Market review:
As of the closing on December 24, the steel sector fell 3.99% in the week, the CSI 300 index fell 0.67%, and the rise of the steel sector lagged behind the CSI 300 index by 3.32%. From the sector ranking, the steel industry ranked 29th among Shenwan 31 sectors last week, with an increase of 30.89% year to date, ranking 6th among Shenwan 31 sectors.
Talk every Monday:
The ten day output of crude steel fell month on month, and the output of Tangshan Handan was limited again: according to the data of China Steel Association, the average daily output of crude steel of key steel enterprises was 1.8905 million tons in mid December 2021, Ten day month on month ratio was -2.66% (-15.32 PCT), year-on-year ratio was -14.13% (-1.95 PCT). Therefore, it is estimated that in December (to the middle of the year) the daily output of crude steel in China was 2.4231 million tons, a month on month increase of + 4.88%; according to the data of the Bureau of statistics, the cumulative output of crude steel from January to November was 946 million tons, a year-on-year decrease of 2.6%. Assuming that the crude steel output in December increased by 5% compared with that in November, the annual crude steel output will reach 1.019 billion tons, a year-on-year decrease of 4.29%; after Tangshan launched the secondary emergency response for heavy pollution on the 19th, Handan issued a communication on strengthening control of adverse meteorological conditions It is known that during the period, the blast furnace that does not undertake the heating task will be stuffy. It is expected that the pressure of subsequent sintering and blast furnace production restriction in the north will still exist. With the implementation of the production restriction policy in the second stage of the heating season, the supply end will remain weak; It is worth noting that the National Conference on industry and information technology on December 20 did not mention the production restriction orientation of crude steel production in 2022, and continued to pay attention to the follow-up trend of crude steel production restriction policy under the guidance of steady growth policy;
Downstream demand gradually weakened, Pay attention to the investment expectation at the beginning of next year: last Friday, the apparent consumption of large varieties of steel was - 4.8% (- 5.13pct), year-on-year -13.51% (- 4.2pct), and the apparent consumption of deformed steel was - 4.78% (- 1.67pct), year-on-year -19.78% (- 2.77pct), the off-season of demand is coming gradually, and the enthusiasm of merchants for winter storage is weaker than that in previous years; the long-term pessimistic expectation of real estate continues to be revised in the near future, and the intensity of fiscal expenditure is further improved. The more positive wording on infrastructure in the central economic work conference promotes the improvement of medium and long-term demand expectation of iron and steel, waiting for further observation of the pulling effect of investment on demand in next spring; coke price this week Keep stable, the iron ore rebounded slightly, the steel profit fell slightly, but it is still on the high side. The short-term coke price is expected to maintain a stable operation. At the same time, the suppression of the price by the high inventory of iron ore still exists. We maintain our previous judgment, the collapse of the cost side is still continuing, and the steel profit is expected to remain high;
Market impact: the profitability of steel is high, the cost collapse continues to improve the overall valuation of the industry, and the expectation of real estate infrastructure investment is significantly improved. Pay attention to the inflection point of investment at the beginning of next year and the guidance of industrial production restriction policy in 2022. Stainless steel processing enterprises with anti cycle and growth attributes have significant investment value;
Investment strategy: focus on recommending Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) industrial material processing targets with growth potential benefiting from the recovery of manufacturing industry, and continue to recommend Xinyu Iron & Steel Co.Ltd(600782) plate targets with significant valuation advantages;
Risk tip: policy implementation is less than expected, supply contraction is limited, and demand is less than expected.
