Our judgment on the follow-up policy of energy-saving power cuts: For provinces such as Hebei, Shanxi, and Jiangsu that have introduced stricter production restriction policies, their policies will be continued during the year to ensure that the iron and steel industry's output reduction target is finally completed successfully; judging from the national level, at present, The supply contraction force still has a distance from our estimation target. However, taking into account the constraints of the two goals of structural adjustment and growth protection, we believe that the storm of restricted production will continue but the implementation in other provinces is difficult to achieve the level of Hebei Province.

Keeping track of indicators: daily average production of crude steel. 1.6 million tons is a warning line, beyond which it will trigger a policy rebound. The 1.54 million tons is the ideal level to fully realize the "Eleventh Five-Year" goal.

Domestic steel prices: Normal adjustment after skyrocketing. Following the increase in steel prices last week, domestic steel market prices fell rapidly this week. Although the curtailment of electricity restriction production began to spread throughout the country, the real supply is gradually reduced, because the change in production will not be immediately transmitted to the market. In fact, this is mainly expected to be at work. At the same time, everyone believes that the restriction of power production restrictions is likely to be temporary and difficult to last. Due to the rapid growth, end-users have yet to fully accept it, and due to the formation of profitable space for market resources, some businesses are eager to get rid of it, and continued rises have resulted in fewer purchases and poor transactions. Coupled with the pessimistic expectation of the government's data and the impact of news of the drop in the price of imported ore mines, the stock market and the market's dive will make steel prices fall after a surge.

International steel prices: steadily upward. This week, the international steel market remained stable. The CRU International Steel Price Index stood at 180.5, unchanged from last week. The European market remained stable, demand recovered less than expected, and steel prices were basically stable. The U.S. market was basically stable, and some of the prices of thin plates declined slightly. The Asian market is mixed and the price increase of Baosteel may drive other Asian steel mills to follow the price increase. In the short term, the international market will operate smoothly.

Iron and steel raw materials: Energy-saving and production-restricted production has a significant impact on the raw material market. This week, the overall iron ore market at home and abroad showed a declining trend. The market volume was light, and there was strong sentiment between the supply and demand sides. Affected by energy conservation and emission reduction, steel mills' production cuts and production stoppages continued. Steel mills that did not cut production were bearish on the downstream market, and purchases were not positive. The raw material market will continue to weaken as steel mills do not resume production.

Gross profit tracking: Long-term product profitability continues to lead. With the spike in the price of steel this week, the gross profit of each steel product fell again. Overall, the long products that are still leading the way are currently the best. Hot-rolled and medium-sized boards are still at the edge of profit and loss. Threads and cold-rolled steels continue to perform better than mid-plate and hot-rolled steels.

Inventory: The overall decline still remains. Iron and steel stocks declined significantly this week, with the exception of hot-rolled varieties, where the rest fell. Total social inventory decreased by about 90,000 tons week-on-month, and existing social inventory was about 14.49 million tons.