According to the Zhixun Finance APP, Xingye Securities released research reports, stating that with the emotional release of dumping last week, rebar steel has shown a "low production + low inventory" structure. The rebar steel inventory surveyed by Mysteel has also received some restoration. With a small contradiction between supply and demand, the downward trend of steel prices is slowing down. As for iron ore, the price of ore has rebounded significantly with the recovery of finished product demand, approaching the $100 mark at one point. However, the overall loss area of steel plants is still large at present. Although there has been some improvement in demand, downstream willingness to receive goods remains cautious. The pressure brought by the rebound in ore prices may still restrain the rebound height of iron ore. As the end of August approaches, whether the demand can improve in the later period under the background of obvious production reduction in steel plants will be the key to whether the steel price can stop falling and rebound.

With some recovery in demand, steel prices are oscillating to find a bottom.

With the emotional release of dumping last week, rebar steel has shown a "low production + low inventory" structure. The rebar steel inventory surveyed by Mysteel has also received some restoration. With a small contradiction between supply and demand, the downward trend of steel prices is slowing down. In addition, the previous "low production + high inventory + low demand" structure of hot-rolled steel has improved in this period, corresponding to a demand of 3.186 million tonnes, an increase of 0.304 million tonnes from the previous period, showing a significant improvement in demand. Furthermore, the social inventory of hot-rolled steel continues to deplete, albeit to a small extent. If the trend of depleting inventory continues in the future, the contradiction between supply and demand may be alleviated, and the previous pessimistic sentiment in the steel market may gradually dissipate.

As for iron ore, the price of ore has rebounded significantly with the recovery of finished product demand, once approaching the $100 mark. However, the overall loss area of steel plants is still large at present. Although there has been some improvement in demand, downstream willingness to receive goods remains cautious. The pressure brought by the rebound in ore prices may still restrain the rebound height of iron ore. It is expected that the short-term ore price will continue to fluctuate. In the short term, bearish factors such as the slowdown in downstream production, slow progress in project funding, and weak market willingness to receive goods have been adequately reflected.

As the end of August approaches, whether the demand can improve in the later period under the background of obvious production reduction in steel plants will be the key to whether the steel price can stop falling and rebound. As for the steel sector, considering that the industry's profitability is already at the bottom, it is recommended to focus on companies in the plate category with better demand performance, especially those that have been continuously committed to product structure upgrades in recent years. These companies exhibit relatively stable profits per ton of steel and substantial excess returns. It is suggested to pay attention to Baoshan Iron & Steel, Nanjing Iron & Steel, Hunan Valin Steel, etc. Additionally, as copper prices are still in an uptrend, it is advisable to focus on the dual-core targets of HBIS Resources, consisting of iron ore and copper mines. With the increase in copper mine production and the rise in copper prices, the company still has room for recovery in the future.

(1) Iron ore: The global iron ore shipment volume was 30.69 million tons, up 500,000 tons from the previous month. The daily iron production volume was 2.317 million tons, down 0.0492 million tons from the previous month. Fundamentally, iron ore supply is strong and demand is weak for this period, with global iron ore shipments increasing. Affected by the previous shipping volume, the amount of iron ore arriving at the port has increased significantly, and port clearance remains relatively stable, with a small trend of reducing the stock. On the demand side, the iron production volume has decreased significantly. During the off-season demand period, under the situation of heavy selling of old standard rebar and a significant decrease in demand, it is difficult for the iron production volume to rebound, and the iron ore short term may still be in a consolidation and fluctuation pattern. (2) Coke: This period, coke prices are weak. Currently, the growth space for iron production volume is relatively limited. Considering that it is difficult for terminal market demand to strengthen in the future, coke prices are expected to maintain a relatively stable trend.

(1) Iron ore: The global iron ore shipments were 31.661 million tons, a week-on-week increase of 2.014 million tons. The daily average iron production was 2.2446 million tons, a week-on-week decrease of 0.0431 million tons. Fundamentally, the supply and demand for iron ore in this period were weak, and the market expected a mismatch in the supply and demand for rebar at the beginning of the week. The overall rebound in the black commodity sector, but due to the overall weak demand in the terminal market, the iron production further declined, putting pressure on raw material demand. As a result, the iron ore price saw a slight correction. Considering the weak terminal demand, it is expected that the iron production will still be under pressure, and the iron ore market may experience short-term volatility.

(2) Coke: The coke price in this period was relatively weak. Currently, there is limited room for growth in iron production, and it is difficult to anticipate a strong follow-up demand in the terminal market. Therefore, the coke price is expected to remain weak.

Key data tracking for the sector

Demand recovery: The average trading volume of construction steel in the country during this period (8.19-8.23, the same below) was 0.122 million tons, a week-on-week increase of 0.027 million tons. According to Mysteel data, the apparent consumption of rebar was 1.9934 million tons, a week-on-week increase of 0.0338 million tons; the apparent consumption of hot-rolled coil was 3.186 million tons, a week-on-week increase of 0.304 million tons.

Supply decrease: The national blast furnace operating rate (247 units) this week was 77.47%, a week-on-week decrease of 1.37 percentage points. The total weekly output of the five major varieties in the country was 7.7894 million tons, a week-on-week increase of 0.0096 million tons.

Weak profitability: This week, the gross profit per ton of hot-rolled coil was -209 yuan, a decrease of 1 yuan compared to the previous week; the gross profit per ton of cold-rolled coil was -399 yuan, an increase of 45 yuan; the gross profit per ton of rebar was -57 yuan, an increase of 32 yuan; and the gross profit per ton of medium and thick plate was -325 yuan, a decrease of 28 yuan.

Risk warning: The recovery of terminal demand falls short of expectations, and raw material prices fluctuate significantly.