Key investment points
Iron and steel: the year-on-year growth rate of iron and steel demand in 2021 is negative, but the profit per ton of steel in the industry is rich, mainly due to the administrative production restriction at the supply side. Therefore, the trend of production restriction policy in the future is very important to the industry fundamentals. From the perspective of recent policy spirit, we expect that administrative production restriction may be loosened in 2022. On December 14, the national development and Reform Commission and the Ministry of industry and information technology jointly issued the notice on the implementation plan for invigorating industrial economic operation and promoting high-quality industrial development, which proposed to “ensure the supply and stable price of bulk raw materials”. The future output reduction policy was not mentioned in the National Conference on industry and informatization on December 20, and the output reduction policy was first put forward at the conference at the end of 2020. With the increasing downward pressure on the economy, steady growth returns to the focus of the policy, while administrative production restriction is a contractive policy, which is inconsistent with the spirit of steady growth. In addition, the steel demand has entered a negative growth state since the third quarter of 2021. Even if there is no administrative production restriction, the output will naturally shrink with the demand, and the necessity of administrative production restriction has been weakened. If there is no administrative production restriction, the profit per ton of steel may fall significantly. The annualized effective capacity affected by administrative production restriction reaches 10% and periodically exceeds 20%. If there is no administrative production restriction, the effective capacity will increase by 10% in 2022, superimposed with negative demand growth, the degree of steel surplus may increase significantly in 2022, and the effective capacity utilization rate will fall back to the level of 2014-2016. Another reference time point is June 2021, when the administrative production restriction expectation was loosened in stages, which immediately led to the sharp contraction of the profit per ton of rebar to the level of – 200 yuan. For iron ore, even if the production restriction is relaxed, the demand for iron ore will not be significantly increased, The decline of steel production in the second half of 2021 is not caused by administrative production restriction (it is caused by demand contraction), so the relaxation of production restriction will not increase steel production (the proportion of blast furnace steel in the structure may increase slightly), the demand for iron ore will not improve much. In addition, the ore price itself is falsely high, and the long-term downward pressure on iron ore price has not changed. It is suggested to look for opportunities in the growing new material industry and pay attention to Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Fushun Special Steel Co.Ltd(600399) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Yongxing Special Materials Technology Co.Ltd(002756) .
Coal: pay attention to the increase of daily coal consumption caused by the cold wave. Power coal: coal prices continue to decline, and the cold wave will drive the daily consumption to increase. This week, the price of 5500 kcal thermal coal produced in QinGang Shanxi was 940 yuan / ton, down 140 yuan / ton on a weekly basis, continuing the decline. In terms of supply, the supply guarantee policy has not been withdrawn, the overall supply is abundant, the wait-and-see in the downstream market is still obvious, and the procurement scale has not been significantly improved; Beigang’s price weakened and its willingness to ship increased, but the inventory of downstream power plants was high, the procurement slowed down, and the import and export volume of the port declined; With the advancement of environmental protection and safety inspection, some areas have reduced production and stopped production due to over production. In terms of demand, the inventory of power plants decreased slightly. As of December 23, the coal inventory of power plants in eight coastal provinces was 34.844 million tons, and the daily consumption was 2.144 million tons. The daily consumption increased slowly. At present, the inventory is still high, and the cold wave warning rose to yellow at the end of the year, which is expected to drive the daily consumption to rise. Internationally, Australia is affected by rain, production and transportation are affected, and international coal prices have risen recently. Overall, follow-up attention will be paid to the cold wave weather and inventory consumption. At present, high calorie coal is still scarce, and the cold wave may drive the coal inventory consumption faster. In terms of coking coal, both supply and demand support the continuous improvement of the market. The price of mainstream coking coal rebounded this week, Price increase of Shanxi produced main coke coal depot in Jingtang Port (tax included) 2450 yuan / ton, up 100 yuan / ton on a weekly basis. On the supply side, the supply in the main production areas decreased due to the increased safety inspection and the automatic production reduction and maintenance of some coal mines. On the import side, the customs clearance at Ganqi Maodu port remained at about 100 vehicles, still at a low level, and the downstream procurement was active. However, the available resources of Mongolian coal were limited, superimposed on the strong operation of China’s coking coal price, and the price of Mongolian coal was stable Set at a recent high. In terms of demand, due to the gradual decline of inventory and the tightening of supply, the downstream coke enterprises have a strong willingness to replenish the storage in winter, and the coke plant has significantly improved its enthusiasm to sign bills, supporting the good operation of coal prices. Overall, China’s coking coal market continued to improve, supply continued to tighten, purchase willingness was strong, coal prices continued to rise, and follow-up continued to pay attention to the downstream coke demand. In terms of coke, the supply continued to tighten and the demand for replenishment increased. As of December 24, the price of secondary metallurgical coke in Tangshan was 2560 yuan / ton, unchanged on a weekly basis, and the national average profit per ton of coke was about 88 yuan / ton. In terms of supply, due to the impact of environmental protection policies, some coke enterprises in Shanxi have been shut down. With the advent of the Winter Olympic Games, the intensity of production restriction has increased, and the short-term supply will continue to be tightened. Last week, coke enterprises in the origin increased by 100-200 yuan / ton. Some steel mills and traders have implemented price increases, and most other mainstream steel mills mainly wait and see. In terms of demand, considering the impact of weather and environmental protection on uncertainty in the later stage, downstream steel mills have increased replenishment efforts and actively inquired for goods, and the inventory of some steel mills has risen to a medium high level. On the whole, coke has a strong willingness to increase. Under the condition of actively replenishing storage, some steel mills have had a dark rise. Follow up attention will be paid to the resumption of production of steel mills and the impact of raw coal rebound. Thermal coal stocks are recommended to pay attention to: Shaanxi Coal Industry Company Limited(601225) , Yanzhou Coal Mining Company Limited(600188) , China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , power investment and energy, Beijing Haohua Energy Resource Co.Ltd(601101) . Metallurgical coal stocks are suggested to pay attention to: Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Jizhong Energy Resources Co.Ltd(000937) , Shanxi Coking Co.Ltd(600740) . Anthracite recommended attention: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . Coke stocks are recommended to pay attention to: Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015)
Nonferrous Metals: China rare earth group was officially established and the industry pattern was reshaped. New energy continued its high boom and the price transmission of the industrial chain was smooth. In November, China completed the production and sales of 434000 and 427000 new energy vehicles respectively, with a year-on-year increase of 1.3 and 1.2 times respectively. A battery factory in Guangdong plans to increase the battery price, and the price transmission of the industrial chain is smooth. The price of lithium carbonate hit a record high. This week, the price of battery grade lithium carbonate increased by 10.0% compared with last week, and the price exceeded 250000 yuan / ton. The quotation of battery grade lithium hydroxide increased by 4.4% compared with last week, and the quotation of spodumene was flat compared with last week; With the tightening of raw materials, cobalt prices may rise further. This week, The quotation of MB cobalt (standard grade) and MB cobalt (alloy grade) increased by 1.3% and 1.3% month on month respectively, and the tax price of China’s metal cobalt has reached 536000 yuan / ton; China’s metal cobalt, cobalt sulfate and cobalt trioxide increased by 0.7%, 1.5% and 3.5% respectively; rare earth permanent magnet entered the “simultaneous rise of volume and price” In the spot market, the quotation of praseodymium and neodymium oxide in China fell by 1.5%. In terms of policy, China rare earth group was officially listed in Ganzhou, reshaping the industry pattern. The shortage of antimony raw materials remains unchanged. The price of antimony concentrate in China was 57000 yuan / ton, up 0.88% from last week; The price of antimony ingot was 73500 yuan / ton, up 0.68% from last week. Europe’s energy problems continued to ferment, driving up the price of basic metals. The impact of the European energy crisis on the rise of electricity prices continued to ferment. Copper prices rose with aluminum and zinc. LME copper, aluminum, lead, zinc, tin and nickel rose or fell by 2.0%, 4.2%, – 1.6%, 4.1%, 0.4% and 2.2% respectively this week. The price rose as a whole.
Building materials: this week’s view: many places have introduced house purchase subsidy policies. At the same time, the CIRC of the central bank encourages real estate project mergers and acquisitions. The margin of real estate policy is good. The real estate chain is expected to be repaired, and the price rise is gradually falling / the price of raw materials is falling. Brand building materials are gradually entering the layout time point, with high dragon head certainty. The prosperity of carbon fiber / quartz sand / glass fiber continues and continues to be recommended. The price of glass plate rebounded at the bottom, focusing on the expansion of new categories such as photovoltaic, electronics and pharmaceutical glass. The expected marginal improvement of real estate + the acceleration of special bond issuance is expected to support the cement demand. At present, the valuation of the cement sector is cost-effective, and the leader of volume increase logic is preferred. The cost side of the water reducing agent sector is declining rapidly, and the leader with new category expansion logic is preferred. 1) For the carbon fiber industry, We believe that the investment logic of the civil carbon fiber industry lies not only in the high demand growth (wind, light, hydrogen, etc.), but also in the “favorable climate, geography and people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence. Under the barriers of high technology, technology and capital, we will get the “raw silk” Those who win the world. In the medium and long term, with reference to glass fiber, the penetration rate of the industry increases or depends on changing “price” for “demand”. We suggest paying attention to the carbon fiber leader Zhongfu Shenying (to be listed), Weihai Guangwei Composites Co.Ltd(300699) , precursor leader Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Sinofibers Technology Co.Ltd(300777) , Hengshen Co., Ltd.; carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; downstream composite manufacturer Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new material, etc. 2) For consumer building materials, on the one hand, the end of the real estate policy has been realized, the financing end of the real estate industry has improved significantly, and the pessimistic expectation of the real estate chain is expected to continue to repair. On the other hand, with the gradual implementation of price increases and the decline of raw material prices, we judge that the profitability of consumer building materials is expected to gradually improve, and the industry will gradually enter the layout time point. Consumer building materials leaders have advantages in brand / Channel / cost / capital. They have the ability to cross the cycle in terms of competitiveness and growth, focusing on leading enterprises Beijing New Building Materials Public Limited Company(000786) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Skshu Paint Co.Ltd(603737) , Monalisa Group Co.Ltd(002918) , Keshun Waterproof Technologies Co.Ltd(300737) , Guangdong Dongpeng Holdings Co.Ltd(003012) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Yonggao Co.Ltd(002641) , Wangli Security & Surveillance Product Co.Ltd(605268) . 3) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, the supply side is newly added or limited, and the price of quartz sand is expected to rise steadily; The demand for semiconductors and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share, and Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) are mainly recommended. 4) For the glass fiber industry, roving prices are running smoothly this week, and electronic yarn is slightly loose. We expect that the new production capacity of roving in 21q4-22 will be limited to 260000 tons, and the demand will continue to improve. Under the low inventory level, the high outlook of roving is expected to continue. We expect that in 21q4-22, the new production capacity of electronic yarn will be about 150000 tons, and there will still be new production at the supply end. It does not rule out that the subsequent electronic yarn prices will still be loose, but it is expected that the overall production capacity will remain at a good level in 22 years. Focus on China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) , Jiangsu Changhai Composite Materials Co.Ltd(300196) , Shandong Fiberglass Group Co.Ltd(605006) . 5) For the glass industry, we judge that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the current high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, according to the data of China State Construction Engineering Corporation Limited(601668) and Industrial Glass Association, in the production line, the production capacity with kiln age of 8-10 years / more accounts for 14.1% / 14.5% respectively, and the cold repair of the old production line may lead to supply contraction. At present, the price and cost of glass are close. Under the high cost of raw materials / energy, manufacturers are willing to support the price, and the glass price is expected to maintain a good level. Focus on the medium and long-term growth brought by various types of glass (photovoltaic, electronic, pharmaceutical glass, etc.); focus on Zhuzhou Kibing Group Co.Ltd(601636) , and suggest paying attention to Csg Holding Co.Ltd(000012) , Xinyi Glass, Luoyang Glass Company Limited(600876) Wait. 6) For the cement industry, the quota of new special bonds will be issued in advance in 2022, the infrastructure is expected to gradually develop, the marginal relaxation of the real estate financing end may lead to the expected improvement of the market, and the cement demand is expected to be supported; In addition, the role of policy regulation of coal price has been fully demonstrated. When the cement price center is expected to remain high, the cost pressure of enterprises is expected to ease month on month. We continue to be optimistic about the valuation and repair opportunities of the cement sector, focusing on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Guangdong Tapai Group Co.Ltd(002233) , Xinjiang Tianshan Cement Co.Ltd(000877) , and it is suggested to focus on Gansu Shangfeng Cement Co.Ltd(000672) , Jiangxi Wannianqing Cement Co.Ltd(000789) and China building materials. 7) For the water reducing agent industry, the price of raw material ethylene oxide has dropped by about 25% from a higher point, and there is still a possibility of decline; By the end of September, the centralized price increase of major manufacturers is expected to be gradually implemented, and the industry profit is expected to improve. Leading companies have obvious competitive advantages, and new products benefit from the improvement of downstream demand, which is expected to maintain high growth. It is mainly recommended Sobute New Materials Co.Ltd(603916) . 8) It is suggested to pay attention to Zhejiang Walrus New Material Co.Ltd(003011) : the company is the leader in the production and export of PVC flooring, and the growth elasticity of production capacity will be highlighted in the future. Although in the early stage, due to the rise of raw material prices, exchange rate and shipping pressure, the profit is under pressure, but at present, the export chain benefits from a high outlook and the sea freight decreases, the enterprise gradually adjusts the price, the cost side also drops, and the profit is expected to be gradually repaired.
Chemical industry: the leading value crosses the cycle and actively embraces the opportunities of new materials: the medium-term recovery of crude oil is expected. It is suggested to pay attention to Offshore Oil Engineering Co.Ltd(600583) . The traditional bulk is still looking for the bottom, and the leading value crosses the cycle. Affected by the economic cycle and the global spread of the epidemic, traditional bulk products in the chemical industry are in a downward trend. As the main body of the chemical industry, the PPI of chemical raw materials and chemical products manufacturing industry in November 2021 increased by 29.6% year-on-year, which was positive for 11 consecutive months. It is suggested to pay attention to the leading enterprises with excellent quality and core competitiveness: in the downward period of the cycle, the leading enterprises expand their advantages, and the valuation is obviously low, or cross the cycle, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Zhejiang Nhu Company Ltd(002001) , Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) , Hengli Petrochemical Co.Ltd(600346) .
New materials: actively embrace industrial innovation and supply chain reconstruction. Scientific and technological progress promotes the innovation of terminal demand and drives the upgrading and development of high-end manufacturing industry. In this process, industrial innovation will put forward higher requirements for material properties and promote the rapid development of new material industry. It is suggested to focus on the subject of industrial innovation and supply chain reconstruction: Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Sinocera Functional Material Co.Ltd(300285) , Valiant Co.Ltd(002643) . In addition, it is recommended to focus on high-quality growth companies: Zhejiang Hailide New Material Co.Ltd(002206) .
Risk tip: macroeconomic downside risk; The epidemic has led to lower than expected demand; Risk of relaxation of production restriction and new production capacity; Risk of poor capital turnover of 2B end Enterprises
