Investment summary:
Market review:
As of the closing on December 31, the steel sector rose 2.42% this week, the CSI 300 index rose 0.39%, and the steel sector rose 2.03% ahead of the CSI 300 index. From the sector ranking, the weekly growth rate of the steel industry ranks 13th among Shenwan 31 sectors, with an increase of 34.06% year to date, ranking 5th among Shenwan 31 sectors.
Talk every Monday:
The 14th five year plan for the development of raw material industry was released, and the crude steel production capacity only decreased but not increased: on December 29, the Ministry of industry and information technology, the Ministry of science and technology and the Ministry of natural resources jointly issued the 14th five year plan for the development of raw material industry. The main contents of the plan for the iron and steel industry are as follows: by 2025, the production capacity of key raw materials and bulk products such as crude steel and cement will only decrease but not increase, Capacity utilization remains at a reasonable level; The comprehensive energy consumption per ton of steel in the iron and steel industry was reduced by 2%; Explore the establishment of peak shifting production mechanism in steel and other industries, prohibit new projects to expand smelting capacity, and strictly implement capacity replacement; The 14th five year plan will encourage leading enterprises to implement merger and reorganization and build a number of world-class super large iron and steel enterprise groups; Relying on advantageous enterprises, 1-2 professional pilot enterprises are cultivated in stainless steel, special steel, seamless steel pipe, cast pipe and other fields. From the perspective of the planning content, the "14th five year plan" no longer formulates the industrial planning of petrochemical, chemical industry, steel and other industries respectively, and does not give clear guidance on the control of crude steel output. Compared with the output limit, the binding force of capacity limit on the supply side is Limited (refer to the crude steel output in 2016-2020), In combination with the fact that the National Conference on industry and information technology on December 20 did not mention the production restriction orientation of crude steel production in 2022, the possibility of subsequent continuous administrative production restriction gradually decreased, and the resumption of steel production is expected to suppress the profit per ton of steel for a long time, continue to pay attention to the follow-up trend of crude steel production restriction policy under the guidance of steady growth policy;
The marginal output rebounded and the demand continued to decline: stimulated by the current high profits, the steel plant has a strong power to resume production. According to the prediction of CISC and the existing steel plant resumption plan, the estimated average capacity utilization rate in January 2022 is about 77% (mom + 2.7%, regardless of the Winter Olympic Games and the resumption of production of some Tangshan blast furnaces), The production restriction policy in the second stage of the heating season and the production restriction of the Winter Olympic Games can not prevent the resumption of production in non limited areas, and the supply side or marginal recovery; Last Friday, the output of large varieties of steel was + 2.15% (+ 4.73pct) on a week-on-week basis, and the apparent consumption was - 3.75% (+ 1.05pct) on a month-on-month basis, with a year-on-year increase of - 16.76% (- 3.25pct). The demand off-season gradually came. Compared with previous years, the higher winter storage price suppressed the enthusiasm of merchants for winter storage; The long-term pessimistic expectation of real estate in the near future has been continuously revised, the intensity of fiscal expenditure has been further improved, and the more positive wording on infrastructure at the central economic work conference has promoted the improvement of medium and long-term demand expectation for steel, waiting for the further observation of the pulling effect of investment on demand next spring;
Market impact: the continuous high profitability of steel or the resumption of production of steel plants, pay attention to the suppression of the weak expectation of administrative production restriction on the profit per ton of steel and the investment performance at the beginning of next year, and the stainless steel processing enterprises with anti cycle and growth attributes have significant investment value;
Investment strategy: focus on recommending Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) industrial material processing targets with growth potential benefiting from the recovery of manufacturing industry, and continue to recommend Xinyu Iron & Steel Co.Ltd(600782) plate targets with significant valuation advantages;
Risk tip: policy implementation is less than expected, supply contraction is limited, and demand is less than expected.
