Since late November, steel ETF has risen by more than 10%. At the same time, the share prices of Listed Companies in the steel industry have also stepped out of the bottom and ushered in a wave of rising market. So is this wave of market "rebound" or "reversal"?
In this regard, Wang Guoqing, director of Lange Iron and Steel Research Center, said in an interview with Securities Daily, "The recovery of real estate credit financing and the continuous acceleration of the issuance of new special bonds by local governments are conducive to the gradual implementation of major projects and the recovery of infrastructure investment, and the market optimism is significantly improved. At the same time, with the upcoming release of the carbon peak scheme for key industries, the carbon emission reduction constraints of the iron and steel industry will be more systematic and strict, resulting in the market's expectation of the bottom of steel price And drive investors to pay attention to the market performance of steel stocks. "
multiple factors boost industry confidence
On December 6, the people's Bank of China announced that it would reduce the deposit reserve ratio of financial institutions by 0.5 percentage points on December 15, 2021. After the reduction, the weighted average deposit reserve ratio of financial institutions is 8.4%, and the reduction is expected to release about 1.2 trillion yuan of long-term funds.
Ge Xin, a researcher at Lange Research Center, told the Securities Daily, "the RRR reduction will release about 1.2 trillion yuan of long-term funds, which will form a strong support for China's steady economic growth, alleviate the market demand for funds at the end of the year, and boost the confidence of China's steel market."
In addition, the recovery of downstream demand has also formed an effective support for China's steel market. Ge Xin believes that, "According to statistics, the monthly financing of real estate enterprises increased by 55% month on month in November, which will promote the construction progress of real estate projects and the promotion of new projects. Since August, the issuance of local bonds is accelerating month by month. At the same time, since mid November, the Ministry of finance has begun to release the financial budget funds for 2022 in advance, which will help speed up the development of major projects in China during the 14th five year plan Construction progress. "
"Overall, the availability of various funds will have a positive impact on the demand of China's steel market next year." Ge Xin concluded.
low carbon transformation helps valuation repair
The implementation plan of carbon peak in China's iron and steel industry and the basic formation of carbon neutralization technology roadmap will further build the bottom expectation of the iron and steel industry. Wang Guoqing believes that with the promotion of "carbon peaking and carbon neutralization", new energy application and low-carbon technology research and development will become important development potential areas of some enterprises, so as to promote the competitiveness of enterprises and realize sustainable development.
"Low carbon development will reshape the traditional smelting technology, product structure and energy structure of the iron and steel industry. Although it still focuses on early research and development and investment, in the long run, the application of clean energy in the iron and steel industry and the deepening of circular economy will help the company reduce energy costs." Wang Guoqing said that in terms of low-carbon transformation, the leading steel enterprises with early layout have occupied the first mover advantage.
Taking Hunan Valin Steel Co.Ltd(000932) as an example, since the 13th five year plan, the company has taken measures to improve resource and energy utilization efficiency, increase scrap utilization, improve energy management level and promote ultra-low emission transformation, and achieved remarkable results in energy conservation, emission reduction and environmental remediation. Hunan Valin Steel Co.Ltd(000932) Luo Guiqing, the Secretary of the board of directors, told the reporter of Securities Daily that in 2020, the self generating proportion of Hunan Valin Steel Co.Ltd(000932) main subsidiaries Valin Xianggang and Valin LIANGANG will reach the advanced level in the industry (the self generating proportion is about 70%).
In addition, the "product structure adjustment and upgrading project guided by advanced steel materials" with an investment of 2.25 billion yuan by Hualing Lianyuan Steel is being promoted in an intense and orderly manner. The production products mainly include electrical steel, medium and high carbon steel, cold rolling and deep processing steel, hot-rolled commodity materials, etc., focusing on the development, production, optimization and upgrading of steel products in the fields of construction machinery, high-end equipment, new energy and so on. With the project reaching production capacity, the proportion of medium and high-end steel will be further increased.
"The change of energy structure can not only promote the low-carbon transformation of the iron and steel industry, but also bring profound changes to the demand structure of the iron and steel industry." Wang Guoqing pointed out that the development of new energy will bring rapid growth in the demand for steel for wind energy and Cecep Solar Energy Co.Ltd(000591) power generation equipment, and the demand for wide and thick plates for wind power with high added value and high-end non oriented electrical steel has broad prospects; The demand for high-strength, lightweight, corrosion-resistant and fatigue resistant steel structure support used in photovoltaic power generation will also be greatly increased.
Wang Guoqing said, "under the pressure of carbon peak transformation, the proportion of low-carbon, environmental protection and higher value-added products in the revenue of iron and steel enterprises is increasing. With the expansion of the application of these high value-added products in high-end equipment, new energy and other fields, the market's understanding of traditional iron and steel enterprises will also be reshaped, and its valuation is expected to usher in reconstruction and repair."
(Securities Daily)
