HK Stock Market Move | Steel stocks surged sharply, CHONGQING IRON (01053) surged 26%, Angang Steel (00347) rose more than 9%.

Steel stocks are showing strong gains, as of the time of writing, CHONGQING IRON (01053) is up 26.09% at HK$1.45; Angang Steel (00347) is up 9.64% at HK$2.16; and MAANSHAN IRON (00323) is up 5.53% at HK$2.67. On the news front, Changjiang pointed out that the steel sector is a sector with large elasticity and may exceed expectations. From high frequency data, the industry's expectations are undoubtedly quite low. The winter storage accumulation this year is the weakest in recent years, and the total inventory of the five major steel materials is also at a low level in recent years. After more than four years of downturn, the industry is relatively cautious and pessimistic in mindset. However, on the other hand, low inventory helps to alleviate the pressure of post-holiday destocking; the bottom price may mean that the price adjustment is more sufficient, and the material gradually reaches a weak balance from the supply and demand perspective. The bank said that in a state where the fundamentals and prices are fully bottomed out, if demand or supply side is catalyzed, the elasticity of material price increase may be more significant. At the current point in time, the probability of material price increases is greater than the probability of price decreases; and once prices rise, the elasticity of price increase is worth looking forward to.