Gelonghui, November 2 | UBS released a report stating that it remains cautious about China's cement and steel industry. Although steel mill profits improved markedly in the third quarter, it is estimated that the fourth quarter was not balanced, mainly because iron ore and coking coal prices rebounded. The industry's profitability declined at the end of September, and losses began in mid-October. It is estimated that it will take time for the industry to restore the balance between supply and demand. In the cement industry, gross profit per ton in the third quarter was adjusted on a quarterly basis, returning to the same period last year. It was mainly affected by market price competition. Performance from September to October was weak, and profitability in the fourth quarter was also affected. The bank lowered the profit forecast for Angang Steel Co., Ltd. to reflect inflationary cost pressure and unbalanced supply discipline in the industry. At the same time, it also lowered the profit forecasts of other cement companies to reflect increased price competition. The bank believes that the valuations of Conch Cement, China Building Materials, Angang Steel, and Ma Steel are already at a low point, mainly due to weak basic factors and disappointing prospects for the fourth quarter. It also favors Huarun Cement and maintains its “selling” rating to reflect the market supply situation in southern China.