According to Zhitong Finance APP, Guosheng Securities Inc. released a research report stating that steel output increased month-on-month in mid-September, and the steel industry has entered a new phase of "energy saving and carbon reduction in parallel." Going forward, expectations for supply-side regulation and transformation and upgrading remain, and combined with the improving demand trend, the medium- to long-term fundamentals of steel products are expected to continue to improve.

From a medium- to long-term value perspective, investors can pay attention to high-quality steel enterprises such as Baoshan Iron & Steel Co., Ltd. (600019.SH), Nanjing Iron & Steel Co., Ltd. (600282.SH), Hunan Valin Steel Co., Ltd. (000932.SZ), Fangda Special Steel Technology Co., Ltd. (600507.SH), and Xinyu Iron & Steel Co., Ltd. (600782.SH); Zhejiang Jiuli Hi-Tech Metals Co., Ltd., which benefits from the prosperity cycle of oil and gas and nuclear power; Xinxing Ductile Iron Pipes Co., Ltd. (000778.SZ), which benefits from pipeline network renovation and the earnings elasticity of ordinary steel; Jiangsu Changbao Steel Tube Co., Ltd. (002478.SZ), which benefits from new coal power construction and the oil and gas prosperity cycle; and Zhejiang Yongjin Metal Technology Co., Ltd. (603995.SH), which benefits from demand recovery and its nickel-plated steel shell business.

Investment strategy: U.S. Treasury yields continue to climb, asset prices face further pressure, and it will be difficult for the market to show a trend-driven performance in the near term. The U.S. fiscal deficit has remained high for a long time, causing a sharp increase in the supply of U.S. Treasuries. To make matters worse, U.S. companies also have demands to further expand AI financing needs, which diverts funds while further pushing up U.S. Treasury yields. Therefore, regardless of whether the Federal Reserve raises interest rates later, medium- to long-term U.S. Treasury yields are expected to remain in a situation where they are easy to rise and difficult to fall in the future. Against the backdrop of the United States stepping up absorption of global liquidity, the Chinese government has strengthened cross-border capital flow controls and promoted the long-term stable appreciation of the renminbi to hedge the impact of widening domestic and external interest rate spreads and ease pressure on the domestic market. However, the overall lack of incremental funds has also kept the market in a state of fluctuation recently. Maintaining high U.S. interest rates will also make its own fiscal pressure increasingly heavy. Recent Fed rate hikes are favorable for rebuilding the Fed's credibility. But under fiscal pressure, the bank believes that maintaining so-called independence may be a luxury for the Fed in the future. In the trade-off between fiscal policy and inflation, most central banks will ultimately submit to fiscal policy, and fiscal dominance is likely to be the final outcome. A new round of fiscal deficit monetization may be gradually approaching. The long-term logic for gold remains solid. Regarding industrial metal demand, it is necessary to observe the progress of future fiscal expenditure in providing support. Earlier, replacement value was used to measure leading companies in the steel industry, and their absolute valuation levels are currently low.

The main views of Guosheng Securities Inc. are as follows: Hot metal output declined, and the decline in inventories widened. This week, the national blast furnace capacity utilization rate fell. The blast furnace capacity utilization rate of 247 domestic steel mills was 88.5%, down 0.8 percentage points month-on-month and down 1.9 percentage points year-on-year; weekly output of the five major steel categories was 7.797 million tons, down 1.8% month-on-month and down 9.9% year-on-year; this week, hot metal output declined, with average daily hot metal output decreasing by 20,000 tons to 2.357 million tons, and weekly steel output fell, with the decline in rebar output greater than that of hot-rolled coil output; in terms of inventories, this week's weekly social inventory of the five major steel categories was 10.992 million tons, down 4.1% month-on-month and up 0.9% year-on-year, while mill inventory was 3.828 million tons, down 2.2% month-on-month and down 9.2% year-on-year; total steel inventory fell 3.6% week-on-week, with the decline widening by 2.5 percentage points from last week, as both mill inventory and social inventory declined; based on output and total inventory data, this week's apparent weekly consumption of the five major steel categories was 8.354 million tons, up 3.0% month-on-month and down 4.4% year-on-year, among which apparent consumption of rebar was 2.089 million tons, up 10.1% month-on-month and down 5.3% year-on-year. This week, apparent demand for the five major steel categories improved, rebar apparent demand rose sharply, and hot-rolled coil apparent demand improved slightly. The weekly average transaction volume of construction steel was 98,000 tons, up 3.2% month-on-month; this week, spot steel prices were basically flat versus last week, immediate gross profit for mainstream steel categories changed little, and the profitability ratio of 247 steel mills was 6.9%, down 0.8 percentage points month-on-month.

Steel output increased month-on-month in mid-September, and the steel industry has entered a new phase of "energy saving and carbon reduction in parallel." In mid-September 2026, key steel enterprises tracked by the China Iron and Steel Association produced an average of 1.855 million tons of steel per day, up 3.4% month-on-month. Based on this, it is estimated that nationwide daily steel output in mid-September was 3.74 million tons, up 1.7% month-on-month. Recently, the Ministry of Industry and Information Technology officially issued the "15th Five-Year Plan for Green and Low-Carbon Industrial Development," which clearly requires that carbon dioxide emissions in the industrial sector reach a peak by 2030. Unlike the past, the plan is no longer just a directional call, but directly provides clear quantitative indicators, specific institutional arrangements, and a definite implementation path. Going forward, expectations for supply-side regulation and transformation and upgrading in the industry remain, and combined with the improving demand trend, the medium- to long-term fundamentals of steel products are expected to continue to improve.

Steel pipe enterprises continue to benefit from expectations of increased coal power installed capacity and oil and gas prosperity. According to Wind data, from January to July 2026, completed domestic thermal power investment was 116.06 billion yuan, up 1.2% year-on-year, and completed nuclear power investment was 77.33 billion yuan, up 6.7% year-on-year. Against the current backdrop of energy self-control and accelerated planning and construction of a new energy system, relevant targets in coal power and nuclear power unit construction are expected to benefit significantly; in addition, relevant targets in oil and gas extraction and transportation pipelines are expected to benefit from the oil and gas industry prosperity cycle.

Risk warning: Domestic output regulation policies exceeding expectations, downstream demand falling short of expectations, raw material prices rising more than expected, and geopolitical risks.