November 28, 2025 09:09 AM GMT M O R G A N S T A N L E Y R E S E A R C H Towards a New Equilibrium November 2025 M O R G A N S T A N L E Y R E S E A R C H Europe Morgan Stanley & Co. International plc+ European Equity Research Alain Gabriel, CFA EQUITY ANALYST Alain.Gabriel@morganstanley.com +44 (0)20 7425 8959 Ioannis Masvoulas, CFA EQUITY ANALYST Ioannis.Masvoulas@morganstanley.com +44 (0)20 7425 0427 Adahna Ekoku EQUITY ANALYST Adahna.Ekoku@morganstanley.com +44 20 7677-0065 Ferdinand Huber RESEARCH ASSO ...

Core Insights - Ryerson Holding Corporation reported third quarter revenue of $1.16 billion, which is in line with guidance, with average selling prices increasing by 2.6% and tons shipped decreasing by 3.2% compared to the previous quarter [4][5][6] - The company experienced a net loss of $14.8 million, or a diluted loss per share of $0.46, compared to a net income of $1.9 million in the previous quarter [8][4] - Ryerson ended the quarter with total debt of $500 million and net debt of $470 million, reflecting a decrease from the previous quarter [4][8] Financial Highlights - Revenue for Q3 2025 was $1,161.5 million, a decrease of 0.7% from Q2 2025 but an increase of 3.1% year-over-year [3][4] - Tons shipped in Q3 2025 were 485,000, down 3.2% from Q2 2025 and unchanged from Q3 2024 [3][4] - Average selling price per ton increased to $2,395, up 2.6% from Q2 2025 and 3.1% year-over-year [3][4] - Gross margin contracted to 17.2%, down 70 basis points from Q2 2025 [6][3] Operational Insights - The company executed a self-help strategy to manage operations amid ongoing challenges, including weak demand and tariff pricing conditions [5][6] - Areas of weakness included OEM contract shipments and carbon steel margin compression, while strengths were noted in transactional sales growth [5][6] - Operating expenses decreased by 1.5% compared to Q2 2025, driven by lower variable expenses [7][3] Debt and Liquidity - Ryerson recorded a cash outflow from operating activities of $8.3 million in Q3 2025, compared to an inflow of $23.8 million in Q2 2025 [8][4] - The company’s global liquidity, including cash and available credit, was $521 million as of September 30, 2025, up from $485 million at the end of Q2 2025 [8][4] Shareholder Returns - A quarterly cash dividend of $0.1875 per share was declared, payable on December 18, 2025 [9][4] - No share repurchases occurred during the quarter, with $38.4 million remaining under the existing authorization [10][4] Merger Agreement - Ryerson entered into a definitive merger agreement to acquire Olympic Steel, with shares to be converted based on a fixed exchange ratio [11][12] - The completion of the acquisition is subject to customary closing conditions, including stockholder approvals [12][11] Outlook - For Q4 2025, Ryerson expects customer shipments to decrease by 5% to 7% quarter-over-quarter, with anticipated net sales between $1.07 billion and $1.11 billion [13][4] - Average selling prices are expected to remain flat to up 2%, with LIFO expenses projected between $10 million and $14 million [13][4]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **European Steel Industry**, highlighting significant policy shifts and market dynamics as of October 2025 [6][7][8]. Core Insights and Arguments - **Policy Changes**: The EU's proposal to halve import quotas and double safeguard duties to 50% indicates a strong protectionist stance, which may lead to additional policy tailwinds from the upcoming CBAM review [6][7]. - **Market Conditions**: Hot-rolled coil (HRC) price gains are primarily policy-driven, while end-user consumption remains weak in construction and manufacturing sectors [6][7]. - **Carbon Steel Outlook**: - **Bull Case**: Preference for voestalpine due to local-for-local strategy, superior margins, and exposure to Railway Systems, which provides earnings resilience [7]. - **ArcelorMittal** is noted for its operating leverage to policy tightening, with lower utilization rates allowing for volume growth and import displacement [7]. - **Least Preferred**: Salzgitter and thyssenkrupp due to cash burn and execution risks [7]. - **Stainless Steel Market**: - Anticipated gradual repricing due to policy tightening and CBAM rollout, expected to reduce import penetration by approximately 20% [8]. - **Preferred Companies**: Acerinox for its U.S. footprint and high-alloy mix, and Aperam for its diversified business model [8][10]. - **Least Preferred**: Outokumpu due to lack of exposure beyond stainless steel [8]. Financial Performance and Valuation - **ArcelorMittal**: Despite a strong long-term investment case, the recent share re-rating is misaligned with earnings impacts from potential Ukraine rebuild, leading to a more balanced risk-reward profile [9]. - **voestalpine**: Maintains resilient EBITDA/t during downturns, with manageable decarbonization investments minimizing free cash flow burn [9]. - **thyssenkrupp**: Shares have doubled year-to-date, but the valuation appears to be at a 20-30% premium to its sum-of-the-parts (SotP) valuation, indicating execution risks [9]. - **Salzgitter**: Expected cash burn to intensify due to decarbonization spending, with current valuation levels not providing sufficient margin of safety [9]. Demand Drivers - Key demand drivers for steel include **construction** and **automotive** sectors, with significant contributions from building and infrastructure [20][21]. - **Automotive Demand**: New vehicle registrations in Western Europe and the U.S. are critical indicators of steel demand, with trends showing fluctuations in production and registrations [27][28][29]. Supply Dynamics - **Global Steel Production**: The center of gravity for steel production is shifting towards Asia, with significant contributions from China [18]. - **EU and U.S. Production**: Annualized steel production in the EU and U.S. is monitored, with trends indicating varying levels of output [65][66]. Trade Flows and Import Dynamics - **EU Steel Imports**: The report details the import quotas and utilization rates for various countries, highlighting Turkey, India, and South Korea as significant contributors [88][89]. - **Stainless Steel Trade**: The report outlines the trade flows for stainless steel, with India and Taiwan being major import sources for the EU [90][91]. Additional Insights - **Market Sentiment**: The overall sentiment in the steel market is cautious, with a focus on balancing supply and demand amid changing policy landscapes and economic conditions [6][7][8]. - **Investment Recommendations**: Analysts recommend a selective approach to investments in the steel sector, favoring companies with strong fundamentals and strategic positioning [7][9][10]. This summary encapsulates the critical aspects of the conference call, providing a comprehensive overview of the European steel industry's current state and future outlook.

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Views of the Report - For copper, maintain a callback buying strategy, considering the continuous tightness in the mining end and the growth in infrastructure and power demand in Southeast Asia and the Middle East. Pay attention to the support around $10,300 for LME copper, and consider selling put options below $10,000 or gradually building virtual inventories [1] - For aluminum, the short - term fundamentals are acceptable, and it is advisable to hold at low prices in the long term [1] - For zinc, due to the poor domestic fundamentals but potential export opportunities, and increased macro uncertainties, it is recommended to wait and see. Consider gradually taking profits on domestic - foreign positive spreads and pay attention to reverse spreads in the far - month contracts. Also, pay attention to the positive spread opportunity between December and February contracts [2] - For nickel, the short - term real - world fundamentals are weak, but with potential policy - supported price increases from Indonesia [3][4] - For stainless steel, the fundamentals remain weak, with increased short - term trade friction uncertainties and potential price - support policies from Indonesia [9] - For lead, the price is expected to maintain a high - level oscillation between 17,000 and 17,400 next week, with a potential weakening trend in the future [12] - For tin, follow the macro sentiment in the short term, wait and see, and consider holding at low prices near the cost line in the medium - to - long term [15] - For industrial silicon, the supply - demand is balanced in Q4, and the price is expected to oscillate at the cycle bottom based on the seasonal marginal cost in the long term [16] - For lithium carbonate, the price has high elasticity after supply - side disturbances are realized and strong downward support before such disturbances [16] Group 3: Summary by Metal Copper - Price data shows changes in various indicators from September 29 to October 13, such as a 55 increase in spot premium and a 2926 increase in SHFE warehouse receipts [1] - Macro - level: Trump's tariff announcement led to a 4.5% drop in LME copper on Friday. The impact may be less than the Qingming Festival disturbance. There is still room for negotiation, and the progress of the South Korea negotiation should be monitored [1] - Fundamental: Smelting production cuts exceeded expectations, and there was medium - level inventory accumulation this week. After the price drop on Friday, the volume of pricing and receiving goods is expected to increase next week, leading to inventory reduction. Pay attention to the stability of copper cable production [1] Aluminum - Price data shows changes in aluminum prices, alumina prices, and inventory from September 29 to October 13, such as a 190 decrease in the Shanghai aluminum ingot price [1] - Fundamental: The operating capacity is increasing slightly. The production of photovoltaic modules has stabilized, and the proportion of molten aluminum has rebounded in September. There is seasonal inventory accumulation due to the holiday effect. The global economic recovery and Fed's rate - cut expectations coexist with Sino - US trade uncertainties, causing a divergence in domestic and foreign market trends [1] Zinc - Price data shows changes in zinc prices, inventory, and other indicators from September 29 to October 13, such as a 100 decrease in the Shanghai zinc ingot price [2] - Supply: Domestic TC is decreasing, and imported TC is increasing. Domestic mines will be tighter from Q4 to Q1 next year, while overseas mines had an unexpected increase in Q2. The smelting end is slightly recovering in October [2] - Demand: Domestic demand is seasonally weak, and overseas demand in Europe is average. Some overseas smelters face production difficulties due to processing fees [2] - Strategy: The domestic fundamentals are poor, but the export window may open. Due to increased macro uncertainties, it is recommended to wait and see [2] Nickel - Price data shows changes in nickel - related prices from September 29 to October 13, such as a 1300 decrease in the SHFE nickel spot price [3] - Fundamental: Pure nickel production remains high. Demand is weak, and inventory is stable domestically but increasing overseas. The short - term fundamentals are weak [3][4] - News: The protests in Indonesia have subsided, but there are still disturbances in the mining end, and the policy side has a motivation to support prices [4] Stainless Steel - Price data shows a decrease in stainless - steel prices from September 29 to October 13, such as a 50 decrease in the 304 cold - rolled coil price [9] - Fundamental: Steel mills' production in October is slightly increasing. Demand is mainly for rigid needs. Costs are stable, and inventory has increased during the holiday [9] - Policy: There is potential price - support from Indonesian policies, and trade friction uncertainties have increased [9] Lead - Price data shows changes in lead - related prices and inventory from September 29 to October 13, such as a 9293 decrease in the SHFE inventory [12] - Supply: The scrap volume is weak year - on - year. The profit of recycled lead has recovered, and the production is expected to increase by 30,000 tons in October. The primary lead production may decrease partially, and the recycled lead production will increase, with a total increase of 20,000 - 30,000 tons [12] - Demand: The battery production rate increased this week, but the finished - product inventory is high. After the National Day holiday, the demand may weaken [12] - Price forecast: The price is expected to oscillate between 17,000 and 17,400 next week and may weaken in the future [12] Tin - Price data shows changes in tin - related indicators from September 29 to October 13, such as a 4990 decrease in the tin position [15] - Supply: The processing fee of tin ore is low, and some domestic smelters have cut production. Overseas supply is expected to recover in October, and Indonesian exports have resumed [15] - Demand: The solder market has slightly recovered during the peak season. Domestic inventory has decreased slightly, and overseas LME inventory is oscillating at a low level [15] - Strategy: Follow the macro sentiment in the short term, wait and see, and consider holding at low prices near the cost line in the medium - to - long term [15] Industrial Silicon - Price data shows changes in industrial - silicon - related basis and warehouse receipts from September 29 to October 13, such as a 120 decrease in the 421 Yunnan basis [16] - Supply: A leading enterprise in Xinjiang has resumed production, and the production in Sichuan and Yunnan is stable. There is a strong expectation of production cuts in November [16] - Outlook: The supply - demand is balanced in Q4, and the price is expected to oscillate at the cycle bottom based on the seasonal marginal cost in the long term [16] Lithium Carbonate - Price data shows changes in lithium - carbonate prices, basis, and warehouse receipts from September 29 to October 13, such as a 450 decrease in the SMM electric - grade lithium carbonate price [16] - Supply: Overseas mines are reluctant to lower prices, and traders are reluctant to sell. Salt plants are less willing to accept high - priced lithium ore [16] - Demand: The pre - holiday inventory - building has almost ended. The spot basis is weak, and most transactions are at a discount [16] - Outlook: The price has high elasticity after supply - side disturbances are realized and strong downward support before such disturbances [16]

Group 1: Report Industry Investment Rating - No industry investment rating information is provided in the report. Group 2: Core Views of the Report - The copper fundamentals show resilience, with downstream开工 rising and weakening scrap substitution. Consider mid - term long positions below 79,000 - 79,500 yuan or selling put options below 78,000 yuan [1]. - For aluminum, the short - term fundamentals are okay, with inventory expected to decline in September. Hold on dips in a low - inventory situation and pay attention to far - month inter - month and internal - external reverse arbitrage [2]. - Zinc prices are moving down in a volatile way. The current internal - weak and external - strong pattern may further differentiate. Hold short positions and partially take profit on internal - external positive arbitrage [6]. - Nickel has weak short - term fundamentals, with high - level production and weak demand. The geopolitical risk in Indonesia has eased, but there are price - supporting policies [7]. - Stainless steel has weak fundamentals. Steel mills are expected to resume production slightly, with mainly rigid demand. The short - term macro - situation follows the anti - involution expectation [7]. - Lead prices rose due to macro factors. Supply is tight, while demand has a slight improvement, but inventory is at a high level. The price is expected to fluctuate greatly in the range of 16,800 - 17,200 yuan next week [9]. - Tin prices are in wide - range fluctuations. The domestic and overseas supply is expected to improve marginally. The short - term fundamentals are weak in both supply and demand. Suggest short - term waiting and light - position short selling above 275,000 yuan/ton [12]. - Industrial silicon is in a tight - balance state in September and October, affected by the resumption rhythm of Southwest and Hesheng. In the long - term, prices are expected to fluctuate at the cycle bottom [16]. - Carbonate lithium prices are moving strongly in a volatile way. With supply - side disturbances and seasonal demand, the price has high elasticity after the supply - side hype and strong downward support before that [18]. Group 3: Summary by Metal Copper - **Price and Market Data**: This week, copper prices fluctuated widely around 80,000 yuan. The downstream开工 rate increased, and the scrap substitution effect weakened. The internal - external positive arbitrage has space [1]. - **Strategy**: Consider mid - term long positions below 79,000 - 79,500 yuan or selling put options below 78,000 yuan [1]. Aluminum - **Price and Market Data**: Aluminum prices declined slightly. The downstream开工 improved, and the inventory is expected to decline in September [1][2]. - **Strategy**: Hold on dips in a low - inventory situation and pay attention to far - month inter - month and internal - external reverse arbitrage [2]. Zinc - **Price and Market Data**: Zinc prices moved down in a volatile way. Supply from overseas mines increased, and domestic demand is seasonally weak. The LME inventory is at a low level [6]. - **Strategy**: Hold short positions and partially take profit on internal - external positive arbitrage [6]. Nickel - **Price and Market Data**: Nickel prices declined slightly. Supply is at a high level, and demand is weak. The geopolitical risk in Indonesia has eased [7]. - **Strategy**: No specific strategy is mentioned other than the analysis of fundamentals [7]. Stainless Steel - **Price and Market Data**: Stainless steel prices were relatively stable. Steel mills are expected to resume production slightly, with mainly rigid demand [7]. - **Strategy**: No specific strategy is mentioned other than the analysis of fundamentals [7]. Lead - **Price and Market Data**: Lead prices rose due to macro factors. Supply is tight, and demand has a slight improvement, but inventory is at a high level [9]. - **Strategy**: The price is expected to fluctuate greatly in the range of 16,800 - 17,200 yuan next week [9]. Tin - **Price and Market Data**: Tin prices fluctuated widely. Domestic and overseas supply is expected to improve marginally, and demand is mainly rigid [12]. - **Strategy**: Suggest short - term waiting and light - position short selling above 275,000 yuan/ton [12]. Industrial Silicon - **Price and Market Data**: Industrial silicon is in a tight - balance state in September and October, affected by the resumption rhythm of Southwest and Hesheng [16]. - **Strategy**: In the long - term, prices are expected to fluctuate at the cycle bottom [16]. Carbonate Lithium - **Price and Market Data**: Carbonate lithium prices are moving strongly in a volatile way. Supply - side disturbances and seasonal demand affect the market [18]. - **Strategy**: The price has high elasticity after the supply - side hype and strong downward support before that [18].

Group 1: Report Summary - Report Title: Nickel and Stainless Steel Daily Review 20250915: Limited Rebound Space [1] - Core Viewpoint: The Fed's increasing expectation of interest - rate cuts drives the rebound of non - ferrous metals, but nickel is restricted by weak fundamentals and inventory reduction pressure, with a limited rebound in nickel prices; stainless steel has a loose fundamental situation but cost - side support, and its price is expected to fluctuate within a range [1] Group 2: Nickel Market Data Futures Market - On September 12, 2025, the closing prices of Shanghai nickel futures' near - month, consecutive - one, consecutive - two, and consecutive - three contracts were 121,800 yuan/ton, 121,980 yuan/ton, 122,160 yuan/ton, and 122,300 yuan/ton respectively, with increases of 1,750 yuan, 1,360 yuan, 1,370 yuan, and 1,350 yuan compared to the previous day [2] - The trading volume of the active Shanghai nickel futures contract was 145,101 lots (+57,563), and the open interest was 72,640 lots (-9,051) [2] Spot Market - The average price of SMM 1 electrolytic nickel was 122,850 yuan/ton, an increase of 1,400 yuan compared to the previous day; the average price of nickel beans was 124,200 yuan/ton, with an increase of 1,350 yuan [2] Inventory - The inventory of Shanghai nickel futures was 22,111 tons; the total inventory of SMM Chinese port nickel ore was 874 (in 10,000 wet tons), a decrease compared to the previous day; the total SMM Shanghai bonded - area nickel inventory was 3,700 tons, a decrease compared to the previous day; the SMM pure nickel social inventory was 39,470 tons, an increase compared to the previous day [2] International Market - On September 12, 2025, the official spot price of LME 3 - month nickel was 15,275 US dollars/ton, the electronic - disk closing price was 15,150 US dollars/ton, and the on - site closing price was 15,150 US dollars/ton; the trading volume was 5,064 lots [2] Group 3: Stainless Steel Market Data Futures Market - On September 12, 2025, the closing prices of Shanghai stainless - steel futures' near - month, consecutive - one, consecutive - two, and consecutive - three contracts were 12,800 yuan/ton, 12,860 yuan/ton, 12,950 yuan/ton, and 12,985 yuan/ton respectively, with increases of 0 yuan, 65 yuan, 80 yuan, and 70 yuan compared to the previous day [2] - The trading volume of the active Shanghai stainless - steel futures contract was 153,413 lots, and the open interest was 126,286 lots (-2,058) [2] Spot Market - The average price of 304/2B coil - trimmed edge (Wuxi) was 13,700 yuan/ton, remaining unchanged compared to the previous day; the average price of 304/No.1 coil (Wuxi) was 12,725 yuan/ton, remaining unchanged [2] Inventory - The inventory of Shanghai stainless - steel futures was 9,6949 tons (-605); the 300 - series social inventory last week was 96,300 tons (-15,400) [2] Group 4: Industry News - On September 12, an Indonesian law - enforcement team seized a 148 - hectare nickel - mining area in Weda Bay and a 172.8 - hectare mining area of PT Tonia Mitra Sejahtera in Southeast Sulawesi Province due to the lack of proper forestry licenses [2] Group 5: Market Logic and Strategies Nickel - **Supply**: Nickel ore prices remained flat, last week's nickel - ore arrival volume decreased, and port inventory increased; nickel - iron plant loss margins narrowed, with increased domestic and Indonesian production in September, and nickel - iron destocking; domestic electrolytic - nickel production increased in September, and export profits expanded [2] - **Demand**: Ternary - material production decreased; stainless - steel plant production increased; alloy and electroplating demand was stable [2] - **Trading Strategy**: It is recommended to wait and see [2] Stainless Steel - **Supply**: Stainless - steel production increased in September [2] - **Demand**: Terminal demand was weak [2] - **Cost**: High - nickel pig - iron prices remained flat, and high - carbon ferrochrome prices rose [2] - **Trading Strategy**: It is recommended to wait and see [2]

Group 1: Report Investment Rating - No information provided on the industry investment rating Group 2: Core Views - Macro aspect: US non - farm employment data was significantly revised downward, with obvious signs of a weakening labor market. Inflation pressure eased, and the market's expectation of a Fed rate cut in September was almost fully priced in, with a more optimistic view on the subsequent rate - cut path. The ECB kept interest rates unchanged for two consecutive periods, and Lagarde sent hawkish signals, indicating that Europe's fight against inflation might be temporarily over, and trade friction risks should be watched out for [3]. - Fundamental aspect: The supply of nickel ore in Indonesia remained abundant. APNI slightly lowered the domestic trade benchmark price of Indonesian nickel ore by 0.75 percentage points, and the spot premium was stable. The price of ferronickel still had an upward trend, but steel mills' purchasing intensity was poor, and the upward process was slow. The pure nickel market was relatively quiet, with downstream buyers purchasing at low prices and strong market wait - and - see sentiment, and there was no obvious improvement in the fundamentals [3]. - Future outlook: With the warm macro - expectations and technical corrections, nickel prices are expected to rise. As the labor market weakens and inflation pressure eases, the market's expectation of a Fed rate cut in September continues to rise. Technically, the main contract has reached the lower limit of the range, showing bullish signals. The industrial side has no obvious driving force, and although there is an expectation of cost loosening, a significant decline is not likely. It is expected that nickel prices will fluctuate upward under the joint drive of macro and technical factors [3][11][12]. Group 3: Summary by Directory 1. Market Data Summary - SHFE nickel price on September 12, 2025, was 121,980 yuan/ton, up 670 yuan/ton from September 5. LME nickel price was 15,391 dollars/ton, up 156 dollars/ton. LME inventory increased by 9,666 tons to 225,084 tons, and SHFE inventory increased by 1,851 tons to 23,529 tons. The premium of Jinchuan nickel increased by 200 yuan/ton, while that of Russian nickel decreased by 100 yuan/ton. The average price of high - nickel pig iron remained unchanged at 961 yuan/nickel point, and stainless steel inventory decreased by 26,400 tons to 834,000 tons [4]. 2. Market Review - **Macro**: On September 9, the US non - farm benchmark correction data showed a significant weakening of the labor market, and inflation pressure eased. The market almost surely expected the Fed to start cutting rates in September, with some expecting a 50 - basis - point cut [5]. - **Nickel ore**: The FOB price of 1.5% laterite nickel ore in the Philippines and Indonesia remained stable. The APNI lowered the domestic trade benchmark price of Indonesian nickel ore by 0.75 percentage points. Nickel iron plants were cautious in purchasing due to cost pressure, and the nickel ore price did not weaken significantly, with the spot premium remaining flat. Attention should be paid to the impact of the RKAB approval in October in Indonesia [6]. - **Pure nickel**: In August, China's refined nickel production was 35,200 tons, a year - on - year increase of 20.55%. The monthly production capacity was about 53,699 tons, and the operating rate increased by 4.92 percentage points. In July, China's refined nickel imports increased significantly by about 703% year - on - year, mainly from Russia and Norway. The export scale in July increased by 1.73% year - on - year. As of September 4, the average monthly export profit of refined nickel had further declined. Overall, the supply of refined nickel was abundant, but the recent price increase of MHP and high - grade nickel matte in Indonesia might limit the further increase in supply [7][8]. - **Ferronickel**: The price of high - nickel pig iron increased from 945.5 yuan/nickel point to 953.5 yuan/nickel point. In August, China's nickel pig iron production was 25,280 metal tons, a month - on - month increase of 11.77%, and Indonesia's production was 137,900 nickel tons, a year - on - year and month - on - month increase of 13.67% and 2.6% respectively. As of August 31, the ferronickel inventory decreased significantly. Although the ferronickel price continued to rise, the high - grade nickel matte price also strengthened, and it was expected that Indonesia's ferronickel production would remain stable month - on - month. In July, China's ferronickel imports increased by 1.83% year - on - year, mainly from Indonesia, and imports from Colombia decreased while those from New Caledonia increased [8]. - **Stainless steel**: In August, the production plan of 300 - series stainless steel in China increased year - on - year and month - on - month. In September, steel mills' production plans increased significantly month - on - month, but the increase in 300 - series stainless steel was limited, and it was difficult to drive a significant increase in ferronickel consumption [9]. - **Nickel sulfate**: The prices of battery - grade and electroplating - grade nickel sulfate increased. In August, the metal output of nickel sulfate decreased year - on - year but increased month - on - month. The production of ternary materials increased both year - on - year and month - on - month. As of September 5, the downstream and upstream inventory days of nickel sulfate remained stable. Overall, the supply and demand of the nickel sulfate market were both strong, but the growth rate of nickel sulfate production was lower than that of ternary materials, and the demand outlook was not optimistic [9]. - **New energy**: From September 1 - 7, the retail sales of new - energy passenger vehicles in China decreased year - on - year and month - on - month. The decline was due to the high sales base in August 2024, the concentrated settlement of pre - ordered orders in early August 2025, and the new subsidy policy focusing more on quality rather than quantity, with limited subsidy amounts and quantities, making it difficult to drive significant consumption growth [9]. - **Inventory**: The current six - location social inventory of pure nickel was 41,055 tons, an increase of 1,125 tons from the previous period. SHFE inventory increased by 1,851 tons to 23,529 tons, and LME nickel inventory increased by 9,666 tons to 205,084 tons. The total inventory of the two major global exchanges increased by 11,517 tons to 248,613 tons [10]. 3. Industry News - Indonesia seized part of the world's largest nickel mine due to violations of forestry license regulations, which was expected to affect the monthly nickel ore output by about 600 metal tons [13]. - The energy and mineral resources department of Indonesia granted an operation license to PT Gag Nikel in Raja Ampat, West Papua [13]. - The Indonesian Nickel Miners Association (APNI) announced the domestic trade benchmark price of nickel ore in September (first phase), which decreased by about 0.75% compared with the reference price in August (second phase) [13]. - First Atlantic Nickel expanded the mineralization zone of natural nickel - iron ore in its Atlantic nickel project in Canada, which is expected to provide a cleaner and more efficient nickel source for the North American market [13]. 4. Related Charts - The report includes charts on the price trends of domestic and foreign nickel, spot premium trends, LME 0 - 3 nickel premium, domestic - to - foreign nickel ratio, nickel futures inventory, nickel ore port inventory, high - nickel iron price, 300 - series stainless steel price, and stainless steel inventory [15][17][19][22]

Core Insights - Ryerson Holding Corporation reported a net income of $1.9 million for Q2 2025, a significant recovery from a net loss of $5.6 million in Q1 2025, indicating improved operational performance amidst challenging market conditions [9][24][29] - The company achieved revenue of $1.17 billion in Q2 2025, reflecting a 3.0% increase from Q1 2025, driven by a slight increase in average selling prices and tons shipped [6][24] - Adjusted EBITDA, excluding LIFO, reached $45.0 million in Q2 2025, up 37.2% from Q1 2025, showcasing effective cost management and operational execution [10][24][29] Financial Highlights - Revenue for Q2 2025 was $1,169.3 million, a decrease of 4.6% year-over-year from $1,225.5 million in Q2 2024 [4] - Tons shipped were 501,000, a slight increase of 0.2% from Q1 2025 but a decrease of 1.4% from Q2 2024 [4] - Average selling price per ton increased to $2,334, up 2.8% from Q1 2025 but down 3.2% year-over-year [4] Gross Margin and Expenses - Gross margin contracted to 17.9% in Q2 2025 from 18.0% in Q1 2025, primarily due to rising costs outpacing price increases [7] - Excluding LIFO, gross margin improved to 19.0%, up 40 basis points from Q1 2025 [7] - Warehousing, delivery, selling, general, and administrative expenses were $203.6 million, a 0.7% increase from Q1 2025, reflecting management's focus on controlling costs [8] Debt and Cash Flow - Total debt increased to $510.2 million, while net debt rose to $479.4 million, reflecting a sequential increase due to operational needs [11] - Cash provided by operating activities was $23.8 million, a recovery from a usage of $41.2 million in Q1 2025, indicating improved cash flow management [11][30] - The company ended Q2 2025 with global liquidity of $485 million, slightly down from $490 million at the end of Q1 2025 [11] Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $0.1875 per share, payable on September 18, 2025, reflecting the company's commitment to returning value to shareholders [12] - During Q2 2025, the total cash return from dividends amounted to approximately $6.0 million [12] Outlook - For Q3 2025, Ryerson anticipates a decrease in customer shipments by 2% to 4% quarter-over-quarter, with expected net sales in the range of $1.14 billion to $1.18 billion [14] - Average selling prices are projected to increase by 1% to 3%, while adjusted EBITDA, excluding LIFO, is expected to be between $40 million and $45 million [14]

Summary of the Conference Call on Steel Industry - July 2025 Industry Overview - The steel industry is currently experiencing a lackluster demand environment in Europe, despite some supportive trade measures and potential increases in defense and infrastructure spending [9][10] - The demand for carbon steel is expected to remain weak, with no clear signs of recovery anticipated in 2025 [9][10] - Stainless steel demand is also expected to lag behind carbon steel due to its later-cycle nature, with no inflection predicted for 2025 [9][10] Key Insights - **Demand Conditions**: Demand conditions in Europe are weak, leading to a continued erosion of EU Hot-Rolled Coil (HRC) spreads, which have fallen below historical averages [9][10] - **Equity Ratings**: Steel equities have seen a sharp re-rating, with shares outpacing fundamentals, particularly for companies like thyssenkrupp and Salzgitter, which diminishes their risk-reward appeal [9][10] - **Preferred Companies**: - **Carbon Steel**: voestalpine is favored due to its resilient EBITDA/t and manageable decarbonization investments [10] - **Stainless Steel**: Acerinox is preferred for its strong earnings profile supported by US exposure and high-margin alloys business [11] Financial Performance - The steel sector is trading at approximately a 34% discount to its historical average on EV/normalized EBITDA, but consensus earnings downgrades for 2025 are anticipated [9][10] - Companies like thyssenkrupp have seen their shares double year-to-date, but the valuation appears stretched with a 20-30% premium to their sum-of-the-parts (SotP) valuation [10] Market Dynamics - **Construction and Automotive Demand**: These sectors are identified as key demand drivers for steel, but current indicators suggest a slowdown in growth [21][22] - **Global Steel Production**: The center of gravity for global steel production is shifting towards Asia, with significant production expected from China [19][27] Trade and Inventory Insights - EU steel imports are heavily influenced by countries like Turkey, South Korea, and China, with specific quotas set for various products [81][87] - Steel inventories across the value chain are being monitored, with US steel inventory indexed to January 2019 showing fluctuations [71] Economic Indicators - The construction confidence indicator in the EU has shown a decline, reflecting lower confidence in the sector [38] - In China, cement production growth has been negative, indicating potential challenges in construction-related steel demand [43] Conclusion - The steel industry is currently in a phase of waiting for a demand inflection, with key indicators suggesting continued weakness in both carbon and stainless steel markets. The focus remains on managing costs and navigating the challenging demand landscape while identifying potential investment opportunities in resilient companies like voestalpine and Acerinox [9][10][11]

Group 1: Report Industry Investment Rating - No information provided Group 2: Core Views of the Report - The domestic macro situation is favorable for non - ferrous metals this week. The copper price has obvious support at the bottom, and attention should be paid to restocking opportunities around 7.6 - 7.7. For aluminum, the short - term fundamentals are acceptable, and attention should be paid to demand and low - inventory arbitrage opportunities. Zinc prices fluctuated upward this week, with short - term suggestions to observe the squeeze - out market and manage positions, and hold long - short positions in different markets. Nickel's short - term fundamentals are average, and attention can be paid to the opportunity of narrowing the nickel - stainless steel price ratio. Stainless steel's fundamentals are weak, and attention should be paid to policy trends. Lead prices declined slightly this week, and it is expected to oscillate between 16800 - 17500 next week. Tin prices fluctuated widely this week, and it is recommended to wait and see in the short term. Industrial silicon's supply is expected to decrease, and the market is expected to shift from inventory accumulation to inventory reduction, with the disk expected to oscillate. Lithium carbonate prices are expected to oscillate, and the downward inflection point requires significant inventory accumulation of warehouse receipts and spot goods [1][2][3][6][9][12][14] Group 3: Summary by Metal Copper - **Market Data**: From July 17 - 23, the spot premium changed from 110 to 180, the waste - refined copper price difference decreased by 10, the SHFE inventory remained unchanged at 84556, and the SHFE warehouse receipts decreased by 9972. The spot import profit decreased by 340.21, and the March import profit decreased by 117.79 [1] - **Market Analysis**: Domestic macro is favorable. The waste - refined price difference has shrunk significantly, the scrap substitution effect is prominent, and the refined copper rod start - up rate has rebounded. The spot import window opened this week, and attention should be paid to the opportunity of long - position import logistics in the third and fourth quarters [1] Aluminum - **Market Data**: From July 17 - 23, the Shanghai aluminum ingot price decreased by 100, the domestic alumina price increased by 8, and the SHFE social inventory data is incomplete. The aluminum LME inventory increased by 6350, and the LME cancelled warehouse receipts decreased by 100 [1] - **Market Analysis**: Supply has increased slightly, and demand is expected to weaken seasonally in July. The supply and demand are expected to be balanced in July, and attention should be paid to far - month inter - month and internal - external reverse arbitrage opportunities under the low - inventory pattern [1] Zinc - **Market Data**: From July 17 - 23, the spot premium decreased by 20, the Shanghai zinc ingot price increased by 40, and the zinc social inventory remained unchanged. The SHFE zinc exchange inventory remained unchanged, the LME zinc inventory decreased by 1275, and the LME zinc cancelled warehouse receipts decreased by 1275 [2] - **Market Analysis**: Zinc prices fluctuated upward this week. Supply is expected to increase, demand is seasonally weak, domestic social inventory is rising, and overseas LME inventory is decreasing. There is a risk of short - squeeze in lead and zinc [2] Nickel - **Market Data**: From July 17 - 23, the price of 1.5 - grade Philippine nickel ore remained unchanged, the Shanghai nickel spot price increased by 550, and the spot import return increased by 794.56. The LME nickel inventory decreased by 2220, and the LME cancelled warehouse receipts decreased by 630 [3] - **Market Analysis**: Pure nickel production remains high, demand is weak, and both domestic and overseas nickel plate inventories have increased slightly. Attention can be paid to the opportunity of narrowing the nickel - stainless steel price ratio [3] Stainless Steel - **Market Data**: From July 17 - 23, the price of 304 cold - rolled coil increased by 100, and the price of waste stainless steel increased by 50 [3] - **Market Analysis**: Supply has decreased due to some passive production cuts by steel mills. Demand is mainly for rigid needs, and the inventory in Xijiao and Foshan has decreased slightly. The fundamentals are weak, and attention should be paid to policy trends [3] Lead - **Market Data**: From July 17 - 23, the spot premium increased by 5, the social inventory data is incomplete, and the SHFE inventory remained unchanged. The LME lead inventory increased by 650, and the LME cancelled warehouse receipts decreased by 3000 [6] - **Market Analysis**: Lead prices declined slightly this week. Supply is expected to increase slightly, demand has improved, but inventory accumulation is still expected. It is expected to oscillate between 16800 - 17500 next week [6] Tin - **Market Data**: From July 17 - 23, the spot import return decreased by 5532.31, the spot export return increased by 4474.88, and the LME tin inventory decreased by 25. The LME cancelled warehouse receipts increased by 200 [9] - **Market Analysis**: Tin prices fluctuated widely this week. Supply may decline slightly in July - August, demand is weak, and domestic inventory is rising. It is recommended to wait and see in the short term [9] Industrial Silicon - **Market Data**: From July 17 - 23, the 421 Yunnan basis increased by 430, the 421 Sichuan basis increased by 430, and the warehouse receipt quantity increased by 53 [12] - **Market Analysis**: The start - up rate of leading enterprises has decreased, and the supply is expected to decrease. The market is expected to shift from inventory accumulation to inventory reduction, and the disk is expected to oscillate [12] Lithium Carbonate - **Market Data**: From July 17 - 23, the SMM electric carbon price increased by 1350, the SMM industrial carbon price increased by 1350, and the warehouse receipt quantity increased by 665 [14] - **Market Analysis**: Lithium carbonate futures prices have risen. The supply and demand are both strong in the short term, and the inventory pressure in the intermediate link is increasing. The price is expected to oscillate, and the downward inflection point requires significant inventory accumulation of warehouse receipts and spot goods [14]