Market review:
As of the closing on January 28, the steel sector fell 4.54% this week, and the CSI 300 index fell 4.51%. The rise of the steel sector lagged behind the CSI 300 index by 0.03pct. In terms of sector ranking, the weekly growth rate of the steel industry ranks 15th among Shenwan 31 sectors, with an increase of – 7.36% year to date, ranking 14th among Shenwan 31 sectors.
Talk every Monday:
The inventory is running at a low level, and the accumulation of inventory after the festival is expected to be limited: the inventory of large variety steel mills and social inventory on the last Friday before the festival are 4.3593 million tons and 11.1652 million tons respectively, which are – 30.7% and – 3.43% year-on-year according to the Gregorian calendar and – 35.37% and – 18% year-on-year according to the lunar calendar. The inventory of the two parts is in a low position compared with previous years; According to the prediction of CISC, the average daily output of crude steel in China in late January was 2.509 million tons, down 0.91% month on month. At present, it is still in the period of limited production in northern heating season and concentrated maintenance. Coupled with the rise of iron ore and coke prices squeezing the profits of steel mills, the recovery rate of national crude steel output may slow down. It is expected that the accumulation of steel after the festival will be limited, and the steel price will operate in a short-term or strong manner;
The policy focuses on stabilizing the economy, the profit per ton of steel goes down again, and the opportunities of track segmentation: last week, the director of the National Bureau of statistics wrote an article that actively launched policies conducive to economic stability, implemented steady and effective macro policies, carefully introduced policies with contraction effect, and the policy force should be advanced appropriately; In the near future, the gross profit per ton of steel went down as scheduled. As of January 30, the spot gross profit per ton of steel in thread and hot coil spot fell below 600 yuan / ton. Under the condition that the restriction orientation for crude steel output is not clear, it is expected that the long-term resumption of production of steel mills will continue, and the profit per ton of steel may be continuously suppressed, focusing on stainless steel, special steel, seamless steel pipe The growth opportunities of cast pipe segment enterprises and the valuation and repair opportunities of industry leaders, superimposed with the expectation of rising capital investment, pay great attention to the investment opportunities brought by the acceleration of pipeline transformation to the cast pipe and welded pipe market;
Market impact: low inventory or short-term push up the steel price after the festival. In the medium and long term, the resumption of production of steel mills will continue. We pay attention to the suppression of the weak expectation of administrative production restriction on the profit per ton of steel and the release of infrastructure demand. The stainless steel processing enterprises with anti cycle and growth attributes have significant investment value and low valuation of special steel, seamless pipe, welded pipe Casting pipe enterprises have good investment opportunities;
Investment strategy: focus on recommending stainless steel processing enterprises Zhejiang Yongjin Metal Technology Co.Ltd(603995) and pipe processing enterprises Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) with growth potential benefiting from the recovery of manufacturing industry, and recommend special steel leaders Citic Pacific Special Steel Group Co.Ltd(000708) with significant valuation advantages;
Risk tip: the policy implementation is less than expected, the supply contraction is limited, and the demand is less than expected.
