In 2025, policies will focus on both supply and demand, with further expectations of supply contraction. With increased policy support, steel demand will remain stable, and the supply-demand relationship will be substantially improved. Steel prices are expected to stabilize, and a "profit bottom" will be formed. Industry profits may rebound from the bottom. At the same time, the market value management work is steadily advancing, policy measures are being intensified, and the target direction is clear. The steel sector has long exceeded the net target, forming a "valuation bottom", and the sector valuation is expected to return reasonably. At present, the inventory level of steel is low, and the contradiction between supply and demand in the industry is not obvious. With the strengthening of incremental policies, the steel industry has the foundation to continue to rebound upwards. Suggest focusing on five investment opportunities: 1) Continuously optimizing the variety structure, capable of crossing cycles, maintaining stable high scores, high dividends, low valuations, safety margins, and high odds: Baosteel Group, Nangang Group, etc; 2) There are high technological or cost barriers that can resist "involution" and simultaneously layout incremental projects or overseas projects, such as CITIC Special Steel and Jiulite Materials; 3) Waiting for the reversal of difficulties, companies with high performance elasticity, focusing on exploring the ultimate potential for cost reduction or enhancing the valuation of state-owned enterprises, such as Fangda Special Steel, etc; 4) Other companies with long-term net worth, belonging to the nature of state-owned enterprises, and relatively stable performance management, such as Taiyuan Iron and Steel Stainless Steel Co., Ltd; 5) Dual use military and civilian, high-temperature alloys as a growth niche continue to thrive and belong to industry-leading companies, such as Fushun Special Steel; Other companies that are concerned about the stable operation based on mineral resource endowment, and whose performance will benefit from the increased volume of copper phase II, and are optimistic about valuation restoration, such as Hebei Iron and Steel Resources.