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: fundamentals have improved significantly. Recently, the industry fundamentals are still good. The expected resumption of steel plant production in the early market has been falsified, the industry operating rate and steel output remain low, the growth rate of total steel inventory has been negative for two consecutive weeks, and the corresponding steel gross profit has remained at a high level of 1300 yuan / ton. Looking forward to the next two months, affected by the Winter Olympics and the production restriction in the heating season, the supply will continue to be low. After the spring, with the switching between the light and peak seasons of demand, the iron and steel industry will probably start a round of industrial chain inventory replenishment, be optimistic about the performance of steel price and steel profit, and reiterate the judgment that it is optimistic about the significant improvement of the performance of iron and steel 2022q1. The steel plate is suppressed by the pessimistic expectation of real estate, and the trend may fluctuate, but on the whole, the bottom probability has appeared. In the follow-up, we focused on the performance forecast, dividend and other plate catalysts, and were relatively optimistic about the common steel stocks with individual alpha and high elasticity.
Market review: this week (December 20-december 24, 2021, the same below), Shenwan iron and steel fell 4.0%, 3.6% behind the Shanghai Composite Index. The top gainers were Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) (12.8%), HTC mining (7.5%) and Sgis Songshan Co.Ltd(000717) (5.6%). The quotation of main contracts of thread, hot coil, iron ore and coke futures this week was month on month (from December 11 to December 17, the same below) changed by – 1.1%, – 2.9%, 2.9% and 1.1% respectively; the profits of thread and hot rolling plate changed by – 6.9% and – 14.0% respectively compared with last week.
Industry trends:
General steel: the social inventory of steel this week was 8.78 million tons, a month on month decrease of 3.5%; Among them, the long timber inventory was 4.39 million tons, a month on month decrease of 4.7%; Plate inventory was 4.39 million tons, a month on month decrease of 2.2%. In mid December, the average inventory of steel mills was 13.57 million tons, an increase of 1.7% month on month. After the elimination of blast furnace this week, the capacity utilization rate was 61.1%, with a month on month decrease of 1.4pct; The shipment volume of 237 steel traders in China was 159000 tons, a month on month decrease of 3.3%; The cargo volume of terminal line screw in Shanghai was 16000 tons, a month on month decrease of 9.4%. The cost lag gross profit of thread, hot rolling, cold rolling and medium and heavy plate tracked are 1261, 1163, 1113 and 1308 yuan / ton respectively.
Overseas steel price: this week, China’s steel price composite index was 179.72, up 0.29% 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: this week, the shipment volume of iron ore from Australia, Pakistan and India was 25.77 million tons, up 14.4% month on month; The arrival volume of 6 ports in the North was 10.61 million tons, up 13.9% month on month. This week, the iron ore port inventory was 155.13 million tons, a month on month decrease of 1.2%. This week, the average daily dredging volume of Port imported ore was 2.98 million tons, up 4.23% month on month.
Coking coal and coke: the coke market is running stably this week; The supply and demand of coking coal market is good, and the coal price may continue to rise. We expect the coke market to be stable and strong in the short term, and the spot price of coking coal to be strong.
Ferroalloy: silicon manganese fluctuated this week, and the market mentality improved slightly; Ferrosilicon market remained weak and stable, and the market turnover was relatively cold. We expect the stalemate between the buyer and the seller to open, and the spot price of ferrosilicon will fluctuate in a narrow range stimulated by futures and news in the short term.
Special steel: the market price of die steel was partially adjusted this week, and the transaction was not satisfactory; The price of mainstream varieties of Youte steel increased slightly; Industrial wire prices rose and fell. We expect that the price of die steel will be stable and weak, and the trading volume will continue to decline; The market price of Yougang is mainly high and volatile; The market price of industrial wire rod is in a dilemma.
Stainless steel: the price negotiation of nickel ore is still cold this week, the price of chromium ore rises slightly, and the inventory of stainless steel is low. We expect the price to be stable and strong.
Risk tip: real estate decline; The recovery of manufacturing industry was less than expected.
