Investment strategy: frequent policy statements this week have caused continuous pressure on iron ore prices and dragged down steel prices. The real demand is in the process of switching from off-season to peak season, and the absolute level is still low. The high-frequency data still can not explain the strength of demand. The effect of steady growth can only be tested in the peak season of March. In terms of the total amount, it may still be difficult for the steel demand in the spring peak season to exceed the expectation, because the real estate sales are still in the doldrums, and the short-term new construction is likely to maintain the weakness at the end of last year. If the real estate side contributes – 20% of the demand growth, it needs 10-15% of the infrastructure and industrial growth to bring the total demand to positive growth. Steady growth will certainly stimulate infrastructure construction, but due to the industrial boom and high base in the first half of 21 years, it is difficult to achieve the above growth rate, so the demand in peak season will face the uncertainty of falsification. Although the total amount is facing uncertainty, structurally, the market continues to grow steadily with high transaction certainty. This week’s “counting from the east to the west” triggered hot spots related to iron and steel IDC, which is similar to the pipeline theme in the early stage. Such expected theme investment may bring phased trading opportunities for relevant stocks. In addition, the field of growing new materials focuses on Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Yongxing Special Materials Technology Co.Ltd(002756) , Fushun Special Steel Co.Ltd(600399) .
One week market review: this week, the Shanghai Composite Index rose 0.8%, the Shanghai and Shenzhen 300 index rose 1.08%, and the Shenwan steel sector rose 2.58%. This week, the main contract of rebar closed at 4779 yuan / ton, a decrease of 126 yuan / ton compared with last week, a range of 2.57%; the main contract of hot rolled coil closed at 4907 yuan / ton, a decrease of 126 yuan / ton compared with last week, a range of 2.5%; The main iron ore contract closed at 685 yuan / ton, a decrease of 120 yuan / ton over last week, an increase of 14.91%.
The trading volume is higher than that before the Spring Festival: the weekly average trading volume of national construction steel this week was 74400 tons, an increase of 17900 tons compared with that before the Spring Festival. The social inventory of the five varieties was 16.688 million tons, an increase of 1.3353 million tons month on month. At present, the pace of resumption of production and work in the downstream is slow. Although the trading volume of building materials is higher than that before the festival, it is slightly weaker than that in previous years. In terms of inventory, the resumption of work in the downstream led to an increase in the delivery of steel mills, the factory and warehouse showed a slight de stocking state, and the cumulative stock level of social warehouse was lower than that in the same period of previous years.
Electric furnace enterprises resumed production: this week, the blast furnace operating rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 69.58% and 36.51% respectively, with a month on week increase of + 1.39pct and + 2.38pct; This week, the blast furnace capacity utilization rates of mysteel247 steel enterprises and Tangshan Steel Plant were 75.44% and 52.14% respectively, with a month on month comparison of -1.13pct and -0.61pct last week. The operating rate of 71 home appliance arc furnaces this week was 15.96%, with a month on month increase of + 13.32pct; The capacity utilization rate was 15.63%, with a month on month increase of + 12.06pct. In terms of supply, with the start-up and operation of electric furnace enterprises this week, the marginal output of steel has improved, but the output of molten iron still shows a downward trend. Therefore, the main increment of supply comes from short process steel. In the future, with the switching between light and peak seasons, the output of long and short process steel is expected to increase.
Steel prices fell after continuous growth: the myspic comprehensive steel price index decreased by 1.92% month on week, including 1.92% for long materials and 1.93% for sectors. Shanghai deformed steel bar is 4850 yuan / ton, with a decrease of 90 yuan, or 1.82%. Shanghai hot rolled coil 4930 yuan / ton, down 200 yuan / ton from last week, an increase of 3.9%. Although there were frequent good news on policies this week, and some regions reduced the proportion of down payment and increased the loan amount of housing provident fund, the actual demand in the downstream is still in the off-season. In addition, affected by the sharp weakening of the decline period of raw materials, the market price rising atmosphere is weakened and the steel price has been corrected.
The ore price fell significantly, and the delivery volume rebounded month on month: platts62%130.5 US dollars / ton this week, down 19.5 US dollars / ton week on week. Last week, the shipment volume of Australia and Brazil was 18.245 million tons, a month on month decrease of 683000 tons, and the arrival volume was 11.977 million tons, an increase of 2.689 million tons. The latest steel mill imported ore inventory days are 35 days, 4 days less than the last time. Tianjin Zhunyi metallurgical coke was 2810 yuan / ton, unchanged from last week. Scrap steel is 3230 yuan / ton, a decrease of 20 yuan / ton compared with last week. Within the week, 12 departments including the national development and Reform Commission issued the notice on printing and Distributing Several Policies to promote the steady growth of industrial economy, which proposed to ensure supply and price stability and strengthen supervision and monitoring. The price of iron ore fell sharply. The policy will significantly suppress market sentiment in the short term, and pay attention to downstream demand in the medium term.
The profit per ton of steel continued to rise: raw materials fell sharply under policy supervision this week, and the profit of mainstream steel continued to rise. According to our simulated steel data, the ore price and coke price at the end of raw materials decreased during the week, and the billet cost decreased significantly. The weekly average price at the finished product end stabilized, and some steel grades made a slight correction, but the decline was far less than that at the cost end. The profit level per ton of steel continued to rise. Among them, the gross profit of hot rolled coil (3mm) increased by 82 yuan / ton, and the gross profit margin increased to 9.79%; The gross profit of cold rolled sheet (1.0mm) increased by 187 yuan / ton, and the gross profit margin increased to 6.13%; The gross profit of deformed steel bar (20mm) increased by 189 yuan / ton, and the gross profit margin increased to 11.6%; The gross profit of medium and heavy sector (20mm) increased by 181 yuan / ton, and the gross profit margin increased to 8.56%.
Risk tip: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase.
