I. Macro Policy & Market Sentiment: Multiple Positive Factors Resonate, Cost Support Strengthens

Last week, the policy front brought continuous warm winds. The "anti-involution" competition rectification guidance was once again mentioned during meetings. The National Development and Reform Commission issued a document promoting the clean and efficient utilization of coal. Meanwhile, multiple departments intensive signaled efforts to boost consumption and cultivate new growth drivers. Against this backdrop, coking coal prices rebounded sharply from the bottom, and iron ore prices remained strong, directly driving the rebound in finished steel prices. After rebounding to near resistance levels, finished steel prices shifted into a consolidation pattern. Currently, steel prices find solid support from the cost side below, but face dual suppression above from seasonally weakening demand and potential tightening of steel export expectations. In the near term, prices are expected to maintain range-bound fluctuations. The main trading range for the rebar steel main contract 2605 is likely between 2,900-3,300 RMB/ton, and for the HRC main contract 2605, between 3,000-3,400 RMB/ton.

II. Finished Steel Market: Weak-Stable Supply-Demand, Limited Upside and Downside

This week, the supply-demand pattern for rebar showed weak-stable operation. Supply continued to recover but with limited increases, remaining at relatively low levels, providing some support to steel prices. However, expectations for subsequent production restarts persist, warranting attention to the pace of supply changes. Concurrently, rebar demand performance remained weak, with high-frequency demand indicators retreating and still sitting at multi-year lows for the same period. Downstream industries have yet to show significant improvement, and demand is expected to weaken seasonally, continuing to pressure steel prices. Overall, rebar supply is recovering from lows while demand marginally weakens, indicating a relatively weak fundamental picture. Steel prices face downward pressure during the off-season. Relatively positive factors mainly stem from policy expectations and cost support. Subsequent trends may continue the pattern of low-level fluctuations, with key focus needed on changes in the pace of mill production.

III. Raw Material Market: Inventory Structure Awaits Improvement, Cost Support Remains

In the raw material market, large-scale winter stocking restocking has yet to begin, and the inventory structure for coking coal continues to deteriorate. On the import side, Mongolian coal saw maximum daily customs clearance vehicles exceed 1,700 this week, putting significant pressure on port supervision area inventories. The Australian coal price index showed steady increases with a slight uptick, leading to a severe inversion of domestic and international price spreads. The import window for seaborne coal has narrowed, and subsequent coking coal arrivals may decline. Downstream, the third round of coke price cuts has been fully implemented, pushing some coke enterprises into slight losses. This week, coking plant operating rates remained largely stable with little change in supply. Blast furnace hot metal production stabilized;Subsequent need to observe downstream restart flexibility downstream restart flexibility. If steel mill production resumption accelerates, the supply-demand structure for coke could potentially improve. Looking ahead, with the approach of end-user winter stocking, the coking coal inventory structure is expected to gradually improve. The current degree of coking coal oversupply is not severe compared to previous years.

IV. Market Outlook: Macro Sentiment Warming, Phased Building of Medium-to-Long Term Inventory Considered

Currently, the impact of external environmental changes is deepening. Global economic growth momentum is insufficient, trade barriers are increasing, and the performance of major economies is showing divergence. Inflation trends and monetary policy adjustments carry uncertainties. China's economy is operating generally stable with progress, achieving new results in high-quality development. However, it still faces prominent contradictions such as supply exceeding demand. Monetary policy will continue to implement a moderately accommodative stance, strengthening counter-cyclical and cross-cyclical adjustments, better leveraging both aggregate and structural functions, and enhancing monetary-fiscal policy coordination to promote stable economic growth and reasonable price recovery.

In summary, against the backdrop of relatively minor domestic supply-demand contradictions, gradually warming macro sentiment, and continuously strengthening cost support, consideration can be given to phasing in medium-to-long term inventory positions, controlling position size at around 20-30%. The overall market trend next week is expected to be slightly stronger, but vigilance is needed regarding profit-taking pressure after potential price rallies.