Investment suggestion: continue to be optimistic about steel stocks in the medium term. Against the backdrop of historically high profits and historically low valuations, the possibility of carbon neutralization has brought the ceiling of industry supply. In addition, the raw material side has contributed cost dividends again, and steel stocks will usher in a wave of sector opportunities for double rise in performance and valuation. Optimistic about the low value of high dividend ordinary steel, raw materials and some special steel. The first is Hunan Valin Steel Co.Ltd(000932) , Xinyu Iron & Steel Co.Ltd(600782) , Maanshan Iron & Steel Company Limited(600808) , Baoshan Iron & Steel Co.Ltd(600019) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Citic Pacific Special Steel Group Co.Ltd(000708) , etc; Pay attention to Fangda Special Steel Technology Co.Ltd(600507) , Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) , Inner Mongolia Eerduosi Resources Co.Ltd(600295) , Hbis Resources Co.Ltd(000923) , etc.
Industry perspective: focus on the resonance between the peak demand season and the annual report exceeding expectations. In late March, steel entered the traditional peak demand season, and the first quarterly report gradually entered the disclosure period. The sector is expected to usher in a positive catalyst. Some targets with good performance, low valuation and high dividends are expected to usher in relative returns. After the festival, the output remained generally low, and the accumulation speed of the industrial chain was slow. Last week, the absolute value of social inventory was close to – 26% year-on-year. With the start of demand in the peak season, the supply and demand gap will appear again. We judge that the spot price of steel has risen sharply, while the futures price is currently in a discount state, and the probability is easy to rise but difficult to fall in the future. The trend of the short-term Russian Ukrainian war is uncertain, but the impact on the overall supply of commodities is inevitable. Under the peak demand season in the southern hemisphere, the gap between supply and demand of commodities may be enlarged. Continue to be optimistic about the spring market of steel stocks. At present, we are most optimistic about ordinary steel varieties with high dividend rate, undervalued value and high elasticity.
Market review: last week (March 7-march 11), Shenwan iron and steel fell 6.1%, 2.2% behind the Shanghai Composite Index. The top gainers were Silvery Dragon Prestressed Materials Co.Ltd Tianjin(603969) (21.1%), Xinxing Ductile Iron Pipes Co.Ltd(000778) (0.8%), Minmetals Development Co.Ltd(600058) (0.6%). Last week, the prices of main contracts of screw thread, hot coil, iron ore and coke futures changed by 0.7%, – 0.6%, 7.0% and 7.6% respectively compared with the previous week (February 7-march 4); The profits of thread and hot-rolled sector changed by – 15.2% and – 20.0% respectively from the previous week.
Industry trends:
General steel: last week, the social inventory of steel was 17.59 million tons, a month on month decrease of 1.5%; Among them, the long timber inventory was 12.36 million tons, a month on month decrease of 1.0%; The inventory of sectors decreased by 5.28 million tons, a month on month decrease of 2.02%. In late February, the average inventory of steel mills was 16.1 million tons, down 4.7% month on month. Last week, 237 steel traders nationwide shipped 175000 tons, up 6.1% month on month; Last week, the cargo volume of terminal line snails in Shanghai was 16000 tons, an increase of 7.3% month on month. The cost lag gross profit of thread, hot rolling, cold rolling and medium and heavy sector tracked are 797, 939, 732 and 899 yuan / ton respectively.
Overseas steel price: last week, China’s steel price composite index was 185.21, a month on month decrease of 0.1%.
Iron ore: last week, the shipment volume of iron ore from Australia, Pakistan and India was 22.45 million tons, a month on month decrease of 2.5%; The arrival volume of 6 ports in the North was 9.43 million tons, an increase of 22.3% month on month. Last week, the iron ore port inventory was 157.14 million tons, a month on month decrease of 0.9%. Last week, the average daily port dredging volume of imported ore in the port was 2.76 million tons, a month on month decrease of 0.7%.
Coking coal and coke: last week, the spot of coking coal was strong, the purchase intention of downstream coking plants was high, and the coking coal market rebounded rapidly, which made the cost of coking enterprises rise rapidly, and the short-term coking coal market was still strong. The coke refining market is relatively strong.
Ferroalloy: China’s silicon manganese consolidation operation, while the overseas end and futures end performed better. The disk price of ferrosilicon futures fluctuated significantly. The overall demand for ferrosilicon downstream performed well last week. The high futures and bidding prices delayed the release of steel mill demand.
Special steel: last week, the market price of national excellent special steel increased slightly. From the demand side, the orders of downstream end enterprises in March were less than expected. Under the condition of unsaturated orders, the procurement rhythm of end enterprises was more flexible, which affected the enthusiasm of procurement. The special steel market will run in shock next week.
Stainless steel: stainless steel spot callback last week, the price of nickel on the disk decreased, and the sentiment of ferronickel market gradually returned to rationality. However, due to the good order sales of China ferronickel factory in the early stage, there is no inventory pressure at the spot. Last week, the spot price of chromium ore period maintained a steady upward trend.
Risk tip: real estate decline; The recovery of manufacturing industry was less than expected.
