - see attitude, treat it with an oscillating mindset, avoid chasing up or selling down. When the futures price is oscillating and building a bottom, try to go long at a low position with a light position [3]. - **Data summary**: - **Price**: The spot and futures prices of iron ore have increased to varying degrees compared with the previous day and the previous week [4]. - **Basis and spread**: The basis and futures monthly spread of iron ore have changed, with some increasing and some decreasing [4]. - **Shipment and freight**: The shipment volume from Australia has decreased, while that from Brazil has increased. The freight rates and exchange rates have also changed [4]. - **Arrival and inventory**: The arrival volume of iron ore has increased slightly, the daily average port clearance volume has decreased, and the port inventory has continued to rise [4]. - **Production**: The output of domestic iron ore mines has decreased [4]. - **Futures warehouse receipts**: The number of futures warehouse receipts has decreased [4]. 3.3. Industry News - **Steel production restrictions**: During the important national meetings in 2026, steel enterprises are required to implement phased emission reduction control, with some steel enterprises having new blast furnace overhauls and production reduction plans [6]. - **Coking coal production**: The capacity utilization rate of coking coal mines has increased, and the daily output and inventory of raw coal have also increased [6]. - **Real estate policy**: The draft of the "15th Five - Year Plan" proposes to promote the high - quality development of the real estate market and build a new real - estate development model [6]. - **Iron ore procurement**: Chinese state - owned iron ore purchasers have expanded the procurement restrictions on new seaborne iron ore goods from BHP due to a long - term contract dispute [8]. - **Coking plant profitability**: The average profit per ton of coke in 30 independent coking plants across the country is 17 yuan/ton, with different profit levels in different regions [8]. - **Glass inventory**: The total inventory of national float glass sample enterprises has continued to increase, approaching a three - year high [8].

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the macroeconomic policies and outlook for the Chinese economy in 2026, emphasizing a "systematic slow bull" market trend. The economic growth target is set at 4.5%-5% for the year, allowing room for structural adjustments, risk prevention, and reforms to lay a solid foundation for future development [1][2]. Core Insights and Arguments 1. **Macroeconomic Policy Continuity**: - The report indicates a stable policy environment with a 4% deficit rate and a deficit scale of 5.89 trillion yuan, implying a nominal GDP growth rate of 5%. The weighted average GDP growth target for provinces is 5.04%, supporting the national goal [2][3]. 2. **Monetary and Fiscal Policy**: - A moderately loose monetary policy combined with more proactive fiscal measures is expected to maintain an expansionary stance. The focus will be on optimizing expenditure structures, with resources directed towards consumption and livelihood [3]. 3. **Consumer and Investment Focus**: - The report emphasizes stimulating domestic consumption and expanding investment. It highlights the importance of policies to boost consumer spending, particularly in service sectors such as tourism, hospitality, and retail [3][4]. 4. **Investment in Key Sectors**: - The report calls for increased government investment in new productivity, urbanization, and comprehensive human development. It suggests a focus on high-end manufacturing, infrastructure, and social welfare, while also addressing "involution" in competitive sectors [4]. 5. **Emerging Industries and New Growth Drivers**: - There is an urgent need to cultivate new growth drivers, with a focus on emerging industries such as integrated circuits, aerospace, biomedicine, and low-altitude economy. The report indicates a shift towards more aggressive resource allocation in these areas [4][5]. 6. **Artificial Intelligence and New Infrastructure**: - The report advocates for the development of a new intelligent economy, promoting the commercialization of AI applications and the construction of new infrastructure related to AI. This year is anticipated to be a pivotal year for AI applications [5]. Additional Important Content - **Risk Factors**: - Potential risks include unexpected changes in the international situation and slower-than-expected policy implementation [6]. This summary encapsulates the key points from the conference call, providing insights into the macroeconomic outlook, policy directions, and potential investment opportunities within the Chinese economy.