This week’s view
Steel industry: marginal changes are expected in the market after the festival
As of January 28, the five major varieties of thread, hot coil, medium and heavy sector, cold rolling and wire rod reported 4820 yuan / ton, 4902 yuan / ton, 5042 yuan / ton, 5399 yuan / ton and 5154 yuan / ton respectively this week. The circumferential ratio changed by 0.2%, 0.2%, 0.9%, 0.0% and 0.2% respectively. In terms of social inventory, on January 28, the social inventory was 11.1652 million tons, an increase of 1.4476 million tons on a weekly basis.
Gross profit per ton of steel narrowed. The gross profit per ton of steel for thread, hot coil, medium and heavy sector, cold rolling and wire rod was 226 yuan, 174 yuan, 93 yuan, 178 yuan and 443 yuan respectively, down 46 yuan, 37 yuan, 24 yuan, 52 yuan and 49 yuan from last week.
Overall, the supply side remained relatively low after the festival, and it was difficult to release the supply significantly in the first quarter. On the demand side, special bonds will be issued in advance, infrastructure projects are expected to be implemented gradually after the festival, and industrial enterprises will gradually return to work and production. In the short term, the relationship between supply and demand is expected to improve marginally after the festival.
In the field of infrastructure construction, the word “stability” of economy will take the lead in 2022, and all localities are expected to accelerate the construction of underground pipe network and major water conservancy and gas pipeline projects. Therefore, we believe that under the background of “stabilizing the economy”, the pipeline industry is expected to accelerate the release of demand again with certainty. It is strongly recommended to pay attention to the relevant targets of the pipeline industry under the stable economy.
In addition, our first steel subdivision high-end variety, electrical steel, is the core magnetic material driving modern industry. In particular, high-grade non oriented electrical steel for new energy vehicles has extremely high technical barriers. Baosteel and Shougang master the core technology. Because new energy vehicles can only use high-grade non oriented silicon steel instead of all varieties. It is estimated that the proportion of non oriented silicon steel for new energy vehicles will increase to 17% – 20% in 2021. In addition, the motor energy efficiency upgrading plan (2021-2023) is released. The improvement of motor energy efficiency standards will bring a lot of demand for high-grade non oriented silicon steel. It is suggested to pay attention to the main targets of electrical steel: Beijing Shougang Co.Ltd(000959) , Baoshan Iron & Steel Co.Ltd(600019) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Xinyu Iron & Steel Co.Ltd(600782) , Maanshan Iron & Steel Company Limited(600808) .
Focus on the subject
Industrial sector companies: Beijing Shougang Co.Ltd(000959) , Hunan Valin Steel Co.Ltd(000932) , Nanjing Iron & Steel Co.Ltd(600282) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Maanshan Iron & Steel Company Limited(600808) , Baoshan Iron & Steel Co.Ltd(600019) , Xinyu Iron & Steel Co.Ltd(600782) , Angang Steel Company Limited(000898) .
Key special steel companies: Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Citic Pacific Special Steel Group Co.Ltd(000708) , Fushun Special Steel Co.Ltd(600399) , Jiangsu Toland Alloy Co.Ltd(300855) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) .
Building materials companies: Fangda Special Steel Technology Co.Ltd(600507) , Sansteel Minguang Co.Ltd.Fujian(002110) , Sgis Songshan Co.Ltd(000717) .
Municipal pipeline material company: Xinxing Ductile Iron Pipes Co.Ltd(000778) , Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) , Ningxia Qinglong Pipes Industry Group Co.Ltd(002457) .
Nonferrous Industry: the national quota of rare earth was issued in the first half of the year, and the rare earth supply side continued to maintain an orderly release. Under the high-speed pull of demand, the supply and demand maintained a tight balance
In the lithium sector, the quotation of lithium hydroxide last week was 298500 yuan / ton, up 3.11%; The quotation of battery grade lithium carbonate was 364000 yuan / ton, up 4.30%. In the rare earth sector, last week, praseodymium and neodymium oxide, dysprosium oxide and terbium oxide were quoted at 948000 yuan / ton, 3030000 yuan / ton and 13.6 million yuan / ton, up 1.94%, 1.34% and 3.03% respectively. The spot supply of raw materials in the upstream of new energy continues to be tight, and the state of continuous low inventory in the industrial chain will remain. Driven by the replenishment of inventory by downstream enterprises, we expect the price center of lithium and rare earth to continue to rise;
In the magnetic materials sector, the introduction of energy-saving motor policy under the guidance of double carbon and the pull of magnetic materials under the rapid development of new energy, wind power and photovoltaic energy storage in the future. We are optimistic about the pull of rare earth permanent magnet materials under the trend of high-efficiency energy-saving and miniaturization of motors, and the demand of new high-efficiency soft magnetic materials silicon steel and metal soft magnetic powder cores in the new energy era;
In terms of industrial metals, SHFE copper fell 1.40% last week to close at 70290 yuan / ton; SHFE aluminum price rose 2.43% to close at 21950 yuan / ton. The Fed announced that the interest rate in January remained unchanged at 0-0.25%, which was in line with expectations, but stressed that asset purchase would end in early March, and the federal funds interest rate would be appropriately raised soon. It said that it would start to reduce its balance sheet after raising interest rates, which would put some pressure on macro sentiment in the short term. In China, the PMI index of mining and manufacturing industry recorded 50.1% in mid January, with a slight decline of 0.2 percentage points. The PMI has been in the boom level for three consecutive months, and the forward-looking signals of economic recovery and credit stabilization have appeared. January has always been a big month for traditional credit. Under the background of steady growth, the financial data in January may significantly exceed expectations.
In terms of copper, the supply of upstream copper mines continued to improve, crude copper imports also gradually recovered, the supply of raw materials for smelters was basically sufficient, TC / RC continued to rise, and TC remained above $60 in January; The consumption of downstream processing enterprises is weakening. If the steady growth can produce practical results after the Spring Festival, it is expected to support the recovery of the consumer end.
In terms of aluminum, the problem of energy shortage in Europe continued. Driven by LME aluminum price, China’s aluminum price also rose significantly. Last week, SHFE inventory decreased by 15800 tons and social inventory was flat. Although the resumption of electrolytic aluminum production in China in the first quarter actively superimposed the shutdown in the downstream of the Spring Festival, electrolytic aluminum inventory did not accumulate. Overseas aluminum inventory has continued to decline since March 2021, and LME inventory has decreased from 1.96 million tons to the current 770000 tons, which is at a historical low in recent five years. We believe that with the support of various monetary and fiscal policies with steady growth, aluminum prices and related targets are expected to usher in a new round of market in the first quarter.
Focus on the subject
\u3000\u3000 China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) 、 Ganfeng Lithium Co.Ltd(002460) 、 Tianqi Lithium Corporation(002466) 、 Qinghai Salt Lake Industry Co.Ltd(000792) 、 Shenghe Resources Holding Co.Ltd(600392) 、 Rising Nonferrous Metals Share Co.Ltd(600259) 、 China Minmetals Rare Earth Co.Ltd(000831) 、 Poco Holding Co.Ltd(300811) 、 Hengdian Group Dmegc Magnetics Co.Ltd(002056) 、 Ningbo Jintian Copper (Group) Co.Ltd(601609) 、 Zhejiang Hailiang Co.Ltd(002203) 、 Guangdonghectechnologyholdingco.Ltd(600673) 、 Kbc Corporation Ltd(688598) 、 Zijin Mining Group Company Limited(601899) 、 Western Mining Co.Ltd(601168) 、 Aluminum Corporation Of China Limited(601600) 、 Yunnan Aluminium Co.Ltd(000807) 、 Henan Shenhuo Coal&Power Co.Ltd(000933) 。
Risk tips: the risk of sharp fluctuation in the price of raw materials in the upstream, the risk of lower than expected demand in the downstream, and the risk of continuous spread of overseas epidemic.
