Shenwan Hongyuan: Pay attention to the positive changes in the steel industry; leading companies have good upward elasticity.

Shenwan Hongyuan released a research report stating that the current fundamentals, valuations, and institutional holdings in the steel industry are all at the bottom level, highlighting positive changes in the industry. Mergers and reorganizations in the sector are also expected to promote an increase in future concentration, and it is anticipated that the supply pattern will overall be optimized. The firm expects the iron ore price center to decline subsequently, driving profit recovery for steel companies. In summary, under the current bottom of the cycle, the overall profits of leading enterprises have a certain level of support, and with expectations of cost improvements, there is also good upward elasticity.