Di Yi Cai Jing·2025-09-22 10:53Core Viewpoint - The steel industry is accelerating its "anti-involution" efforts, with a focus on capacity reduction and optimization, as outlined in the "Steel Industry Stabilization Growth Work Plan (2025-2026)" issued by multiple government departments [1][2] Group 1: Industry Goals and Measures - The main goal of the plan is to achieve an average annual growth of about 4% in the steel industry's added value from 2025 to 2026 while prohibiting new capacity and implementing production cuts [1][2] - The plan emphasizes enhancing supply-demand adaptability through five key measures: strengthening industry management, promoting technological innovation, expanding effective investment, increasing market demand, and deepening open cooperation [2][3] Group 2: Current Industry Challenges - The steel industry is facing significant downward pressure due to a prolonged demand decline influenced by the real estate and infrastructure sectors, leading to an oversupply of crude steel [2][4] - The net asset return rate for the ordinary steel sector was only 0.93% in the first half of 2025, marking a historical low since 2010 [2] Group 3: Financial Performance and Market Reaction - The steel sector's revenue decreased by approximately 10% year-on-year in the first half of the year, with many companies reporting losses [5] - The average price-to-book ratio (PB) for the ordinary steel sector is currently at 0.74, significantly lower than peaks in 2017 and 2021, indicating a historical low valuation [5][6] - Following the announcement of the new plan, there has been a notable increase in stock prices for several steel companies, with some experiencing gains of over 5% [1][6] Group 4: Future Outlook - Analysts suggest that the focus on capacity reduction and the shift towards high-value, low-carbon, and intelligent production methods may lead to a recovery in profitability and valuation for leading steel companies [3][4] - The market is expected to closely monitor the implementation of production cuts and the resulting effects on the industry [6]