20241021-华宝证券-钢铁行业周度报告_本周钢材供给端保持扩张节奏_消费环比增加2.03__9页_760kb

Summary of the Steel Industry Weekly Report

Steel Market Supply:
The supply side continued to expand in the week ending October 18, with a marked increase in infrastructure materials. The average daily iron water output reached 234.36 million tons for the week, an increase of 1.28 million tons (+0.55% weekly), representing a seventh consecutive weekly growth. Additionally, listed building materials saw a production increase of 33.1%, signaling high production activity, primarily driven by policy support and consumption recovery.

Inventory Levels:
In the same period, overall steel inventory continued a downward trend, with social inventory falling by 4.2% (-87.6 million tons), contributing to lower inventory levels. Specifically, long products saw larger year-over-year and month-over-month inventory declines, whereas plate and coil products experienced intelligent inventory adjustments.

Demand and Economics:
Aggregate demand for heavy construction materials saw a significant rebound in this period (+203%) on the week, while the consumption of building materials remained robust. Iron ore imports added 5.5% to inventory, and policy catalysts (like local fiscal intervention) are expected to support demand.

Prices and Profitability:
Price index slightly decreased by 1.79 points over the week, remaining below pre-policy levels. However, profitability for steel producers (74.46%, based on 247 surveyed firms) remained strong, sustaining a limit of 70% in operating profit. Despite moderate price pressure, the market is expected to enter a short-term recovery trajectory.

Policy Impacts:
Recent government intervention through tax policies, social financing increases (e.g., 4 trillion CNY credit increase for housing improvement), and infrastructure development are driving short-term rebounds. A sustained trend of profitability, policy stimulus, and declining excess inventory support steel fundamentals.

Investment Outlook:
Short-term growth is anticipated due to ongoing policies. However, the medium-term transition remains subject to macroeconomic shifts and existing uncertainties like downstream demand and the spread of production capacity limitations.

Key Risks:
The potential for self-produced steel rising quickly could lead to falling prices. Policy effectiveness and overall economic conditions are key vulnerabilities.