The Steel Industry is "Still Undervalued Physical Assets" Anyang Steel and Jiuquan Iron & Steel Both Hit Daily Limits

(Source: Caixin)

Under the triple logic of long-term improvement in supply and demand patterns, strengthened short-term cost support, and low sector valuations, the steel industry is expected to experience a valuation recovery.

On March 17, the steel sector saw a surge, with Anshan Iron & Steel (600569.SH) and Jiu Steel Hongxing (600307.SH) both hitting the daily limit-up. Zhongnan Shares (000717.SZ), Lingang Shares (600231.SH), and Xining Special Steel (600117.SH) also rose.

According to industry news, the Ministry of Industry and Information Technology announced the formation of joint ventures led by key industry leaders in steel and other core sectors, focusing on building industry data sets. On March 10, the Ministry released the “Notice on Launching the Industrial Data Foundation Initiative and Pilot Construction of High-Quality Industry Data Sets Enabled by Artificial Intelligence.”

Cinda Securities pointed out that the steel industry remains an “undervalued physical asset.” Looking ahead to the 14th Five-Year Plan, the industry is expected to continue deepening efforts to reduce internal competition, with supply and demand likely to improve long-term. On the supply side, the “14th Five-Year Plan” explicitly promotes structural adjustments in the steel industry, strict regulation, market-oriented mergers and acquisitions, and the orderly exit of outdated and inefficient capacities, along with comprehensive measures to curb “internal competition.” On the demand side, policies will accelerate the construction of critical urban infrastructure projects, promote the renovation of old pipelines, dangerous and dilapidated housing, and old neighborhoods, and steadily advance urban village redevelopment. In the short term, factors such as the Iran situation and restrictions on iron ore procurement are expected to keep iron ore prices relatively strong, which will also support steel costs. Under the triple logic of long-term supply and demand improvement, strengthened short-term cost support, and low sector valuations, the steel sector is poised for a valuation recovery.