In the past 22 years, the economy has entered the "steady growth" mode, and the metal raw materials have bottomed out
Since the beginning of this year, strong exports and active manufacturing investment have supported China's economic fundamentals. In the second half of the year, due to repeated epidemics, power rationing by industrial enterprises and other factors, the overall macro-economy stalled. This year's central economic work conference clearly put forward that the economy will focus on stability in 2022. China's monetary policy is moderately loose; The formulation of fiscal policy is more positive, "accelerating the progress of expenditure" and "moderately ahead of infrastructure investment", and fiscal policy will be more effective next year; We still insist on housing without speculation, but affordable housing construction is expected to become the "real estate demand" in the new economic cycle. In the short-term macro level, the concerns about falling commodity prices and stalled demand have bottomed out. With the gradual force of China's policies, cyclical stocks after drastic adjustment are expected to have a new market at the end of the year.
Iron and steel: the logic of crude steel production control is expected to be realized in 2022, and the profit will pick up
In the future, under the background of "carbon neutralization" and "carbon peak", the supply side of the iron and steel industry will be limited by industrial policies for a long time, and the iron and steel supply will be more rigid in the future. The rigid performance of supply will reshape the pattern of the whole industrial chain. On the one hand, the rigid output does not increase the demand for upstream raw materials. Therefore, the cost side of raw materials is expected to remain at a more reasonable position in the future. On the other hand, on the demand side, with the steady growth of China's economy in a reasonable range, the high-quality development of industrial manufacturing industry and the simultaneous release of new / old infrastructure demand, the demand for steel still has the driving force for steady growth.
"Top supply and bottom demand" will continue to be the basic logic of China's steel industry, and steel prices are expected to continue to operate in an ideal position. Even if it is considered conservatively, the steel price will fall back to the average level of 21 years in 2022, and the gross profit per ton of steel still has room to improve.
Considering the current requirements for stable economic growth and the judgment of the pattern of supply and demand at the industrial end, we believe that the current iron and steel industry looks forward to 2022 based on the fundamentals of 2021h2. The change in fundamentals is not a continuation of the trend, but an opportunity to gradually return to normal from pessimism.
Focus on: (1) industrial plate 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) ; (2) special steel key 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) ; (3) building materials companies: Fangda Special Steel Technology Co.Ltd(600507) , Sansteel Minguang Co.Ltd.Fujian(002110) , Sgis Songshan Co.Ltd(000717) ; (4) municipal pipeline materials companies: 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) 、 Beijing Hanjian Heshan Pipeline Co.Ltd(603616) 、 Xinjiang Guotong Pipeline Co.Ltd(002205) 、 Shandong Longquan Pipeline Engineering Co.Ltd(002671) 。
Aluminum: electrolytic aluminum to build the bottom, and pay attention to the opportunities of aluminum processing industry in the upstream of new energy
In terms of alumina, the cost side and supply side factors together led to a sharp rise in alumina prices this year. Looking forward to 2022, there are still many large alumina projects to be put into operation in China, and the supply pattern of alumina will remain surplus. The shortage from September to October this year is only a temporary phenomenon. It is estimated that China's alumina output will reach 76.16 million tons in 2022, with a year-on-year increase of 3.6%. The import and export are basically the same as that in 2021. The demand for non metallurgical alumina is 1.64 million tons, the demand for electrolytic aluminum is 75.96 million tons, and the alumina supply is still 1.6 million tons in excess.
In terms of electrolytic aluminum, the long-term supply growth window has been closed. In 2021, the output loss caused by dual control of energy consumption and power shortage may recover in 2022, and some completed projects that have not been put into operation may start production. We expect that the output increment of electrolytic aluminum in 2022 will be 1.16 million tons, a year-on-year increase of 3.0%. Foreign energy prices are high, and it is difficult to improve the supply, Globally, there is still a supply gap. The peak of the price rise of alumina and power coal has passed. After a short loss, the average profit of electrolytic aluminum industry has rebounded to 1406 yuan / ton, and the profit of electrolytic aluminum has bottomed out.
In terms of aluminum processing, the demand for aluminum materials used in the field of new energy is growing rapidly, such as aluminum plates for new energy vehicles, lightweight profiles for new energy vehicles, photovoltaic aluminum frames, aluminum supports, etc. Among them, the five-year compound annual growth rate of aluminum plate of new energy vehicles has reached 22%, and the technical threshold is high and the certification cycle is long. We think it has long-term investment value.
Recommended targets: Shandong Nanshan Aluminium Co.Ltd(600219) , Guangdonghectechnologyholdingco.Ltd(600673) , recommended concerns: Aluminum Corporation Of China Limited(601600) , Yunnan Aluminium Co.Ltd(000807) , Shanghai Huafon Aluminium Corporation(601702) , Anhui Xinbo Aluminum Co.Ltd(003038) .
Copper: the direction of energy electrification + "steady growth" has been set, and the demand is expected to rebound. Pay attention to the structural investment opportunities brought by the energy reform to the processing links
At the mine end, 2021-2023 is the mine capacity release cycle. It is estimated that the capacity increase brought by the operation / expansion of the mine in 2022 will be 1314000 tons; We predict that the global copper production will reach 22.2 million tons in 2022, with a year-on-year increase of 3.4%.
At the smelting end, in 2021, due to the extremely low smelting processing fee in the first half of the year and power restriction in the second half of the year, there were many overhauls in Chinese smelters, which is expected to affect the total production of refined copper by more than 270000 tons in the whole year. The reduction of overhauls in 2022 will increase some refined copper production. In 2022, five copper smelting projects will be put into operation, and it is expected that 880000 tons of refined copper capacity will be added. However, the problem of energy consumption may cause the actual capacity release to be lower than expected. It is estimated that the growth rate of global refined copper production is lower than that of mine copper production, and the shortage at the mine end has turned into surplus.
In copper processing, fixed asset investment has stagnated for six years, and the cruel Red Sea competition is moving from the "spring and Autumn Period" to the "Warring States period". In recent years, the improvement of environmental protection requirements and the tightening of dual control of energy consumption have made the survival and expansion of small enterprises more and more difficult; The competitive advantages of leading enterprises have been highlighted, the backward production capacity has been cleared, and the concentration has been continuously improved. The bottom of copper processing fee has been paid. Leading enterprises are expected to reap dividends from capacity expansion.
In terms of demand, we believe that steady growth will improve China's marginal demand; In addition, in the process of global energy structure transformation, as a necessary conductive material, the demand for copper in new energy vehicles, wind power, photovoltaic, energy storage and other projects will be rapidly increased to support the downstream demand of the whole copper. It is estimated that the global copper consumption will be 25.06 million tons in 2022, with a growth rate of about 2.8%, and the supply and demand are basically balanced. Recommended subject: Ningbo Jintian Copper (Group) Co.Ltd(601609) , it is recommended to pay attention to: Zijin Mining Group Company Limited(601899) , China Molybdenum Co.Ltd(603993) , Zhejiang Hailiang Co.Ltd(002203) , Tongling Nonferrous Metals Group Co.Ltd(000630) .
Risk warning: the epidemic spread of covid-19 exceeded expectations; The progress of carbon peak and carbon neutralization is not as expected; The risk of the Fed tightening liquidity sharply.
