Main points:
This week, the Shanghai Composite Index fell by 1.13%, and the Shanghai and Shenzhen 300 index fell by 1.67%. Steel sector fell by 1.86%; Among the sub sectors, the ordinary steel sector increased by 0.00%, and the special material sector decreased by 1.08%.
Steel market: the situation in Russia and Ukraine has disturbed the steel price in the short term, and the basic trend of industry production restriction + mine end cost reduction remains unchanged
Steel prices fell this week, with spot prices of rebar, hot rolling, cold rolling and medium sector falling by 2.06%, 2.26%, 1.07% and 0.79% respectively. Affected by international emergencies, the volatility of China’s bulk commodity market has weakened, which has formed negative factors for the steel market. In addition, at present, the downstream steel rolling enterprises have high cost pressure, meager profits and some losses, the overall production enthusiasm is limited, and the bullish sentiment in the raw material Market has been restrained.
In terms of special steel, under the guidance of high-quality development policy, subdivision tracks such as pipeline and steel structure deserve attention. From the perspective of new infrastructure construction, China’s pipeline has entered the upgrading stage, the construction of rural water supply and drainage system is rough, and the construction of urban sponge pipe network is also close at hand. It is suggested to pay attention to Xinxing Ductile Iron Pipes Co.Ltd(000778) , Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , etc.
As the core metal material in the field of new energy vehicles, electrical steel is also a sector worthy of attention. The rapid development of new energy vehicles has driven the downstream demand for electrical steel. At present, the valuation of the sector is generally not high, and it is optimistic about the electrical steel sector for a long time. It is suggested to focus on Baoshan Iron & Steel Co.Ltd(600019) , Maanshan Iron & Steel Company Limited(600808) , Beijing Shougang Co.Ltd(000959) , etc.
The price of rebar in the spot market this week was 461700 yuan / ton, with a weekly decline of 3.39%; The price of hot rolled coil was 489000 yuan / ton, with a weekly decrease of 1.41%; The price of cold rolled coil was 556000 yuan / ton, with a weekly decrease of 1.07%; The price of medium sector was 505000 yuan / ton, with a weekly decrease of 1.17%. In the futures market, the active contract price of rebar was 477900 yuan / ton, with a weekly decrease of 0.79%; The active contract price of hot rolled coil was 479600 yuan / ton, with a weekly decrease of 2.26%; The active contract price of wire rod was 492800 yuan / ton, with a weekly decrease of 2.67%. The myspic composite steel price index was 180.68 points, with a weekly decline of 0.90%, of which the myspic long material index fell 0.92% and the myspic flat sector index fell 0.87%.
Raw material Market: iron ore has gradually recovered, and the double coke market is stable and good
This week, the fluctuation of iron ore market intensified, and the market price of double coke increased steadily. In terms of iron ore, the Winter Olympics has ended, and many factories that have tightened production restrictions have returned to the normal production limit level. However, the overall market demand is still tepid. Although there is a good expectation of resumption of production, it is still affected by the overall trend of the market. In terms of double coke, with the closing of the Winter Olympic Games, the pace of resumption of production of steel mills has accelerated, the rigid demand of coke market has returned, the mentality of coke enterprises has improved significantly, and the supply and demand is oriented to good development. As of Friday, the price of Australian Pb powder in the spot market was 860.00 yuan / ton, with a weekly increase of 4.88%; The price of primary metallurgical coke was 291000 yuan / ton, with a weekly decrease of 0%; The price of main coking coal was 251100 yuan / ton, with a weekly decline of 1.82%. In the futures market, the active contract price of iron ore was 680.50 yuan / ton, with a weekly decline of 0.66%; The contract coke price was 318300 yuan / ton, with a weekly decrease of 4.00%; The active price of coking coal was 251150 yuan / ton, with a weekly decline of 1.82%.
Steel supply and demand: affected by the international situation, both supply and demand are weak
In terms of steel mill inventory this week, rebar, hot rolling and wire rod increased by 1.51%, 0.33% and 7.19%, while cold rolling and medium sector decreased by 5.08% and 2.41%. In terms of steel output this week, the inventory of cold rolling, medium and heavy sector, wire rod, medium and heavy sector and deformed steel bar decreased by 3.72%, 4.96%, 6.37%, 8.92% and 14.23% respectively. Under the influence of international emergencies, the market shocks and weakening operation have formed negative factors for the steel market. In addition, at present, the downstream steel rolling enterprises have high cost pressure, meager profits and some losses. The overall production enthusiasm is limited and the supply and demand are weak. It is expected that the steel market may continue to be weak in the future.
Investment advice
With the recovery of manufacturing demand superimposed on the background of carbon peaking and carbon neutralization, the profit logic of the steel industry has been reconstructed, and steel enterprises have further benefited from the cyclical rotation. We are still optimistic about the steel sector for a long time. The national defense, military industry and aerospace industry have a broad domestic substitution space, and products such as superalloy, special stainless steel and ultra-high strength steel occupy an absolute dominant position. It is suggested to focus on the performance of the interim report and the leader of special steel in fulfilling the industry’s high vision: Fushun Special Steel Co.Ltd(600399) ; Traditional field leaders + popular emerging business targets are more favored by the market. It is suggested to focus on stainless steel rods and wires and mica lithium extraction leaders: Yongxing Special Materials Technology Co.Ltd(002756) ; And the high growth leader in the field of cold-rolled stainless steel: Zhejiang Yongjin Metal Technology Co.Ltd(603995) .
Risk tips
Covid-19 epidemic situation is repeated; The economic downturn accelerated; The price of raw materials fluctuates greatly; The demand for real estate steel fell sharply; Steel destocking process is blocked.
