HK Stock Market Move | Steel stocks lead the way in gains, market focusing on new round of supply-side reforms in the steel industry. Industry profits are expected to expand in stages after the policies are put into effect.

Steel stocks led the gains, as of the press release, CHINA ORIENTAL (00581) rose by 7.75% to 1.39 Hong Kong dollars; Angang Steel (00347) rose by 4.79% to 1.97 Hong Kong dollars; CHONGQING IRON (01053) rose by 4.35% to 0.96 Hong Kong dollars; MAANSHAN IRON (00323) rose by 4.08% to 2.04 Hong Kong dollars. On the news front, the Ministry of Industry and Information Technology (MIIT) recently released the new version of "Norms for the Steel Industry (2025 Edition)". Zhonghui Futures commented on recent production cut rumors, stating that the production cuts will help steel companies further transform and upgrade. Donghai Futures predicts that once the policy is implemented, the most direct impact will be the temporary expansion of industry profits, but the path of expansion may be different from before, and the magnitude of expansion may be lower than the previous round of policies, estimated to be between 300-400 yuan per ton. Huatai believes that the steel industry in 2025 may start a new round of supply-side optimization cycle. Looking back at the previous two rounds of supply-side optimization, before they were initiated, the industry's prosperity levels all showed clear downward trends, and government agencies continuously emphasized the necessity of production control at various meetings. From 2022 to 2024, the supply-demand situation in the steel industry continued to weaken; since 2024, various parties have actively advocated for strict control of steel production, to prevent vicious competition and the "internal rotation" phenomenon. The national level is also beginning to consider a new round of supply-side optimization.