Iron and steel: Recently, the share price of iron and steel has fallen sharply and the price of steel has risen, which deviates significantly. The decline of stock price is related to the systematic correction of the market and the pre loss of some steel enterprises in the fourth quarter; On the one hand, the rise in steel prices is driven by costs. On the other hand, the expectation of steady growth makes the market optimistic in the off-season. There have been cases of deviation of steel price and stock price in history. The most recent time was in the second half of 2021. The steel stock price fell sharply after peaking in mid September, while the steel price continued to rise to October 11, a month away. There was also a large-scale deviation in history – in the first half of 2008, the stock price plummeted and the steel price soared, and the deviation lasted for half a year. From the perspective of historical cases, the stock price is leading, but the duration of deviation can be long or short. This round of deviation is likely to continue until the spring, because this period of time is a low season, stable growth can not be falsified, steel prices may be strong driven by funds and expectations, and face uncertainty after the peak season. Iron ore prices have rebounded sharply recently. On the one hand, they benefit from stable growth and the expectation of steel enterprises to resume production after the Winter Olympic Games. On the other hand, the intensification of the epidemic in Australia makes the expectation of tightening supply. In terms of policy, we reiterated the pressure on iron ore, but iron ore is different from coal. The coal supply is controlled in China, while iron ore is overseas. The policy statement may suppress the mood, and the price will ultimately be determined by supply and demand. It is suggested to look for opportunities from the growing new material industry and pay attention to Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Fushun Special Steel Co.Ltd(600399) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Yongxing Special Materials Technology Co.Ltd(002756) , etc.
Coal: the demand for replenishment during the Spring Festival supports the strong price and pays attention to the performance catalysis of the annual report. In terms of power coal: the demand for replenishment of storage is supported, and the coal price runs strongly. This week, the price of 5500 kcal thermal coal produced in QinGang Shanxi was 1070 yuan / ton, up 70 yuan / ton on a weekly basis, continuing the rise. In terms of supply, near the Spring Festival, the coal mines in the producing areas have stopped production and holidays one after another, the supply has been tightened as a whole, and most coal mines have basically no inventory accumulation; The terminal goods are actively prepared, the platform shipment is good, there are many long-distance transport vehicles, and the price of coal mines in production has increased slightly. In terms of import, there have been many bidding for downstream power plants recently, but there are few resources. The coal price in Indonesia has increased significantly. Now, the quotation of large ship type in Indonesia (cv3800) is about fob75 US dollars. In terms of demand, the Spring Festival is approaching, downstream enterprises have holidays one after another, and procurement slows down. However, affected by the Winter Olympic Games, some power plants pick up the warehouse, and building materials and chemical industry prepare goods after the festival, which supports the price. On the whole, the coal supply continued to be tight this week. In the case of shortage of available resources, the downstream replenishment demand supported the coal price to rise slightly. In the follow-up, we will pay attention to the holiday arrangement and the daily consumption of the power plant. In terms of coking coal, both supply and demand are weak, mainly stable. As of January 28, the price (including tax) of Shanxi main coke coal depot in Jingtang Port was raised by 2830 yuan / ton, unchanged month on month. In terms of supply, at present, some coal mines in Shanxi, Shaanxi and Inner Mongolia have stopped production and holidays, the overall construction has declined significantly, and the supply side has been further tightened. In terms of import, the epidemic situation in Mongolia is still severe recently. The number of customs clearance at Ganqi Maodu port remains low. This week, the port has been cleared for 4 days, with an average of 89 vehicles per day (week on week – 3 vehicles). Recently, most small and medium-sized traders have left the city for vacation, and the transaction at the port is cold. In terms of demand, the replenishment of downstream coke enterprises has basically ended. Coupled with the expectation of production restriction in February, most of them have stopped purchasing, and the demand side is weak as a whole. On the whole, the supply and demand of coking coal market are both weak, and the price is mainly stable. Follow up attention will be paid to the implementation of production restriction. In terms of coke, the production restriction of steel mills is stronger than that of coke enterprises, and the pattern of supply and demand mismatch is gradually presented. As of January 28, the price of secondary metallurgical coke in Tangshan was 3200 yuan / ton, unchanged on a weekly basis, and the national average profit per ton of coke was about 159 yuan / ton. In terms of supply, coke enterprises had good production enthusiasm this week, but due to the impact of large-scale snowfall and the reduction of traffic flow before the festival, the coke in the plant accumulated significantly; With the Winter Olympic Games approaching, the implementation of the production restriction policy of coke enterprises is slow. At present, only a few coke enterprises implement about 50% of the production restriction, and the overall commencement is still high. In terms of demand, the stock replenishment of downstream steel mills before the festival has basically ended. Some blast furnaces in Hebei have successively implemented the requirements of stopping and limiting production. A few steel mills control the arrival of goods, mainly to digest the existing inventory, and the demand for coke has dropped significantly. On the whole, the production restriction at the supply side is weak, while the production restriction at the steel plant is strengthened, and the supply and demand structure of the steel plant tends to be in surplus. In the follow-up, pay attention to the production restriction and the changes of upstream and downstream inventory. Investment strategy: this week, coal prices continued to rise. Near the Spring Festival, coal mines stopped production one after another and the supply was tightened; Affected by the Winter Olympic Games, the power plant actively picked up the warehouse, and the building materials and chemical industry also prepared the goods in advance, which supported the price. Since the 26th of the twelfth lunar month, coal mines, terminal enterprises and transportation began to have holidays, gradually forming a pattern of weak supply and demand. It is expected that the short-term coal price will run smoothly. A total of 171 coal enterprises have been allowed to reopen their exports since the Indonesian government imposed a coal export ban on January 1, an adviser to the Minister of the Ministry of energy and mineral resources (esdm) said on January 27. In addition, the Indonesian Ministry of energy is still evaluating the compliance of hundreds of miners. At present, the demand of overseas coal market is strong, resources are relatively scarce, and the price of Indonesian coal has increased significantly. In the follow-up, we still need to pay attention to the shipment of Indonesian coal. Last week, many coal enterprises disclosed the performance forecast for 2021, China Shenhua Energy Company Limited(601088) realized a net profit attributable to parent company of 50.3 billion yuan (+ 28%), Yankuang energy of 16 billion yuan (+ 124.67%), and power investment energy of 3.56 billion yuan (+ 71.9%). The substantial release of coal enterprises’ performance and the full release of superimposed coal price risk are conducive to the continuous catalysis of the market of the sector. In the medium and long term, under the background of lack of planned investment, the constraints on the coal supply side are strong. Under the background of small annual growth in demand, coal will be a scarce resource in the next few years, and the stock capacity or high profits. The increase of the benchmark price of the annual long-term association also ensures the ability of the industry to maintain high profitability. Under the dual carbon goal, coal enterprises urgently need to transform, invest in power, energy Yankuang, Shenhua, Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) , Shanxi Meijin Energy Co.Ltd(000723) and other major forces are in the direction of new energy operation and hydrogen energy. The coal industry has the advantages of strong cash flow and rich land resources in new energy operation, and has the ability and willingness. The transformation of new energy direction is conducive to improving the overall sector valuation level (at present, the PE valuation is 5-6 times), and the coal assets need to be repriced, Continue to be optimistic about the investment value of the sector. Thermal coal stocks are suggested to pay attention to: Shaanxi Coal Industry Company Limited(601225) , Yanzhou Coal Mining Company Limited(600188) , China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , power investment and energy, Beijing Haohua Energy Resource Co.Ltd(601101) . Metallurgical coal stocks are suggested to pay attention to: Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Jizhong Energy Resources Co.Ltd(000937) , Shanxi Coking Co.Ltd(600740) . Anthracite recommended attention: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . Coke stocks are suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015) .
Nonferrous Metals: the upstream of new energy is booming, and China’s broad credit supports the confidence of basic metal demand. 1) The upward trend of raw material prices in the upstream of new energy has been continuously strengthened. The sales volume of China’s new car building forces in January was brilliant. Xiaopeng delivered 12922 cars in January, with a year-on-year increase of 115% and a month on month decrease of 19.2%; 12268 ideal one vehicles were delivered, with a year-on-year increase of 128% and a month on month decrease of 12.9%; Weilai delivered 9652 vehicles in January, with a year-on-year increase of 33.6% and a month on month decrease of 8%; Nezha delivered 11009 vehicles in January, with a year-on-year increase of 400% and a month on month increase of 8.7%. Lithium carbonate prices accelerated upward again. Before the festival, battery grade lithium carbonate increased by 7.6%, and the quotation of battery grade lithium hydroxide increased by 7.0%. Pilbara expects the long-term single price of 22q1 lithium concentrate to reach 2600-3000 US dollars / ton.
With the tightening of raw materials, the price of cobalt may rise further. The quotations of MB cobalt (standard grade) and MB cobalt (alloy grade) increased by 0.2% and 0.4% month on month respectively, and the prices of Chinese metal cobalt and cobalt sulfate increased by 0.4% and 2.4% respectively. The pattern of rare earth permanent magnet industry was reshaped. In the spot market and pre Festival spot market, the quotation of praseodymium and neodymium oxide in China rose by 2.7% to 953000 yuan / ton; In terms of medium and heavy rare earths, the prices of dysprosium oxide and terbium oxide increased by 0.7% and 3.1% respectively; In terms of policy, the Ministry of industry and information technology and the Ministry of natural resources issued the first batch of Rare Earth total amount index control plan in 2022. No unit or individual shall produce without and beyond the index. The total amount control indexes of the first batch of rare earth mining, smelting and separation in 2022 are 100800 tons and 97200 tons respectively. A year-on-year increase of 16800 tons of REO (YoY + 20%), of which the increment is all light rare earth indicators, medium and heavy rare earth indicators have no growth, and the supply and demand structure is still tightening. Nickel: Qingshan high nickel matte was delivered, and the nickel price fluctuated greatly. On January 24, Castle Peak announced that its high matte nickel had been sent from Indonesia to China, resulting in sharp fluctuations in nickel prices. SHFE nickel closed at 165100 yuan / ton, down 6.57% month on month. 2) Precious metals, US non farm data exceeded expectations, and soaring energy prices supported gold prices. The number of new non farm jobs in the United States in January exceeded market expectations, and the market has begun to gradually digest the expectation of raising interest rates by 50 basis points in March; At the same time, the soaring energy prices have also played a role in promoting the price of gold. As of February 4, Comex gold closed at US $1807.8/oz, up 1.19% month on month; COMEX silver closed at US $22.475/oz, up 0.78% month on month. 3) Base metals, the race between China’s steady growth and the contraction of overseas liquidity. With China’s policy tone turning to steady growth at the end of the year, it is expected that China’s credit data will gradually stabilize. However, with the recovery of overseas economy and high inflation, liquidity contraction is inevitable. The main pattern of basic metals in the future is the race between China’s steady growth and overseas liquidity contraction. Lower inventories this week pushed up the prices of base metals such as copper and nickel, but gains were limited by concerns that the central bank’s interest rate hike would curb growth and metal demand. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by 4.0%, 0.9%, – 1.8%, – 0.1%, 3.4% and 3.3% respectively this week. Prices rose or fell. 4) Investment strategy: for base metals, China’s economic work in 2022 will be “stable”, which will provide some support for the price of base metals. However, from the global dimension, the changes in the structure before, during and after the overseas economic demand epidemic, as well as the global liquidity taper trend remain unchanged, and the downward trend of base metals may not have been fundamentally changed. The upstream raw materials of new energy, such as lithium cobalt, rare earth, copper foil, aluminum foil and magnetic materials, are still strong in the short cycle, and the general direction of the medium and long-term three-year boom upward cycle will not change. The industrial boom is the most clear and firmly optimistic.
Building materials: we believe that steady growth is still the main line and pay attention to the infrastructure chain in the short term. In terms of infrastructure, the implementation of projects / special bonds has been accelerated. Under the current economic pressure, the role of infrastructure investment may be more prominent, and the rhythm has been further advanced (the special bonds in January increased by 221.4 billion compared with the same period last year). We pay attention to the investment opportunities of industries with high proportion of infrastructure such as cement, water reducing agent, pipe and waterproof. The investment opportunities of brand building materials and new materials are promising throughout the year. In terms of real estate, policy marginal relaxation + increased demand, affordable housing with non real estate developers as the main body, and the demand of the real estate chain is expected to gradually pick up. In terms of brand building materials, some companies have announced their performance for 21 years, and their profits have declined significantly. We judge that 21q4 is still affected by the impairment of receivables from real estate customers. With the further provision of impairment, we judge that the impairment risk of brand building materials may have been fully released. We believe that the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption in 2014 / 18). The double repair of the performance and valuation of brand building materials in 22 years is worth looking forward to. The layout of brand building materials has high certainty. In the field of new materials, carbon fiber / high-purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand + domestic alternative resonance, and UTG welcomed the outbreak of demand. The glass fiber cycle weakened, the roving boom is expected to continue, and the price center of electronic cloth fell. The price toughness of float glass still exists; The price of photovoltaic glass or bottom is flexible. Cement industry integration + extension; Water reducing agent opens up growth space for functional materials.
Chemical industry: 1) the leading value crosses the cycle and actively embraces the opportunities of new materials: the medium-term recovery of crude oil is expected, so it is recommended to pay attention to Offshore Oil Engineering Co.Ltd(600583) . The traditional bulk is still looking for the bottom, and the leading value crosses the cycle. Affected by the economic cycle and the global spread of the epidemic, traditional bulk products in the chemical industry are in a downward trend. As the main body of the chemical industry, the PPI of chemical raw materials and chemical products manufacturing industry in December 2021 increased by 23.8% year-on-year, which was positive for 12 consecutive months. It is suggested to pay attention to the leading enterprises with excellent quality and core competitiveness: in the downward period of the cycle, the leading enterprises expand their advantages, and the valuation is obviously low, or realize through the cycle, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Zhejiang Nhu Company Ltd(002001) , Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) , Hengli Petrochemical Co.Ltd(600346) . 2) Actively embrace industrial innovation and supply chain reconstruction. Scientific and technological progress promotes the innovation of terminal demand and drives the upgrading and development of high-end manufacturing industry. In this process, industrial innovation will put forward higher requirements for material properties and promote the rapid development of new material industry. It is suggested to pay attention to the targets of industrial innovation and supply chain reconstruction: Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Sinocera Functional Material Co.Ltd(300285) , Valiant Co.Ltd(002643) . In addition, it is suggested to focus on high-quality growth companies: Zhejiang Hailide New Material Co.Ltd(002206) .
Risk warning event: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase. The economic growth rate is lower than expected; Excessive policy regulation; Renewable energy substitution, etc; Risk of coal import impact. Macroeconomic fluctuation, import and environmental protection and other policy fluctuation risks, gold price fluctuation risks, new energy vehicle sales are lower than expected risks, and the premise assumptions of industry supply and demand calculation are lower than expected risks. Risks of macroeconomic downturn; The epidemic has led to lower than expected demand; Risk of relaxation of production restriction and new production capacity; Risk of poor capital turnover of 2B end enterprises. Macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.
