This week’s view
Steel industry: short-term fluctuations will not affect the marginal improvement of fundamentals of the steel industry in 2022
As of December 24, the five major varieties of thread, hot coil, medium and heavy plate, cold rolling and wire rod reported 4857 yuan / ton, 4861 yuan / ton, 5092 yuan / ton, 5420 yuan / ton and 5211 yuan / ton respectively this week. The circumferential ratio decreased by 0.5%, 0.3%, 0.2%, 0.5% and 0.4% respectively. In terms of social inventory, the social inventory this week was 8.7851 million tons, with a decrease of 313300 tons on a weekly basis.
Gross profit per ton of steel fell. The gross profit per ton of steel for thread, hot coil, medium and heavy plate, cold rolling and wire rod was 579 yuan, 419 yuan, 443 yuan, 505 yuan and 803 yuan respectively, down 153 yuan, 122 yuan, 137 yuan, 125 yuan and 142 yuan compared with last week.
At present, the market is still in the game stage, and the steel price fluctuates. Last week, the price of raw materials increased, resulting in a decline in profit margin. We believe that the main logic of the industry is still clear, and “stabilizing the economy” will bring about the recovery of the demand side next year, which will be reflected in the moderately early commencement of key infrastructure projects, the marginal recovery of real estate and the return to normal production of industrial enterprises. The supply side will still be limited under the “double carbon”, the supply will be rigid, and the price of raw materials will maintain a reasonable position. Therefore, we believe that the short-term fluctuation of the industry will not affect the marginal improvement opportunities of the industry fundamentals at the cost side and both ends of supply and demand next year.
In addition, our first subdivided high-end variety of steel, electrical steel, is the core magnetic material driving modern industry. In particular, high-grade non oriented electrical steel for new energy vehicles has extremely high technical barriers. Baosteel and Shougang master the core technology. Since new energy vehicles can only use high-grade non oriented silicon steel instead of all varieties, the consumption of new energy vehicles will account for 10% of the output of high grades in 2020. In addition, the motor energy efficiency upgrading plan (2021-2023) has been released. The improvement of motor energy efficiency standards will bring a lot of demand for high-grade non oriented silicon steel. It is suggested to pay attention to the main targets of electrical steel: Beijing Shougang Co.Ltd(000959) , Baoshan Iron & Steel Co.Ltd(600019) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Xinyu Iron & Steel Co.Ltd(600782) , Maanshan Iron & Steel Company Limited(600808) .
Focus on the subject
Industrial plate companies: Beijing Shougang Co.Ltd(000959) , Hunan Valin Steel Co.Ltd(000932) , Nanjing Iron & Steel Co.Ltd(600282) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Maanshan Iron & Steel Company Limited(600808) , Baoshan Iron & Steel Co.Ltd(600019) , Xinyu Iron & Steel Co.Ltd(600782) , Angang Steel Company Limited(000898) .
Key special steel companies: Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Citic Pacific Special Steel Group Co.Ltd(000708) , Fushun Special Steel Co.Ltd(600399) , Jiangsu Toland Alloy Co.Ltd(300855) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) . Building materials companies: Fangda Special Steel Technology Co.Ltd(600507) , Sansteel Minguang Co.Ltd.Fujian(002110) , Sgis Songshan Co.Ltd(000717) .
Municipal pipeline material company: Xinxing Ductile Iron Pipes Co.Ltd(000778) , Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) , Ningxia Qinglong Pipes Industry Group Co.Ltd(002457) .
Nonferrous Industry: continue to be optimistic about the demand for magnetic materials under the new energy system and the demand for rare earth and lithium upstream raw materials
Lithium sector, spodumene quoted us $2455 / ton this week, up 4%; Lithium hydroxide quoted 199500 yuan / ton, up 2.6%; The quotation of battery grade lithium carbonate was 255000 yuan / ton, up 4.1%. In rare earth sector, praseodymium and neodymium oxide, dysprosium oxide and terbium oxide were quoted at 845000 yuan / ton, 2.89 million yuan / ton and 11.015 million yuan / ton this week, with increases and decreases of – 0.6%, – 0.7% and 0% respectively. The spot supply of raw materials in the upstream of new energy continues to be tight, and the state of continuous low inventory in the industrial chain will remain. Driven by the replenishment of inventory by downstream enterprises, we expect the price center of lithium and rare earth to continue to rise;
In the magnetic materials sector, the introduction of energy-saving motor policy under the guidance of double carbon and the pull of magnetic materials in the future rapid development of new energy, wind power and photovoltaic. We are optimistic about the pull of rare earth permanent magnet materials under the trend of high efficiency, energy saving and miniaturization of motors, and the pull of the demand for new high-efficiency soft magnetic materials silicon steel and metal soft magnetic powder cores in the new energy era;
In terms of industrial metals, SHFE copper prices rose 0.55% this week to close at 69750 yuan / ton; SHFE aluminum price rose 2.36% to close at 20185 yuan / ton. This week, the central bank announced that it would cut the one-year LPR5 basis points, which verified the stability of the central economic work conference, revisited the macro direction of “economic construction as the center”, and the demand for bulk metal raw materials such as copper and aluminum is expected to improve. In terms of copper, on December 22, Peruvian protesters agreed to temporarily lift the blockade on Las bambas copper mine; Due to the characteristics of high energy consumption of aluminum, the sharp rise of natural gas prices and electricity prices in Europe has obviously promoted the sharp rise of aluminum prices. At present, the price of alumina has dropped and the price of aluminum has rebounded. So far, the average profit of simulated electrolytic aluminum industry has reached 2578 yuan / ton, and the profit of electrolytic aluminum has continued to improve. At present, regardless of upstream mining, beneficiation and metallurgy or midstream processing, the valuation of basic metal related targets has reflected extremely pessimistic expectations. In the future, it is expected to usher in fundamental repair and superimposed valuation repair, and the metal raw material industry will usher in a new round of market.
Focus on the subject
China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) 、 Ganfeng Lithium Co.Ltd(002460) 、 Tianqi Lithium Corporation(002466) 、 Qinghai Salt Lake Industry Co.Ltd(000792) 、 Shenghe Resources Holding Co.Ltd(600392) 、 Rising Nonferrous Metals Share Co.Ltd(600259) 、 China Minmetals Rare Earth Co.Ltd(000831) 、 Poco Holding Co.Ltd(300811) 、 Hengdian Group Dmegc Magnetics Co.Ltd(002056) 、 Ningbo Jintian Copper (Group) Co.Ltd(601609) 、 Zhejiang Hailiang Co.Ltd(002203) 、 Guangdonghectechnologyholdingco.Ltd(600673) 、 Kbc Corporation Ltd(688598) 、 Zijin Mining Group Company Limited(601899) 、 Western Mining Co.Ltd(601168) 、 Aluminum Corporation Of China Limited(601600) 、 Yunnan Aluminium Co.Ltd(000807) 、 Henan Shenhuo Coal&Power Co.Ltd(000933) 。
Risk tips: the risk of sharp fluctuation in the price of upstream raw materials, the risk that the downstream demand is less than expected, and the risk of continuous spread of overseas epidemic.
