HK Stock Market Move | Steel stocks collectively rise, with an expected increase in safety inspections at steel mills. Institutions suggest that this may further lead to temporary production cuts.

Steel stocks collectively rose, as of press time, CHINA ORIENTAL (00581) rose by 5.97% to 1.42 Hong Kong dollars; CHINA HANKING (03788) rose by 5.61% to 5.27 Hong Kong dollars; IRC (01029) rose by 1.92% to 0.53 Hong Kong dollars; CHONGQING IRON (01053) rose by 1.64% to 1.24 Hong Kong dollars. On the news front, on January 18, there was a safety accident at Baosteel's plate mill. Cinda believes that the safety accident at Baosteel may trigger safety checks at steel mills, further leading to temporary production cuts, special inspections, or slight contraction in local production capacity to provide cost and supply support. Currently, the profit per ton of general steel is considerable, and under the background of the industry "anti-curling", there is a large room for improvement in the performance of general steel companies, which are expected to see value restoration. The steel sector is also expected to see a good opportunity for allocation. Guotai Haitong released a research report stating that steel demand is expected to gradually bottom out; even without considering supply policies, the industry has been in a period of slight profit for a long time, and market-oriented clearance of supply has begun. We expect the fundamentals of the steel industry to gradually improve. If supply policies are implemented, the speed of supply contraction in the industry will be faster, and the progress of industry recovery will be faster.