Orient Securities·2025-12-14 12:29Investment Rating - The industry investment rating is maintained as "Buy" for specific companies within the steel sector, indicating a strong potential for returns exceeding 15% relative to market benchmarks [3][12]. Core Insights - The introduction of export license management for certain steel products is expected to optimize the export structure, encouraging companies to shift towards high-value products and enhancing domestic profitability [8]. - The domestic steel demand is declining due to the downturn in the real estate sector, with crude steel apparent consumption expected to decrease by 4.4% in 2024, while net exports are projected to rise by over 30% [8]. - The anticipated stabilization of steel profitability is supported by a balance in supply and demand, alongside a downward trend in costs, suggesting a shift towards high-quality and high-return development in the industry [8]. Summary by Sections Steel Sector Investment Recommendations - Recommended companies include: - Nanjing Steel (600282, Buy) for its strong pricing power and stable profitability - CITIC Special Steel (000708, Buy) for its continuous optimization of product structure - Shandong Steel (600022, Buy) for its significant profit improvement driven by operational synergies and cost reduction [3]. - Other companies mentioned include: - Hualing Steel (000932, Not Rated) - Sansteel Minguang (002110, Not Rated) [3]. Export License Management Impact - The implementation of export licenses for 300 steel products, including pig iron and steel plates, marks a new phase in domestic steel export management, aiming to guide companies towards higher-value exports [8]. - The management is expected to alleviate the pressure of overcapacity in the domestic market by regulating low-end product exports [8]. Market Dynamics and Profitability Outlook - The first shipment of high-grade iron ore from the Simandou project indicates a potential decrease in iron ore prices, which could positively impact steel profitability [8]. - The expectation of improved dividend capabilities for companies as capital expenditures for environmental upgrades peak and decline [8].