Main points:
This week, the Shanghai Composite Index fell 0.11% and the Shanghai and Shenzhen 300 index fell 1.68%. Steel sector fell by 0.28%; Among the sub sectors, the ordinary steel sector increased by 0.00%, and the special material sector decreased by 5.72%.
Steel market: the two sessions set the tone to stabilize infrastructure + guarantee supply, and the iron and steel industry will develop with energy conservation, carbon reduction and high quality
The two sessions emphasized steady growth. The qualitative and quantitative statements on steady growth in the government work report are good for the downstream demand of steel and the stable supply of supply chain. The government work report on March 5 laid the tone for steady growth. In terms of downstream demand, the work report proposed: 1) we should carry out infrastructure investment moderately ahead of schedule around the major national strategic deployment and the 14th five year plan; 2) It is planned to arrange local special bonds of 3.65 trillion yuan to start a number of qualified major projects, new infrastructure, transformation of old public facilities and other projects; 3) Adhere to the principle of housing without speculation, stabilize land prices, house prices and expectations; 4) We will start rebuilding a number of old urban communities. Superimposed on this year's overall GDP growth rate of 5.5%, general public financial expenditure increased by 8.4% year-on-year, and the expenditure scale expanded by more than 2 trillion, the fiscal expenditure multiplier effect and specific favorable policies for demand have a good boost to the demand for steel. In terms of supply, recently, the state has repeatedly interviewed iron ore and coal related enterprises to ensure stable supply and price stabilization, which is also good for the cost side of steel. The work report also proposes to strengthen the supply guarantee of raw materials and enhance China's resource production guarantee capacity.
Steel prices generally rose this week, with spot prices of rebar, hot rolling, cold rolling and medium sector rising by 3.58%, 6.13%, 1.98% and 1.78% respectively. In terms of breakdown categories: in terms of hot-rolled sectors and coils, emergencies have brought about the growth of export demand and stimulated the rise of steel prices in China, and the international situation will still be one of the important determinants in the later stage; In terms of scrap steel, the steel price has risen recently, the profits of steel mills have rebounded, and the price difference of superimposed scrap iron has widened, which is good for scrap steel; In terms of medium and heavy sector, due to the relaxation of production restriction in the north, the overall capacity utilization rate of steel mills has rebounded. At the same time, the inflection point of social inventory appeared earlier this year, the downstream is also returning to work one after another, and the trading atmosphere has gradually improved.
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) , Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) , 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 pay attention to 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 492000 yuan / ton, with a weekly decline of 3.58%; The price of hot rolled coil was 519000 yuan / ton, with a weekly decrease of 6.13%; The price of cold rolled coil was 567000 yuan / ton, with a weekly decrease of 1.98%; The price of medium sector was 514000 yuan / ton, with a weekly decrease of 1.78%. In the futures market, the active contract price of rebar was 490100 yuan / ton, with a weekly decrease of 6.15%; The active contract price of hot rolled coil was 521000 yuan / ton, with a weekly decrease of 8.63%; The active contract price of wire rod was 550600 yuan / ton, with a weekly decrease of 11.73%. The myspic composite steel price index was 185.27 points, with a weekly decline of 1.88%, of which the myspic long material index fell 0.88% and the myspic flat sector index fell 3.08%.
Raw material Market: the scrap steel market price fluctuated, and the double coke market was stable, medium and strong. This week, the scrap steel market price fluctuated, and the double coke market price increased steadily. In terms of scrap steel, the mainstream quotation in the steel market has opened slightly higher recently, the demand for finished products has increased, the profits of steel mills have rebounded, and the price difference of superimposed iron scrap has widened, which is good for scrap steel, thus boosting the scrap steel market. The price of scrap steel is expected to fluctuate in the short term. In terms of double coke, the operating rate of coke enterprises increased, the inventory maintained a low level, and the shipment was slow. Near the two sessions, the environmental protection measures remained relatively loose. The resumption of production of steel mills was in good condition. Most of them had started normally, just needed to pick up, and had a strong mentality of coke procurement. The coke market is expected to be strong in the short term.
As of Friday, the price of Australian Pb powder in the spot market was 981.00 yuan / ton, with a weekly increase of 14.07%; The price of primary metallurgical coke was 331000 yuan / ton, with a weekly decrease of 13.75%; The price of main coking coal was 260000 yuan / ton, with a weekly decline of 18.18%. In the futures market, the active contract price of iron ore was 812.50 yuan / ton, with a weekly decline of 19.40%; The contract coke price was 358500 yuan / ton, with a weekly decrease of 12.63%; The active price of coking coal was 286850 yuan / ton, with a weekly decline of 14.21%.
Steel supply and demand: the steel market has a preference for supply and demand fundamentals, and we need to continue to pay attention to the impact of the situation in Russia and Ukraine
In terms of steel mill inventory this week, wire rod and medium and heavy sector increased by 0.02% and 1.47%, while rebar, hot rolling and cold rolling decreased by 0.13%, 5.27% and 5.30%. In terms of steel output this week, the output of cold rolling, medium and heavy sector, wire rod, medium and heavy sector and rebar decreased by 4.14%, 0.91%, 10.59%, 5.89% and 14.05% respectively. At present, the steel market has a preference for supply and demand fundamentals, but there is no obvious gap in supply. The situation in Russia and Ukraine still has a great impact on commodity prices and needs continuous attention. At the same time, beware of the rise of speculation in some black varieties, and the regulators may strengthen the policy of "ensuring supply and stabilizing price". In the short term, the steel price may continue to operate strongly, so it is not suitable to chase up excessively.
Investment advice
With the recovery of manufacturing demand superimposed on the background of carbon peak 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.
