Low social finance shows the downturn of real estate, and pay attention to the opportunities for improvement of steel demand brought by infrastructure
The recent rise and fall of black prices are in a dilemma. On the one hand, the downstream demand recovers relatively rapidly, the rebar and hot coil meter need to reach the level of the same period in previous years, and the commodity price support is strong; However, on the other hand, the main contract of finished products has been nearly flat at present, and the continuous rising space is limited. The short-term shock of commodities is waiting for the emergence of new variables. The latest social finance data released in February is generally lower than market expectations, especially the negative growth of residents’ medium and long-term loans, which reflects that the relaxation of real estate policy since late November 2021 is not enough to reverse the declining real estate demand, while the weakness of real estate will continue to suppress the performance of steel demand, and the credit easing policy needs to be increased again. In view of the many constraints on steady growth this time, we believe that the government’s efforts will be gradual. In terms of sub items, infrastructure investment will bear the main burden of supporting the bottom in the first half of the year, while the recovery of real estate will take time, and it is expected to show a trend of low in the first half and high in the second half of the year. As far as the steel industry is concerned, due to the recent strong performance of coke and iron ore prices, there is great downward pressure on the profitability of steel mills. However, if the current month on month increase in demand can be sustained, it is expected that the steel price center will rise steadily and the profit per ton of steel will stop falling and rebound. As for the subdivided varieties, it is suggested to pay attention to the investment opportunities of deformed steel sector brought by infrastructure development. The main beneficiaries include Fangda Special Steel Technology Co.Ltd(600507) , Sgis Songshan Co.Ltd(000717) and so on. Their fields focus on the opportunities of water pipe industry. The main beneficiaries are Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Xinxing Ductile Iron Pipes Co.Ltd(000778) and so on. The ore sector benefits from Hbis Resources Co.Ltd(000923) .
The trend of ore price is strong, and the coke price is expected to be strong
(1) iron ore: the iron ore inventory in port 45 this week was 157143 million tons, down 1.4022 million tons month on month; The global shipment of iron ore was 29.027 million tons, with a decrease of 689000 tons on a weekly basis. Among them, the shipment of iron ore in Australia was 13.792 million tons, with a decrease of 1.331 million tons on a weekly basis; Brazil’s iron ore shipments were 6.282 million tons, up 1.274 million tons on a weekly basis. At the same time, the molten iron output of 247 steel mills reached 2.51million tons this week, with a decrease of 47000 tons on a weekly basis. This week, the overall price of iron ore showed an upward trend, but due to the influence of production restriction policy in some regions, the daily average hot metal production decreased. We expect that the steady growth policy will promote the gradual increase of iron ore demand, and the ore price may be strong;
(2) coke: the third round of increase in coke has been implemented, the profit has been continuously repaired, and the production enthusiasm has been improved. Under the expectation of the recovery of hot metal production in the future, the demand support is strong, and the short-term coke price is expected to be strong.
Plate key data tracking
Demand continued to pick up: this week (3.7-3.11), the average trading volume of construction steel in China was 178400 tons, with a weekly increase of 3800 tons. According to the calculation of Mysteel data, the apparent consumption of deformed steel bars was 3.332 million tons, with a week on month increase of 777000 tons; The apparent consumption of hot rolled coil was 3.097 million tons, with a decrease of 194000 tons on a weekly basis;
The supply has dropped: the operating rate of blast furnaces in China (247) is 70.85%, and the week on month ratio decreased by 3.87 PCT; The capacity utilization rate of Tangshan steel plant was 57.32%, and the week on month ratio decreased by 5.87pct. The national weekly output of the five varieties totaled 9.354 million tons, down 206 thousand tons month on month.;
Profit performance fell: this week (3.7-3.11), the gross profit per ton of rebar was 107 yuan, down 150 yuan month on month; The gross profit ratio of hot rolled sector was 136 yuan, with a decrease of 155 yuan; The gross profit per ton of cold rolled sheet was – 131 yuan, down 157 yuan month on month; The gross profit per ton of medium and heavy sector was – 39 yuan, down 160 yuan month on month.
Risk tip: terminal demand has fallen sharply, and the environmental protection production restriction policy is less than expected.
