Steel stocks in Hong Kong experienced a collective downturn. At the time of writing, APAC RESOURCES (01104) fell by 7.93% to HK$2.67. MAANSHAN IRON (00323) dropped 7.62% to HK$2.79. ANGANG STEEL (00347) declined 3.68% to HK$1.83. CHONGQING IRON (01053) decreased by 3.17% to HK$1.22.

An analysis report indicates that steel mills' spring inventory replenishment for the year has largely concluded, with its intensity weaker than the previous year. End-user demand remains tepid, and the ability to pass on costs is insufficient, leading to a reduction in the industry's average profit by 31.7 yuan, resulting in a current loss of 53 yuan per ton. The market has largely absorbed the impact of unmet policy expectations from recent domestic important meetings. Currently, stagflation fears triggered by geopolitical events, combined with intensified pricing power struggles in the upstream sector that are squeezing margins, are acting as major constraints on the steel sector's performance.

Another analysis points out that supply disruptions are strongly pushing up iron ore prices. However, total port inventories remain elevated, with imported iron ore stockpiles at 45 major ports in China staying above 170 million tonnes—a historically high level—and showing a significant year-on-year increase. Substantial inventory pressure continues to cap the upside potential for prices. Looking ahead, the iron ore market is expected to be primarily driven in the short term by sentiment surrounding geopolitical conflicts and negotiation progress. Prices may maintain a volatile but slightly stronger trend, yet their upward movement will be constrained by both high inventory levels and weak underlying fundamentals.