HK Stock Market Move | Steel stocks lead the decline with crude steel production in 2025 down by 4.4% year-on-year, highlighting the persistent industry supply-demand imbalance.

Steel stocks lead the decline, as of the time of publication, CHINA HANKING (03788) fell by 10%, to 4.32 Hong Kong dollars; Angang Steel (00347) fell by 5.58%, to 2.03 Hong Kong dollars; CHONGQING IRON (01053) fell by 4.55%, to 1.26 Hong Kong dollars; MAANSHAN IRON (00323) fell by 4.24%, to 2.71 Hong Kong dollars. On the news front, data released by the National Bureau of Statistics on January 19th showed that in 2025, China's crude steel output was 960 million tons, a year-on-year decrease of 4.4%, breaking through the 1 billion ton mark for the first time in six years. The market expects the national equivalent crude steel apparent consumption in 2025 to be 826 million tons (excluding billets), a year-on-year decrease of 7.1%, with a continued prominent supply-demand imbalance. Guotai Haitong released a research report stating that with the decline in real estate, the proportion of steel demand from the real estate sector continues to decrease, and we expect the negative drag effect of real estate on steel demand to have significantly weakened. Demand from infrastructure and manufacturing sectors is expected to grow steadily. From the supply side, currently about 60% of steel enterprises are still operating at a loss, and market-driven supply clearance has begun to appear. We maintain the expectation of a contraction in the supply side, and the fundamentals of the steel industry are expected to gradually improve.