CITIC Construction Investment Futures: Black Series Morning Report for March 30

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Steel Morning Report: Industry Pattern Weak and Stable, Futures Steel Fluctuating

Market Information:

1. On March 27, the U.S. and Israel launched airstrikes on the Khuzestan Steel Plant and Isfahan Mubarak Steel Plant in Iran, and the power plant supporting the Mubarak Steel Plant was also attacked. It is expected that a rigid supply gap of 5-5.5 million tons per year will form in the short term, with the most prominent gaps in the three major categories: plate, steel billet, and long products.

2. Passenger Car Association: From March 1-22, national retail sales of passenger cars amounted to 920,000 units, a year-on-year decrease of 16% compared to the same period last year, but an increase of 19% compared to the previous month; cumulative retail sales for the year reached 3.498 million units, a year-on-year decrease of 18%.

3. According to the latest production data released by AVC, domestic air conditioning total production in April 2026 is expected to decline by 9.4% year-on-year, with domestic sales production down by 6.8% year-on-year, and exports also declining by 12.6% year-on-year due to multiple factors.

4. Ministry of Transport: In January and February, fixed asset investment in road and waterway transportation in China was 272.928 billion yuan, a year-on-year decrease of 3.1%.

5. On March 27, national main ports transacted 665,000 tons of iron ore, a month-on-month decrease of 3.6%; 237 major trading companies transacted 94,400 tons of construction steel, a month-on-month increase of 5.9%.

6. Last week, 247 steel mills had a blast furnace operating rate of 81.03%, an increase of 1.25 percentage points month-on-month; the profit margin of steel mills was 43.29%, an increase of 0.87 percentage points month-on-month; daily pig iron production was 2.3109 million tons, an increase of 29,400 tons month-on-month.

7. Last week, the supply of five major steel varieties was 8.3958 million tons, slightly down week-on-week; total inventory decreased, with construction materials reducing inventory by 358,200 tons and plates reducing inventory by 125,700 tons; weekly consumption was 8.8797 million tons, with construction materials consumption increasing by 8.4% month-on-month and plate consumption decreasing by 0.9%.

(Chu Xinli, Futures Trading Consulting Professional Information: Z0018419, for reference only)

Rebar:

In terms of industry data, last week, rebar production decreased by 54,600 tons to 1.9787 million tons, factory inventory decreased by 170,400 tons, and social inventory decreased by 104,600 tons to 6.4275 million tons. Currently, rebar demand continues to improve, supply is weak and stable, and the fundamentals have seasonally improved. With the arrival of the traditional peak steel consumption season of “Golden March and Silver April,” the market still has certain expectations for future steel demand. On the cost side, raw materials such as iron ore and coking coal have retraced, weakening the cost support for steel, and it is expected that construction steel prices will continue to fluctuate.

(Chu Xinli, Futures Trading Consulting Professional Information: Z0018419, for reference only)

Hot Roll:

Last week, hot roll production rebounded by 54,000 tons to 3.0561 million tons, total inventory decreased by 80,200 tons to 4.5327 million tons, and apparent demand increased by 31,200 tons to 3.1363 million tons. Currently, hot roll demand is recovering well, with improvements in both supply and demand. On the cost side, raw materials such as iron ore and coking coal have retraced, weakening the cost support for steel, and it is expected that hot roll prices will continue to fluctuate.

In terms of strategy, attention should be paid to the 3100-3200 range for the rebar 2605 and 2610 contracts, and the 3250-3350 range for the hot roll 2605 and 2610 contracts.

(Chu Xinli, Futures Trading Consulting Professional Information: Z0018419, for reference only)

Alloy: Production Increase Not Smooth

Viewpoint: Neutral

Significant increases on the cost side have led to a decline in factory production profits, dampening production enthusiasm. This week, alloy enterprises have reduced production. Silicon-manganese enterprises may reduce production in coordination to alleviate the pressure of manganese ore prices on profits, but tariffs and shipping costs on manganese ore also provide strong support for prices, so the space for cost reduction may be limited. High prices still stimulate high inventory enterprises, and alloy companies continue to have selling protection behavior. On the demand side, downstream acceptance of high prices is limited, but steel mills are entering a resumption period, and consumption demand is gradually improving. Overall, the supply and demand fundamentals still limit alloys from maintaining a high-level fluctuation pattern. In the short term, the support for silicon iron May contract is 5700-5750 yuan/ton, and the support for silicon manganese May contract is 6050-6150 yuan/ton.

Viewpoint: Continue to hold bullish options at the highest level.

(Zhang Shaoda, Futures Trading Consulting Professional Information: Z0017566, for reference only)

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Editor: Li Tiemin