CITIC Construction Investment's Steel 2026 Investment Strategy Outlook: Industry mixed with joys and sorrows, special steel welcomes development opportunities.

CITIC Securities Investment released the steel investment strategy outlook for 2026: in recent years, there have been many policies focusing on controlling the total amount of crude steel, but the effect is not as obvious as in 2021. The industry is gradually becoming more intense, and preventing intensification and improving prices is still an important task for next year. It is predicted that the iron ore market will be relatively oversupplied in 2026, with an expected average price of $90 per ton, a decrease of about 12% from 2025, bringing about a profit improvement of about 130 yuan per ton of steel. Assuming a production reduction of 40 million tons next year, the annual crude steel production will be 945 million tons, industry profits will be restored, and the gross profit per ton is expected to recover to around 300 yuan. Assuming a production reduction of 25 million tons next year, the annual crude steel production will be 960 million tons, and the gross profit per ton is expected to be maintained at an average of 100 yuan. Assuming a production reduction of 10 million tons next year, with the expected decline in real estate and exports, there will be an oversupply situation, industry profits will deteriorate, intensifying internal competition, industry operations will continue to be difficult, and industry opportunities will be more from the field of electrical equipment materials, with related special steels continuing to see development.