This week, the Shanghai Composite Index fell by 4%, and the Shanghai and Shenzhen 300 index fell by 4.22%. Steel sector fell by 6.13%; Among the sub sectors, the ordinary steel sector increased by 0.00%, and the special material sector decreased by 5.46%.
Steel market: the profit per ton of steel has fallen, waiting for the driving effect of steady growth on steel demand
This week, the profits of steel mills have fallen, and the demand for steel will continue to rise driven by steady growth, but it still needs to wait for flowers to bloom. The fluctuation of steel price is not large this week, and the decline of steel plant profit is more caused by the rise in the price of raw materials such as ore. In terms of demand, 1) with the favorable macro policies and the end of the two sessions in March, the downstream demand may start gradually. Due to the restrictions of the Winter Olympics and the influence of the weather, the deviation of procurement enthusiasm and the lag of construction start-up, the demand for steel has been significantly weaker than that in previous years since the Spring Festival. However, with the end of the two sessions and favorable policies, the downstream demand will be gradually started. 2) The state strongly supports the development of infrastructure this year, and infrastructure drives the demand for steel. As for the demand for steel, the infrastructure pull may be obvious, while the real estate pull demand is slightly inferior. With the support of national policies, the demand side of steel will improve in the future. In terms of supply, some steel mills arranged steel mill maintenance in March. Although the supply may decline in March, on the whole, the pressure on the supply side is small, which can meet the current demand, and can still maintain the price and supply in the future. At the same time, some representatives of the two sessions pointed out that in the future, China’s iron and steel industry may develop in the direction of taking iron and steel enterprises as the core, realizing the supporting improvement and effective extension of the iron and steel industry chain through self construction or cultivating downstream industries, and gradually forming a complete chain of iron and steel industry cluster.
The steel price fluctuated little this week, and the spot prices of rebar, cold rolling and medium sector increased by 0.81%, 0.18% and 0.39% respectively; The spot price of hot rolling decreased by 0.77%. Specifically, the categories are subdivided: in terms of hot-rolled coils, the international situation has gradually eased recently, and the development trend towards negotiation is large. Therefore, the commodities affected in the early stage will also return to the fundamentals, and some prices will fall in the near future; In terms of scrap steel, the current price trend in the recent talent period is weak, and the market trading tends to be cautious. At the same time, the recent epidemic situation is frequent, the resource circulation is blocked, and the supply of scrap steel is relatively tight. Generally speaking, it is expected that the short-term scrap steel price will be stable; In terms of medium and heavy sector, the output and inventory of this week have decreased. The steel plant will reduce to a certain extent due to the rise in the price of raw materials and the two sessions, and the demand will pick up slightly. It is comprehensively expected that the price of medium and heavy sector will fluctuate and adjust in the short term.
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 496000 yuan / ton, with a weekly increase of 0.81%; The price of hot rolled coil was 515000 yuan / ton, with a weekly decrease of 0.77%; The price of cold rolled coil is 568000 yuan / ton, with a weekly increase of 0.18%; The price of medium board was 516000 yuan / ton, with a weekly increase of 0.39%. In the futures market, the active contract price of rebar was 491700 yuan / ton, with a weekly increase of 0.33%; The active contract price of hot rolled coil was 513700 yuan / ton, with a weekly decrease of 1.40%; The active contract price of wire rod was 550600 yuan / ton, with a weekly decrease of 0%. The myspic composite steel price index was 185.30 points, with a weekly increase of 0.02%, of which the myspic long material index rose by 0.34% and the myspic flat sector index fell by 0.37%.
Raw material Market: the scrap market price is mainly stable, and the coke market is stable and strong temporarily
This week, the scrap market price is mainly stable, and the coke market is temporarily stable and strong. In terms of scrap steel, the current price trend in the recent talent period is weak, and the market trading tends to be cautious. Recently, there have been frequent outbreaks in many places, the circulation of resources is blocked, and the supply of scrap steel is relatively tight. Under the superposition of cutting-edge mode, the market’s willingness to operate is not high. In the short term, the scrap price is expected to be stable. In terms of double coke, the coke enterprises normally produce, the coke enterprises maintain low or zero inventory operation in the plant, that is, production and sales, and the coke continues to be bullish. However, the blast furnace production in Hebei and Handan is still limited recently. In the later stage, the steel mills consider further increasing the production and even starting the blast furnace at full production. It is expected that the coke market will operate stably and strongly in the short term.
As of Friday, the price of Australian Pb powder in the spot market was 996.00 yuan / ton, with a weekly increase of 1.53%; The price of primary metallurgical coke was 351000 yuan / ton, with a weekly decline of 6.04%%; The price of main coking coal was 260000 yuan / ton, with a weekly decline of 0%. In the futures market, the active contract price of iron ore was 822.00 yuan / ton, with a weekly increase of 1.17%; The contract coke price was 367750 yuan / ton, with a weekly increase of 2.58%; The active price of coking coal was 303800 yuan / ton, with a weekly increase of 5.91%.
Steel supply and demand: steel inventory ushers in an inflection point, and supply and demand maintain a tight balance
In terms of steel mill inventory this week, wire rod, medium and heavy sector, rebar, hot rolling and cold rolling decreased by 2.78%, 3.74%, 8.75%, 3.53% and 6.06%. In terms of steel output this week, the output of cold rolling, medium and heavy sector, wire rod, medium and heavy sector and thread steel decreased by 7.20%, 5.58%, 11.81%, 8.05% and 14.94% respectively.
The Paralympic Games is coming to an end, the impact of production restriction in various regions is weakened, and in March, when the demand is recovering, the blast furnace profit remains at a high level, boosting the production enthusiasm of enterprises, so as to ensure the supply. In terms of demand, due to the support of government policies, the demand for housing construction and infrastructure will gradually recover. At the same time, the domestic sales and exports of manufacturing industry will form a strong support for the demand for sectors, and the supply and demand of steel will maintain a tight balance in the future.
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) ; It is more popular in the emerging market of lithium wire rod and mica wire rod: ; 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.
