Steel stocks posted broad gains in early Hong Kong trading. As of press time, CHONGQING IRON (01053) rose 2.92% to HK$1.41; MAANSHAN IRON (00323) gained 1.61% to HK$2.52; and CHINA HANKING (03788) climbed 1.1% to HK$3.67.
On the news front, the Ministry of Industry and Information Technology and other departments jointly released the "Steel Industry Stable Growth Work Plan (2025-2026)" on September 22, setting an annual growth target of approximately 4% for the steel industry's added value over the next two years. The plan centers on "stable growth and preventing involution," providing an implementation roadmap for structural adjustment and high-quality development in China's steel industry.
The work plan proposes implementing precise capacity and output regulation, advancing graded and classified management of steel enterprises, strictly prohibiting new capacity additions, and guiding resource allocation toward leading enterprises. Through output regulation to promote survival of the fittest, the plan aims to achieve dynamic supply-demand balance.
Experts note that the new plan establishes "equipment upgrades" and "low-carbon transition" as two core competitive themes for the future. According to the plan, steel companies must accelerate the elimination of outdated equipment, particularly aging blast furnaces, converters, and other restrictive production facilities. The plan also clearly requires that over 80% of steel capacity complete ultra-low emission transformation by the end of 2025.
CICC believes that looking ahead to the second half of 2025, under the anti-involution framework, output regulation is expected to be implemented. Combined with the inventory cycle currently at the bottom that may reverse alongside recovering market expectations, industry supply-demand improvement is anticipated. Meanwhile, the deteriorating raw material pattern further enhances the certainty and elasticity of profit cycle recovery. The steel industry is currently positioned on the left side of a major cycle bottom reversal, with the cycle bottom becoming increasingly clear. The firm remains optimistic about the industry's upward cyclical resonance, with a bottom reversal potentially on the horizon.