Zhi Tong Cai Jing·2025-12-15 08:28Core Viewpoint - The Ministry of Commerce and the General Administration of Customs announced the implementation of export license management for certain steel products starting January 1, 2026, which is expected to optimize the export structure and promote the adjustment of production capacity in the steel industry [1][2]. Group 1: Export License Management - The new export license management will cover 300 steel products, including pig iron, scrap steel, steel billets, plates, and profiles, marking a return to a regulatory framework not seen since 2009 [1]. - The implementation of this management system is anticipated to suppress the export volume of low-end steel products in the short term but may lead to a more balanced supply-demand dynamic in the long term [3][4]. Group 2: Industry Dynamics - In the first half of 2025, domestic steel exports increased by 9.2% year-on-year, but the average export price fell by 10.3%, indicating a structural contradiction where companies are still competing primarily on price [2]. - The export license management is expected to guide companies towards exporting higher value-added products, thereby retaining profits within domestic enterprises and facilitating industry transformation [2]. Group 3: Supply and Demand Balance - The demand for crude steel in China is declining, with a projected consumption of approximately 890 million tons in 2024, down 4.4% year-on-year, while net exports exceeded 10 million tons, alleviating some overcapacity pressure [3]. - The introduction of export licenses is expected to help optimize domestic production capacity and stabilize steel profitability, with expectations of a high-quality and high-return development phase for the industry [4]. Group 4: Investment Recommendations - The steel sector is recommended for investment, particularly companies with strong pricing power, stable profitability, and high dividend yields, such as Nanjing Steel (600282) and CITIC Special Steel (000708) [5]. - Other notable companies include Hualing Steel (000932) and Sansteel Minguang (002110), which are expected to benefit from improved operational efficiencies [5].