Iron and steel industry: the trend is gradually clear, and we strongly look at the iron and steel sector under multi stable growth
As of March 4, the five major varieties of thread, hot coil, medium and heavy sector, cold rolling and wire rod reported 4933 yuan / ton, 5207 yuan / ton, 5237 yuan / ton, 5673 yuan / ton and 5223 yuan / ton respectively this week. The cycle to cycle ratio changes by – 14 yuan / ton, + 87 yuan / ton, + 21 yuan / ton, + 22 yuan / ton and – 5 yuan / ton respectively. The overall steel price shows strong shock. In terms of social inventory, on March 4, social inventory was 178625 million tons, up 293900 tons on a weekly basis. The factory warehouse of key enterprises was 6.3167 million tons, down 64900 tons.
The gross profit per ton of steel has narrowed. The gross profit per ton of steel for thread, hot coil, medium and heavy sector, cold rolling and wire rod was 482 yuan, 756 yuan, 686 yuan, 572 yuan and 772 yuan respectively, down 143 yuan, 42 yuan, 108 yuan, 107 yuan and 134 yuan compared with last week.
In the short term, the price rise of iron ore and Coke will compress the profit space of steel. However, the steel price has been supported synchronously. At the same time, the steel market is in the transition stage of light and peak seasons, and the transaction volume is gradually large. At present, the new order index of manufacturing industry in February was 50.7%, up 1.4 percentage points from the previous month, returning to the expansion range, indicating that the prosperity of manufacturing market demand rebounded and the performance of sector price was relatively strong. In the construction industry, the short-term demand has not been fully released. After the two sessions and the Paralympic Games, the superimposed temperature will pick up, and the release of downstream demand is expected to be accelerated. In the medium and long term, this year’s GDP growth target is 5.5%. Under the background of steady growth, it is expected to continue to make efforts in policies and funds, and the demand for steel is expected to be strong.
As the main focus of stabilizing the economy, in the field of infrastructure construction, water conservancy and municipal pipe network have been clearly reflected at the policy level. It is expected that with the end of the two sessions and the centralized bid opening and construction in various places, the pipeline demand is expected to be released in large quantities. Therefore, we believe that under the background of “stabilizing the economy”, the pipeline industry is expected to accelerate the release of demand again with certainty. It is strongly recommended to pay attention to the relevant targets of the pipeline industry under the stable economy.
For high-grade non oriented silicon steel, the government work report said that it would continue to support the consumption of new energy vehicles, and the demand for non oriented silicon steel for new energy vehicles is expected to continue to maintain high growth. The supply side release is limited, and the profit of high-end silicon steel is expected to continue to break out this year. Attach importance to enterprises with high grade non oriented silicon steel production capacity. In addition, the motor energy efficiency upgrading plan (20212023) is 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) .
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Industrial sector 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) . Smart pipe network: Zhengyuan Geomatics Group Co.Ltd(688509)
Rare earth sector is expected to continue to rise in short-term supply and demand, and it is difficult to repair the tight situation of lithium and spot valuation in the rare earth sector
In the lithium sector, spodumene quoted us $2730 / ton this week, up 0.74%; Lithium hydroxide quoted 453500 yuan / ton, up 9.15%; The quotation of battery grade lithium carbonate was 495000 yuan / ton, up 6.68%. Rare earth sector, praseodymium and neodymium oxide, dysprosium oxide and terbium oxide were quoted at 1.103 million yuan / ton, 3.11 million yuan / ton and 15.17 million yuan / ton this week, up 0.27%, – 0.64% and – 0.52% 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 under the rapid development of new energy, wind power and photovoltaic energy storage in the future. 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 demand of new high-efficiency soft magnetic materials silicon steel and metal soft magnetic powder cores in the new energy era;
For industrial metals, SHFE copper prices rose 3.11% this week to close at 72890 yuan / ton; SHFE aluminum price rose 4.71% to close at 23570 yuan / ton. Abroad, the situation in Russia and Ukraine has caused obvious interference to the commodity supply chain; In China, the government work report held this week determined that the annual GDP growth rate was about 5.5%. The policy direction of underpinning the economy has been confirmed again, which will strongly support the industrial metal fundamentals in the second quarter.
In terms of copper, the US employment data continued to improve. It is expected that with the liberalization of the epidemic prevention and control policy, the number of initial jobless claims will further decline. Under the continuous higher than expected inflation pressure and the continuous good employment data, the progress of the Fed’s interest rate increase and contraction schedule will probably accelerate. However, the short-term conflict between Russia and Ukraine may reduce the pace of interest rate hike by the Federal Reserve and hinder the supply chain, which is obviously beneficial to LME copper price. The turning point needs to track the situation between Russia and Ukraine. China’s downstream is gradually started. The government work report emphasizes steady growth, and the secondary market is expected to form an upward consensus expectation.
In terms of aluminum, the situation in Russia and Ukraine this week led to a further surge in energy prices. At present, the price of TTF natural gas has risen to 204 euros, a record high. There is a possibility of further production reduction of electrolytic aluminum in Europe; On the other hand, the shortage of aluminum supply in Europe is difficult to alleviate. The more serious anti globalization and confrontation after the conflict between Russia and Ukraine will make it difficult for the supply of bulk commodities to be as smooth as before, and will also increase the overall circulation cost. Considering the general lack of investment in upstream industries, the rise of bulk commodity price center may be a long-term trend. This week, China’s electrolytic aluminum social inventory accumulated to 1.12 million tons, with an increase of 21000 tons in a week and 3000 tons in the last four days. The accumulation rate slowed down significantly and downstream construction accelerated. At present, the average profit of China’s simulated electrolytic aluminum industry has reached 6065 yuan / ton, and the profit of electrolytic aluminum has continued to improve. With the commencement of downstream construction after March and the implementation of policies related to steady growth, downstream demand is expected to improve, and China is basically oriented to the good.
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\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 111 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) 6016 China High-Speed Railway Technology Co.Ltd(000008) 07 Henan Shenhuo Coal&Power Co.Ltd(000933) 。
Risk tips: the risk of sharp fluctuation in the price of raw materials in the upstream, the risk of lower than expected demand in the downstream, and the risk of continuous spread of overseas epidemic.
