Investment suggestion: continue to be optimistic about steel stocks in the medium term. Against the background of historically high profits and historically low valuations, the carbon neutralization probability has brought the industry supply ceiling. In addition, the raw material side has contributed cost dividends again, and steel stocks will usher in a wave of plate opportunities for double rise in performance and valuation. Optimistic about undervalued plates, some high-quality long products and special steel. In the short term, it is the first to promote the double leading Inner Mongolia Baotou Steel Union Co.Ltd(600010) of rare earth steel, and pure steel stocks Hunan Valin Steel Co.Ltd(000932) , Xinyu Iron & Steel Co.Ltd(600782) , Baoshan Iron & Steel Co.Ltd(600019) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Citic Pacific Special Steel Group Co.Ltd(000708) ; It is recommended to pay attention to Angang Steel Company Limited(000898) , Beijing Shougang Co.Ltd(000959) , Nanjing Iron & Steel Co.Ltd(600282) , etc.
Industry view: disk profit returns to 1000 yuan / ton. With the implementation of the expected production restriction of the Winter Olympic Games and the steady growth of the central economic work conference, steel profits have expanded again recently, last week (December 4-December 10) after a lapse of two months, the disk profit of futures returns to 1000 + yuan / ton again, and the immediate gross profit of spot has returned to 1300 yuan / ton. At present, it is relatively certain that the profit of the steel sector will return to the high level again in the first quarter of 2022, and we expect it to significantly exceed 2021q3 and Q4. Compared with the current valuation close to the historical low and the oversold stock price, we think there are problems in the sector Obviously underestimated. Based on the relatively low inventory, improved demand expectations and upward policy expectations, we judged that the bottom of the steel plate was basically confirmed and entered the allocation range again.
Market review: last week, Shenwan steel rose 0.1%, leading the Shanghai Composite Index by 1.6%. The top gainers were Maanshan Iron & Steel Company Limited(600808) (4.3%), HTC mining (3.0%) and Zhejiang Yongjin Metal Technology Co.Ltd(603995) (2.7%). The quotation of main contracts of screw thread, hot coil, iron ore and coke futures last week changed by 0.1%, – 5.5%, 5.5% and 7.8% respectively compared with the previous week (November 27 – December 3); the profit of screw thread and hot rolling disk changed by 6.9% and – 16.9% respectively compared with the previous week.
Industry trends:
General steel: last week, the social inventory of steel was 9.63 million tons, a month on month decrease of 3.4%; Among them, the long timber inventory was 4.99 million tons, a month on month decrease of 6.7%; Plate inventory was 4.64 million tons, an increase of 0.5% month on month. In late November, the average inventory of steel mills was 12.48 million tons, a month on month decrease of 10.4%. After the blast furnace was eliminated last week, the capacity utilization rate was 62.3%, with a month on month decrease of 0.3pct; The shipment volume of 237 steel traders in China was 177000 tons, a month on month decrease of 3.8%; The cargo volume of terminal line screw in Shanghai was 17000 tons, a month on month decrease of 5.7%. The cost lag gross profit of thread, hot rolling, cold rolling and medium and heavy plate tracked last week were 910, 767, 764 and 969 yuan / ton respectively.
Overseas steel price: last week, China’s steel price composite index was 179.04, up 0.21% month on month; The hot rolling price difference between foreign countries and China is 435 US dollars / ton, and the price difference of deformed steel bar is 122 US dollars / ton.
Iron ore: last week, the shipment volume of iron ore from Australia, Pakistan and India was 27.9 million tons, an increase of 10.3% month on month; The arrival volume of 6 ports in the North was 10.11 million tons, an increase of 26.9% month on month. Last week, the iron ore port inventory was 154.85 million tons, up 0.2% month on month. Last week, the average daily dredging volume of Port imported ore was 2.8 million tons, up 1.35% month on month.
Coking coal and coke: the coke price remained stable last week, and the imported coking coal market operated in a differentiated manner this week. There were obvious differences in performance between different markets, the driving force was weakened, and the cost pressure of double coke reappeared. We expect the bifocal market to operate weakly and stably.
Ferroalloy: China’s silicon manganese was weak last week, waiting for external incentives. Ferrosilicon market operates weakly and stably, and the market quotation drops slowly. We expect that the demand for double silicon is still weak, it is difficult to improve in the short term, the market fundamentals continue to adjust, and the mentality is gradually pessimistic.
Special steel: last week, the market price of national excellent special steel increased slightly; The market price of die steel is generally stable, the price of individual cities is slightly loose, and the demand performance is weakening; The price of industrial materials was adjusted and operated in a narrow range. We expect the price of the national high-quality steel market to fluctuate and consolidate next week.
Stainless steel: nickel ore was under pressure last week, and the market was cold during the week; The supply of ferrochrome turned to the top and fell, and the demand for chrome ore drove the price upward; Stainless steel is weak and down, and the market confidence of raw material end is frustrated. We expect the price of stainless steel pipe to run weakly and stably.
Risk tip: real estate decline; The recovery of manufacturing industry was less than expected.
