Core view
The Spring Festival has passed and steady growth has entered the start-up period. Safety accidents occurred frequently in 2021, with gas pipeline safety and urban waterlogging control being the most prominent. In the context of steady growth, the central government has set the tone to appropriately carry out infrastructure investment in advance and accelerate the promotion of 102 major engineering projects in the 14th five year plan. Regardless of the project and capital level, the underground pipe network and key water conservancy projects are the most determined support direction in infrastructure construction, and there is still much room for development of underground pipe network and major water conservancy projects. With the end of the holiday and the warmer weather, we believe that many policies are expected to begin to be fulfilled, and the demand for steel after the festival is expected to be released in advance. Superimposed on the current cost support, supply inhibition and demand release are imminent, and the steel fundamentals are about to recover.
From the perspective of steel enterprises' profits, although the prices of iron ore and double coke rose this week, the steel price rebounded strongly as a whole, and the steel profit continued to rise. Among them, due to the high scrap price and high cost, the short process steel turned around under the rise of steel price, the gross profit per ton of steel with the worst profit of screw thread steel was 142 yuan / ton, and the gross profit per ton of steel with the highest profit of cold rolling was 532 yuan / ton; The profit of long process is high, the profit of deformed steel is the worst, the gross profit per ton of steel is 760 yuan / ton, and the profit of cold rolling is the highest, the gross profit per ton of steel is 1150 yuan / ton.
In the year of 21, the annual output of crude steel was 1.033 billion tons, a decrease of 3.00%; The output of pig iron was 869 million tons, a decrease of 4.30%; Overall, the goal of no increase in annual output was exceeded. From the daily average output in January, pig iron is about 2 million tons / day and crude steel is about 2.5 million tons / day, which has entered the limited production mode of Winter Olympics as a whole; We believe that after the Spring Festival, with the convening of the Winter Olympic Games and the advent of replenishment in spring, the expectation of steel production restriction is becoming stricter. On the demand side, with the steady growth of real estate and infrastructure and other policy effects, the focus of steel price may be gradually upward, superimposed with the weakening demand for raw materials, and the steel profit is expected to improve.
Suggestions: (1) ordinary steel sector: Hunan Valin Steel Co.Ltd(000932) , Xinyu Iron & Steel Co.Ltd(600782) , Beijing Shougang Co.Ltd(000959) , Maanshan Iron & Steel Company Limited(600808) , Sansteel Minguang Co.Ltd.Fujian(002110) ; (2) Special steel sector: Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Citic Pacific Special Steel Group Co.Ltd(000708) , Zhejiang Yongjin Metal Technology Co.Ltd(603995) ; (3) Underground pipe network: Xinxing Ductile Iron Pipes Co.Ltd(000778) , Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) , Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Ningxia Qinglong Pipes Industry Group Co.Ltd(002457) .
Terminal demand bottomed month on month, and the production restriction of steel mills continued
The procurement volume of thread snails in Shanghai was 15600 tons, down 2.5% month on month, 027000 tons compared with the same period last year, down 1.7% year-on-year. The operating rate of blast furnace was 45.99%, with a month on month ratio of -0.42pct, a year-on-year decrease of 21.14pct; The operating rate of electric furnace was 28.21%, with a month on month increase of 2.57pct.
Continuous upward inventory with double coke price
The price of iron ore futures rose by 41 yuan / ton to 843 yuan / ton, or 5.12%; Coking coal futures price 2658 yuan / ton, flat this week; Coke futures price 3250 yuan / ton, flat this week. The inventory of coking coal and steel plant was 9.913 million tons, a decrease of 903000 tons compared with last week; The inventory of independent coking plant was 11.985 million tons, a decrease of 1.048 million tons compared with last week; The coke inventory of the steel plant was 7.453 million tons, a decrease of 32700 tons compared with last week; 4.9343 million tons of injected coal were stored in the steel plant, down 227500 tons from last week.
Risk tip: macroeconomic repair is not as expected; Global inflation is higher than expected; The increase of ore production did not meet the expectation; The development and vaccination progress of covid-19 vaccine was lower than expected.
