Hong Kong Stock Concept Tracking|Supply-side Reform Adjustments Steel Supply Market Concerns Implementation of Domestic Production Restrictions (with concept stocks)

According to a report by Shanghai Securities, in response to the impact of the US “equal tariff” policy, several listed companies in the steel industry responded that due to the small scale of China's steel exports to the US, the “equal tariff” measures imposed this time have little impact on China's steel exports to the US.

Although on the surface, it will have some impact on China's steel exports to other countries and then exported to the US after processing in other countries, this practice will only adjust the trade pattern, and will have little impact on China's steel exports throughout the year.

The Zhitong Finance App learned that Citi published a report on China's resources industry, stating that the announced US tariffs will have little impact on steel-related sub-industries. It is expected that Chinese exports will generally face downward pressure and affect Chinese commodities. This in turn will prompt the government to introduce more stimulus policies to boost domestic demand and ensure supply-side discipline, thereby balancing supply and demand dynamics. The bank expects the central government to introduce more supply-side reforms to adjust steel supply in the short term, and is optimistic about individual industry stocks such as Maanshan Iron and Steel Co., Ltd.

Changjiang Securities pointed out that in anticipation of supply-side tightening this year, the futures market has low confidence in the implementation of production limits due to high macroeconomic pressure; while the equity market is based on the safety cushion of the triple bottom of steel fundamentals+valuation+holdings, it is trying to play a left-hand game. Analogous to 2016, the continued rise in the market or the increase in market confidence in production limits requires clear production limit targets, methods for allocating production limit indicators, and the participation of more government departments.

Hong Kong stocks with steel-related concepts:

Angang Steel Co., Ltd. (00347); Maanshan Iron & Steel Co., Ltd. (00323); Chongqing Iron & Steel Co., Ltd. (01053), China Oriental Group (00581), etc.