HK Stock Market Move | Steel stocks continue to be strong in the near term. The Ministry of Industry and Information Technology previously released new industry standard conditions for the steel industry, leading to market expectations of industry production restrictions being implemented.

Steel stocks continued their recent strong performance, as of the time of writing, CHINAVTM MINING(00893) rose by 9.62% to 0.057 Hong Kong dollars; Maanshan Iron & Steel(00323) rose by 7.85% to 2.06 Hong Kong dollars; Angang Steel(00347) rose by 7.02% to 1.83 Hong Kong dollars; CHONGQING IRON(01053) rose by 6.74% to 0.95 Hong Kong dollars. On the news front, the Ministry of Industry and Information Technology recently released the new version of the "Steel Industry Standard Conditions (2025 Edition)". EB SECURITIES pointed out that the standard conditions evaluate steel enterprises as "standard enterprises" and "leading standard enterprises", and suggested paying close attention to industry supply-side policies and their impacts. China Securities Co.,Ltd. stated that this document is a guiding document, and anticipates that more specific supporting policies will be introduced in the future. Changjiang pointed out that the most concerning issue in the market currently is whether production restrictions will be implemented, and whether the rise in steel stocks can continue. They believe that these two issues may not necessarily be directly related. The current round of supply-side reform may reflect a "hierarchical management, support superior and eliminate inferior, increase and decrease, maintain and pressure" approach, which may require a more detailed process and time. Therefore, even if production restrictions are implemented in the short term, the intensity may not be comparable to the "across-the-board" model in 2016. The core of the current upward trend in steel stocks still lies in the fundamentals and valuation of steel stocks being at a double bottom, with the supply-side reform expectations only providing catalyzing effect on the upward momentum.