Iron and steel: the global supply of iron has been impacted recently. Russia and Ukraine are both large exporters of finished steel / semi-finished products / iron ore. the external supply of the two countries has been blocked periodically. Overseas buyers are looking for alternative supply in the global market to push up the price of black products. In addition, the fiscal and tax standardization of China’s scrap industry chain has been implemented since March. The arrival of scrap in steel enterprises fell this week, and the supply was also affected to some extent. In terms of demand, the average daily turnover recovers rapidly. Of course, there may be speculative demand. How to focus on the real demand in the peak season and the data in the next two weeks. In the short term, the contraction of iron supply caused by emergencies may still dominate the black commodity market in March. At the same time, the demand side will also enter the stage of testing the effect of steady growth and pay attention to the changes of demand data. In the medium term, the industry may still face demand side uncertainty. Focus on the growing new material industries and companies 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) , etc.
Coal: the global shortage of coal has intensified, and the international coal price has constantly set a new record. In terms of thermal coal, the demand is hot, and the international coal price continues to rise. This week, the market is still running strongly. In terms of supply, the shipment of the main origin is good and the transportation is active. Affected by the price limit and the supervision of the long-term association, the guaranteed supply coal mines are not sold to the outside world, the supply of goods is tight, there is a large-scale queue at the pit mouth, while the downstream demand is strong, and it is difficult to improve the port inventory; The impact of the Winter Olympic Games, the Paralympic Games and the two sessions has always existed, and the supply is still tight. In terms of import, affected by the war between Russia and Ukraine, Russia’s export business is blocked, the international energy supply situation is tight, the international acceptance of high prices is improved, and the international demand turns to Indonesia, Australia and other countries, resulting in tight supply of coal in Indonesia, sharp rise in quotation and serious upside down of imported coal. It is expected that the price of imported coal will still rise in the near future. In terms of demand, the inventory of downstream power plants is low and the demand for replenishment is strong; Non electric power enterprises have resumed work, the pace of replenishment has accelerated, and the demand continues to release. China’s two sessions are about to be held. The management of environmental protection and production safety will be stricter, the supply will remain tight, and the coal price may continue to be strong. In the follow-up, we still need to pay attention to the demand for replenishment and the impact of Russia Ukraine issues on the international coal market. In terms of coking coal, demand improved and coal prices continued to rise. As of March 4, the price of Shanxi produced main coke coal depot in Jingtang Port has increased by 2930 yuan / ton (including tax), and the prices of all kinds of coal have increased. In terms of supply, recently, the coal mines have resumed work one after another. There is an increase in the supply side, the utilization of production capacity has improved, more coal mines have shipped smoothly, and the overall inventory still shows a downward trend. Due to the shortage of resources and the difficulty of replenishing the inventory, some coke enterprises have passively reduced the inventory. In terms of importing Mongolian coal, Ganqi Maodu port passed Customs on the 4th of this week, with an average of 143 vehicles per day (week on week + 51 vehicles), and the customs clearance volume rebounded, but there are still few tradable resources, and the quotation continues to rise. In terms of demand, the profits of coke enterprises have rebounded, the procurement is still active, traders are also active in taking goods, and there are many pre-sale orders for some coal mines, and the market supply is still tight. Then continue to pay attention to the production and downstream demand of coke enterprises. In terms of coke, the second round of rising and landing, and there is still upward momentum in the future. As of March 4, the price of secondary metallurgical coke in Tangshan was 3200 yuan / ton, and the second round of price increase fell to the ground. In terms of supply, although the profits of coke enterprises have rebounded month on month, there is still some interference in the production area environmental protection and production restriction during the two sessions. The start-up of enterprises in some regions fell slightly, and the supply side is still tight. In terms of demand, the downstream steel mills continued to resume production, the start-up of blast furnace and the output of molten iron increased significantly, and the demand for steel mills rose steadily, supporting the strong demand for steel mills to replenish storage, but the coke resources were tight, and the inventory of steel mills continued to decline. On the whole, with the support of demand, coke prices are still rising. Investment strategy: this week, the overall coal price continues to rise, and the import upside down phenomenon is more serious. The impact of the Russian Ukrainian issue on the international energy market has gradually become prominent. In 2021, Russia exported 223 million tons of coal (accounting for about 16% – 17% of the global share), mainly to China, Japan, South Korea, the Netherlands, Ukraine and other countries. Many countries are considering shifting coal imports to Australia, Indonesia and other countries, further aggravating the tension of international coal supply and pushing up international coal prices, It even exceeds the high point in 2021, constantly refreshing the record high, forming support for China’s coal price, and the industry as a whole will maintain a high boom. In terms of individual stock recommendation, companies with a high proportion of long-term association have more stable performance growth, companies with a high proportion of coal in the market have more attractive valuation, and companies with large advantages of coal types or logic of output growth have strong competitiveness α In addition, coal stocks that actively layout energy transformation will also get the opportunity to improve their valuation. Thermal coal stocks are suggested to pay attention to: Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , 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 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 suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015) .
Nonferrous Metals: the two sessions will strengthen steady growth, and the development of lithium resources in China may speed up. 1) The upward trend of raw material prices in the upstream of new energy has been continuously strengthened. The upward trend of industry prosperity remains unchanged: the two sessions proposed to continue to encourage the consumption of new energy vehicles, and it is expected that the sales of electric vehicles in China will continue to increase; The sales volume of overseas new energy vehicles increased month on month: in February, the sales volume of electric vehicles in the United States was 59468, with a month on month increase of + 11%, a year-on-year increase of 106%, and the electrification penetration rate was 5.7%. Six European countries sold 114900 vehicles in February, a year-on-year increase of 28% and a month on month increase of 6%. The price of lithium carbonate has accelerated upward again, and the development of lithium resources in China may be accelerated. This week, the price of battery grade lithium carbonate increased by 5.6%, exceeding 500000 yuan / ton, the price of battery grade lithium hydroxide increased by 9.7%, and the price of spodumene increased by 3.8%. The Ministry of industry and information technology stressed that China’s lithium resources are self-contained and controllable, and the development of China’s lithium resources may be accelerated. With the tightening of raw materials, the price of cobalt may rise further. The quotation of MB cobalt (standard grade) and MB cobalt (alloy grade) increased by 2.9% and 2.9% respectively month on month; China’s metal cobalt, cobalt sulfate and cobalt trioxide rose 0.6%, 3.0% and 1.6% respectively. The pattern of rare earth permanent magnet industry was reshaped. In view of the continuous rise and high market price of rare earth products, the rare earth office interviewed China rare earth group, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) group, Shenghe Resources Holding Co.Ltd(600392) company and other key rare earth enterprises to promote and improve the pricing mechanism of rare earth products and jointly guide the product price to return to rationality, We believe that the current investment opportunities in the rare earth sector should pay more attention to “quantity” rather than “price”. Returning the price to rationality and avoiding large fluctuations are conducive to the sustainable growth of downstream applications. Only in this way can the high profitability and high growth of rare earth enterprises be sustainable; The two sessions stressed that we should continue to promote carbon neutralization and carbon peak, promote energy conservation and carbon reduction in iron and steel, nonferrous metals, petrochemical, chemical industry, building materials and other industries, and further stimulate the demand for rare earth permanent magnets. Under the current supply and demand pattern, rare earth prices do not have the risk of falling sharply, and the return of prices to rationality does not mean that rare earth prices should be reduced significantly. Nickel: the situation of tungsten in Russia is tense, and the price of nickel rises. The situation in Ukraine and Russia was tense, the market continued to destock, and the inventory of nickel raw materials in China was low. SHFE nickel closed at 188400 yuan / ton, up 6.97% month on month.
2) Precious metals, the conflict between Russia and Ukraine stimulates risk aversion. This week, the geopolitical conflict between Russia and Ukraine stimulated the rise of risk aversion demand in Europe; The US February non farm employment data disclosed this week was better than expected, but the Fed’s monetary policy expectation has been digested by the market, and the impact of this non farm data is relatively limited. As of March 4, Comex gold closed at US $1966.6/oz, up 4.19% month on month; COMEX silver closed at US $25.789/oz, up 7.47% month on month; SHFE gold closed at 394.64 yuan / g, up 0.82% month on month; SHFE silver closed at 5062 yuan / kg, up 1.50% month on month. 3) Base metals, energy impact caused by European and American sanctions, and China strengthened all-round steady growth. During the week, the current conflict between Russia and Ukraine continued. At the same time, Europe and the United States opened financial sanctions against Russia, and the transportation between Russia and Europe was blocked. Many uncertainties led to the soaring price of bulk commodities led by energy. In China, the fifth session of the 13th National People’s Congress was held in Beijing. In the government work report, it stressed that all-round efforts should be made to stabilize growth, “strive to stabilize the macro-economic market” and “maintain the economic operation within a reasonable range”. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by 7.5%, 13.6%, 3.7%, 12.8%, 7.4% and 20.3% respectively this week, and the price rose as a whole. 4) Investment strategy: for base metals, China’s economic work in 2022 is set to be “stable”. It is expected that the follow-up steady growth policies will be introduced continuously to support the confidence of base metal demand. However, globally, the changes in the structure before, during and after the overseas economic demand epidemic and the tightening trend of overseas liquidity remain unchanged, which still suppress the demand for base metals. In the short term, there is no doubt that the supply uncertainty caused by the conflict between Russia and Ukraine will have a direct impact on bulk commodities, and the sector will continue to be strong before the uncertainty between Russia and Ukraine. The upstream raw materials of new energy, such as lithium cobalt rare earth copper foil, aluminum foil and magnetic materials, and the upstream raw materials of new energy, such as lithium cobalt rare earth copper foil, aluminum foil and magnetic materials, are still strong in the short cycle, and the general direction of the medium and long-term three-year boom upward cycle will not change. The industrial boom is the most clear and will continue to be optimistic.
Building materials: pay attention to the “two sessions” policy and continue to recommend steady growth investment opportunities. On the occasion of the two sessions, the government’s annual work objectives were launched one after another. We believe that expanding effective financial investment, as one of the priorities of the government’s work this year, will make infrastructure an important starting point for steady growth. It is suggested to focus on steady growth investment opportunities and subdivide sectors. 1) In the short term, when the cement industry is expected to grow steadily and heat up, the excess return of the sector is prominent. In the 22 years, the industry has high prosperity toughness (focusing on the enhancement of supply side coordination), and in the medium and long term, the industry is expected to be integrated + extended. 2) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 3) The price of float glass has dropped slightly. In the short term, it is mainly to digest social inventory. In the follow-up, with the continuation of demand toughness, the price is still expected to maintain a good level; The downstream demand for photovoltaic glass was boosted, and the new single price increased slightly in March; There is still price elasticity at the bottom of the industry cycle. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the field of photovoltaic glass. 4) Brand building materials enter the strategic allocation time point. In terms of real estate, policy marginal relaxation + increased demand for affordable housing with non real estate developers as the main body, and the demand of the real estate chain is expected to gradually pick up (the end of real estate demand is expected to correspond to 2022q1). We believe that the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption in 2014 / 18, and this round corresponds to 2021q4). The double repair of the performance and valuation of brand building materials in 22 years is worth looking forward to. The leaders of each subdivision track have long interpreted the main logic of improving the concentration. The frequent repurchase, incentive and increase of industrial funds highlight the confidence of enterprises and have channels, brands Enterprises with excellent endowments such as capital and management have high certainty. 5) In the field of new materials, carbon fiber / high-purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand + domestic alternative resonance, and UTG welcomed the outbreak of demand. 6) Glass fiber cycle weakened, roving boom is expected to continue (wind power, automobile and other strong support for demand), and the price center of electronic cloth fell.
Chemical industry: the price of crude oil has reached a new high, the global capital expenditure has warmed up, and the leader of the oil service industry has fully benefited: China Oilfield Services Limited(601808) ; The rise in oil prices has led to the increase and expansion of chemical products prices, among which private large-scale refining has fully benefited: Rongsheng Petro Chemical Co.Ltd(002493) , Hengli Petrochemical Co.Ltd(600346) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengyi Petrochemical Co.Ltd(000703) , while the relevant industrial chain represented by PTA polyester filament is expected to be driven by both cost and demand: Tongkun Group Co.Ltd(601233) , Xinfengming Group Co.Ltd(603225) . The traditional bulk is still looking for the bottom, and the leading value crosses the cycle. As the main body of the chemical industry, the PPI of chemical raw materials and chemical products manufacturing industry in December 2021 increased by 23.8% year-on-year, which was positive for 12 consecutive months. In terms of downstream demand, from January to December 2021, the newly started area of houses decreased by 11.4% year-on-year, 0.04% month on month in December, the construction area increased by 5.2% year-on-year from January to December, 6.32% month on month in December, the completed area increased by 11.2% year-on-year from January to December, and 184.9% month on month in December; From January to December, the national automobile output increased by 4.8% year-on-year; From January to December, the retail sales of clothing, shoes, hats, knitwear and textiles increased by 14.2% year-on-year, with strong demand. On the supply side, the investment in fixed assets in the chemical industry continued to grow. From January to December, the investment in fixed assets in chemical raw materials and chemical products manufacturing industry increased by 15.7% year-on-year. It is suggested to focus on leading enterprises with excellent quality and core competitiveness, 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) . With the improvement of health awareness, sugar substitutes have become the general trend of the times. It is suggested to pay attention to the leading food additives in the business cycle Anhui Jinhe Industrial Co.Ltd(002597) . 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 suggested to focus on high-quality growth companies: Zhejiang Hailide New Material Co.Ltd(002206) .
Risk warning event: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase. The economic growth rate is lower than expected; Excessive policy regulation; Renewable energy substitution, etc; Risk of coal import impact. Macroeconomic fluctuation, import and environmental protection and other policy fluctuation risks, gold price fluctuation risks, new energy vehicle sales are lower than expected risks, and the premise assumptions of industry supply and demand calculation are lower than expected risks. Risks of macroeconomic downturn; 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. Macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.
