Consumption - Service consumption continues to decline, while durable goods consumption shows weakness[5] - Food and clothing consumption sees seasonal increases, but overall demand remains weak[5] - Movie attendance and box office revenue drop to historical lows, indicating reduced consumer interest[6] Investment - Real estate sector remains weak, with new home sales not showing sustained improvement despite policy optimizations in major cities[15] - Infrastructure investment shows marginal recovery, but overall funding remains below last year's levels[15] Trade and Export - Domestic export prices continue to decline, with a decrease of 2.1% in export freight rates, indicating a retreat from technical rush shipments[22] - Port activity increases with the upcoming Christmas stocking season, reflecting a rise in overseas demand[22] Production - Overall production heat is recovering, with significant increases in coal consumption and steel production rates[25] - The operating rate for PTA has rebounded significantly, driven by increased demand in the textile sector[27] Prices and Inflation - CPI remains stable, while PPI shows a general decline, with industrial prices mostly decreasing[37] - Cement prices have dropped by 2.0% due to weak construction demand, while copper and aluminum prices have increased by 1.4% and 1.8%, respectively[37] Liquidity - The 10-year government bond yield rises to 1.86%, the highest level in 2025, reflecting strong equity market performance and improved inflation data[39] - The overall liquidity remains stable, with a net injection of 196.1 billion yuan through reverse repos by the central bank[39] Risks - Trade uncertainties and escalating geopolitical risks pose significant threats to market stability[46]

Price Summary - Steel prices have decreased this week, with Shanghai 20mm HRB400 rebar priced at 3270 CNY/ton, down 30 CNY/ton from last week [1][2] - High-line 8.0mm is priced at 3420 CNY/ton, down 50 CNY/ton [1][2] - Hot-rolled 3.0mm is at 3420 CNY/ton, down 40 CNY/ton [1][2] - Cold-rolled 1.0mm is priced at 3830 CNY/ton, down 50 CNY/ton [1][2] - Common medium plate 20mm is at 3470 CNY/ton, down 50 CNY/ton [1][2] - Domestic ore prices are stable to rising, while imported ore prices are stable to falling, and scrap steel prices have decreased [2] Profit Analysis - Steel profits have declined this week, with rebar, hot-rolled, and cold-rolled margins changing by -58 CNY/ton, -50 CNY/ton, and -42 CNY/ton respectively [2] - Electric arc furnace steel margins have decreased by -34 CNY/ton [2] Production and Inventory - Total production of five major steel products reached 8.78 million tons, an increase of 64,300 tons week-on-week [3] - Construction steel production decreased by 37,100 tons week-on-week, while plate production increased by 101,400 tons [3] - Rebar production decreased by 58,000 tons to 2.1465 million tons [3] - Total social inventory of five major steel products increased by 264,300 tons to 10.1621 million tons [3] - Steel mill inventory decreased by 13,000 tons to 4.2383 million tons [3] - Apparent consumption of rebar was estimated at 1.948 million tons, an increase of 48,600 tons week-on-week [3] Investment Recommendations - The expansion of U.S. steel and aluminum tariffs has put pressure on steel prices [4] - The U.S. Department of Commerce has extended tariffs to 407 categories of steel and aluminum derivatives, affecting most downstream steel manufacturing [4] - Seasonal demand weakness and a vacuum in supply-side policies have led to a significant narrowing of steel mill profits [4] - Long-term capacity management remains a key focus, with a combination of market-oriented and administrative measures expected to optimize crude steel supply [4] - Recommended stocks include: - General steel sector: Hualing Steel, Baosteel, Nanjing Steel [4] - Special steel sector: Xianglou New Materials, CITIC Special Steel, Yongjin Co. [4] - Pipe materials: Jiuli Special Materials, Youfa Group, Wujin Stainless Steel [4] - Suggested focus on high-temperature alloy stocks: Fushun Special Steel [4]

Core Viewpoint - Ansteel Co., Ltd. (鞍钢股份) has shown a positive stock performance with a closing price of 2.89 yuan, reflecting a 3.96% increase on July 29, 2025, indicating investor confidence in the company [1] Company Overview - Ansteel Co., Ltd. is primarily engaged in the production and sale of steel products, including hot-rolled sheets, cold-rolled sheets, galvanized sheets, color-coated sheets, medium and heavy plates, wire rods, and large profiles [1] - The company is a significant player in the steel industry in China [1] Financial Performance - On July 29, 2025, the trading volume for Ansteel was 778,627 hands, with a total transaction amount of 220 million yuan [1] - The net inflow of main funds into Ansteel on the same day was 46.41 million yuan, accounting for 0.2% of its circulating market value [1] - The stock price fluctuated between 2.75 yuan and 2.91 yuan, with a volatility of 5.76% [1] Business Operations - Ansteel has announced that its imported iron ore business is entrusted to Ansteel Group International Economic and Trade Co., Ltd., utilizing a settlement method in RMB, which helps mitigate exchange rate fluctuation risks [1]

Core Viewpoint - The domestic steel market is experiencing a strong price performance, with various steel products showing price increases over the past week, indicating a positive trend in the industry [1][3]. Price Summary - The average price of rebar is 3259.20 CNY/ton, up by 27.60 CNY/ton (0.85%) from the previous week [1][3]. - The average price of wire rod is 3506.60 CNY/ton, up by 28.80 CNY/ton (0.83%) from the previous week [1][3]. - The average price of hot-rolled sheets is 3331.00 CNY/ton, up by 27.60 CNY/ton (0.84%) from the previous week [1][3]. - The average price of medium and large profiles is 3398.60 CNY/ton, up by 21.20 CNY/ton (0.63%) from the previous week [1][3]. - The average price of welded pipes is 3553.43 CNY/ton, up by 16.14 CNY/ton (0.46%) from the previous week [3]. - The average price of seamless pipes is 4226.43 CNY/ton, up by 0.57 CNY/ton (0.01%) from the previous week [3]. Market Performance - The steel sector index increased by 4.41% over the past week, outperforming the Shanghai Composite Index (1.09%) and Shenzhen Component Index (1.78%) [2]. - Among the sub-sectors, plate, pipe, and special steel saw increases of 5.37%, 3.38%, and 2.12% respectively [2]. - Year-to-date, the plate and special steel sectors have increased by 13.92% and 8.34% respectively [2]. - 39 steel stocks rose this week, with 86.67% of stocks increasing, 2.22% remaining stable, and 11.11% declining [2]. Raw Material Prices - The iron ore market is also showing slight upward movement, with the Platts iron ore price index averaging 96.11 USD/ton, up by 2.02 USD/ton (2.15%) [3]. - The average price of domestic iron ore imports is 689.20 CNY/ton, up by 18.00 CNY/ton (2.68%) [3]. Policy Impact - New policies are set to increase the green electricity consumption ratio in the steel industry to between 25.2% and 70% by 2025, promoting low-carbon development [4]. - The initiative aims to enhance the green electricity consumption in related industries, accelerating the transition to a low-carbon economy [4]. Investment Outlook - The domestic steel market is expected to benefit from improved supply-demand dynamics, with a focus on leading companies in the rebar sector and those in the special steel segment [5]. - The industry is poised for growth due to manufacturing upgrades and AI transformation, supported by new policies [5].

Core Insights - The report highlights the steel industry's two main contradictions: weak demand and strong costs, with the industry entering its fourth year of a downward cycle in 2025. The effective demand has significantly decreased, particularly in the real estate sector, leading to a 42.9% drop in demand for steel used in real estate from 377 million tons in 2020 to 215 million tons in 2024 [6][18][25]. - The report anticipates a marginal rebound in the steel sector due to weakening costs and resilient demand, driven by a decline in coking coal prices and an expected increase in iron ore supply [6][37][45]. Demand and Cost Analysis - Weak demand is characterized by insufficient effective demand, making it easier to maintain volume than prices. The real estate sector's demand for steel has plummeted, contributing to a significant overall decline in steel prices [6][18][25]. - Strong costs are attributed to tight supply of raw materials like iron ore and coking coal, which have severely squeezed steel profits. The profit share of steel in the industrial chain has dropped to 16%, significantly below the historical average of 28% [6][31][34]. Supply-Side Strategies - The report discusses the "anti-involution" policy aimed at addressing excess capacity in the steel industry, which is expected to stabilize steel prices and improve profitability for steel companies. A potential reduction of 30 million tons in crude steel production in 2025 could lead to a price increase of 229 yuan per ton for rebar [6][8][37]. - Long-term capacity reduction is expected to be gradual, with approximately 20% of capacity facing compliance challenges, particularly among small private enterprises, which may face pressure to exit the market starting in 2026 [6][8][37]. Investment Opportunities - The report suggests focusing on leading companies in high-end steel products, such as Nanjing Steel, Hualing Steel, and Baosteel, which are expected to maintain profitability and enhance shareholder returns through capital expenditure and asset optimization [6][8][37]. - It also highlights the potential for recovery in valuation and performance for companies with low price-to-book ratios, such as New Steel and Fangda Special Steel, as well as opportunities in state-owned enterprise reforms and mergers and acquisitions [6][8][37].

Investment Rating - The industry investment rating is Neutral, maintained [11] Core Insights - Steel exports showed resilience with a volume of 10.58 million tons in May 2025, up 11.5% year-on-year and 1.1% month-on-month, despite a decline in export prices [2][8] - The report highlights that the growth in steel exports is supported by the opening of new markets in Southeast Asia and the Middle East, which offsets declines from traditional markets like Vietnam and South Korea due to anti-dumping measures [8][10] - The export structure is shifting towards higher-value products, with significant increases in the export volumes of rebar and wire rods, which counterbalance declines in flat steel products [9][10] Summary by Sections Export Performance - In May 2025, steel export volume reached 10.58 million tons, reflecting a year-on-year increase of 11.5% and a month-on-month increase of 1.1%. The average export price was $698 per ton, down 8.5% year-on-year but up 0.5% month-on-month [2][8] - The report notes that the export volume exceeded market expectations, particularly in light of anticipated declines due to geopolitical tensions and trade conflicts [2][8] Market Dynamics - The report indicates that the overall demand for steel remains weak, with apparent consumption down 2.34% year-on-year but up 2.21% month-on-month [6] - Inventory levels have slightly decreased, with total steel inventory down 1.19% week-on-week, indicating a gradual reduction in stockpiles as the market enters a seasonal lull [7] Export Market Analysis - The report identifies that while exports to Vietnam and South Korea have declined significantly (26% and 11% respectively), exports to Turkey, Saudi Arabia, Indonesia, and Malaysia have increased by 27%, 51%, 17%, and 41% respectively [8][9] - The shift in export focus to emerging markets is seen as a strategic response to the challenges posed by anti-dumping tariffs in traditional markets [10] Product Mix and Pricing - The growth in exports of construction steel products has helped mitigate the decline in flat steel exports, with rebar and wire rod exports increasing by 89% and 40% respectively [9][10] - The report emphasizes that the export price decline is part of a broader strategy of "trading price for volume," which may lead to future trade disputes but currently supports export volumes [10]

Group 1: Production and Sales - In 2024, the company achieved a steel production of 51.41 million tons, a decrease of 1% year-on-year, and sales of 51.59 million tons, down 0.6% [1] - Cold-rolled plate sales reached 21.21 million tons, an increase of 3.4% [1] - The company exported 6.067 million tons of steel, marking a historical high with a growth of 3.94% [1] Group 2: Revenue and Profitability - The total operating revenue for 2024 was 322.116 billion yuan, a decline of 6.60% year-on-year, primarily due to decreased market demand and lower sales prices [2] - The average steel price in 2024 was 4,523 yuan per ton, down 6.57% [2] - The gross profit margin for 2024 was 5.5%, a decrease of 0.75 percentage points [2] Group 3: Expenses and Net Profit - The expense ratio for 2024 was 3.34%, an increase of 0.31 percentage points [3] - The company recorded a net profit attributable to shareholders of 7.362 billion yuan in 2024, a decrease of 38.36% [3] - In Q1 2025, the net profit attributable to shareholders was 2.434 billion yuan, an increase of 26.4% [3] Group 4: Financial Health and Dividends - The company's asset-liability ratio for 2024 was 39.7%, a decrease of 1.8 percentage points [3] - The company plans to distribute a cash dividend of 0.21 yuan per share for H2 2024, accounting for 61.34% of the net profit for that period [4] Group 5: Future Outlook - The company is focusing on optimizing product structure and investing in advanced technology to enhance core competitiveness [4] - Future net profit projections for 2025-2027 are 9.758 billion, 10.467 billion, and 11.452 billion yuan, respectively [4]

Investment Rating - The industry investment rating is Neutral, maintained [9] Core Insights - The report highlights three positive signals for the steel industry: 1) Steel prices and inventory have dropped to low levels, leading to a market sentiment of "hope for price increases"; 2) Expectations of production cuts are strengthening, which is driving profits in the futures market and supporting steel stock prices; 3) Improved expectations in the real estate sector may benefit the entire industry chain [2][6][12] Summary by Sections Market Trends - Since April, steel prices and stocks have been in a downward trend due to trade shocks. However, recent easing of trade conflicts has led to a rebound in steel stocks [2][6] - The apparent consumption of steel has decreased by 2.82% week-on-week and 4.02% year-on-year, indicating a seasonal decline in demand [4] Production and Inventory - Daily average pig iron production has risen to 2.4435 million tons, an increase of 4.23 thousand tons per day compared to the previous week [5] - National total inventory has decreased by 3.25% week-on-week, with long product inventory down 4.73% year-on-year [5] Price Movements - Shanghai rebar prices have increased to 3,200 CNY per ton, up 70 CNY from the previous week, while hot-rolled prices have risen to 3,230 CNY per ton, up 20 CNY [5] - The report notes that the market sentiment is shifting towards optimism as steel prices stabilize and inventory levels decrease [12] Investment Opportunities - The report suggests focusing on undervalued quality companies in the steel sector, such as Baosteel and Nanjing Steel, as well as companies with strong performance potential like Hualing Steel and New Steel [27]