Steel industry: the pipeline industry is expected to play an important role in stabilizing the economy
As of December 31, the five varieties of thread, hot coil, medium and heavy plate, cold rolling and wire rod had received 4730 yuan / ton, 4777 yuan / ton, 5039 yuan / ton, 5365 yuan / ton and 5089 yuan / ton respectively this week. The circumferential ratio decreased by 2.6%, 1.7%, 1.0%, 1.0% and 2.3% respectively. In terms of social inventory, this week’s social inventory was 8.7483 million tons, down 36800 tons on a weekly basis.
Gross profit per ton of steel narrowed. The gross profit per ton of steel for thread, hot coil, medium and heavy plate, cold rolling and wire rod was 466 yuan, 334 yuan, 390 yuan, 446 yuan and 682 yuan respectively, down 113 yuan, 85 yuan, 53 yuan, 121 yuan and 30 yuan compared with last week.
In the short term, the demand is weak and it is difficult to reverse sharply. However, under the background of “stabilizing the economy + making a good start”, it is expected that the pace of returning to work will be accelerated after the Spring Festival. Therefore, it is still recommended to pay attention to the opportunities brought by marginal changes on the demand side of the industry.
The central economic work conference will set the tone that next year’s economy will focus on stability, and infrastructure investment should be carried out moderately ahead of schedule. Support the construction of water conservancy, municipal and new infrastructure. We will accelerate the completion of short boards in gas pipelines, disaster prevention and reduction, systematically control urban waterlogging, and comprehensively promote the construction of drainage and waterlogging prevention facilities. The Ministry of water resources pointed out that in accordance with the requirements of properly advancing the policy, we should give full play to the important role of water conservancy in stabilizing investment and expanding domestic demand by focusing on improving the river basin flood control project system and implementing major national water network projects. Therefore, we believe that under the background of “stabilizing the economy”, the pipeline industry is expected to accelerate the release of demand again, and a new business cycle of the industry may start.
In addition, our first subdivided high-end variety of steel, electrical steel, is the core magnetic material driving modern industry. In particular, high-grade non oriented electrical steel for new energy vehicles has extremely high technical barriers. Baosteel and Shougang master the core technology. Since new energy vehicles can only use high-grade non oriented silicon steel instead of all varieties, the consumption of new energy vehicles will account for 10% of the output of high grades in 2020. In addition, the motor energy efficiency upgrading plan (2021-2023) has been released. The improvement of motor energy efficiency standards will bring a lot of demand for high-grade non oriented silicon steel. It is recommended to pay attention to the main targets of electrical steel: Beijing Shougang Co.Ltd(000959) , Baoshan Iron & Steel Co.Ltd(600019) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Xinyu Iron & Steel Co.Ltd(600782) , Maanshan Iron & Steel Company Limited(600808) .
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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) .
Key special steel 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) . Building materials companies: Fangda Special Steel Technology Co.Ltd(600507) , Sansteel Minguang Co.Ltd.Fujian(002110) , Sgis Songshan Co.Ltd(000717) .
Municipal pipeline material company: Xinxing Ductile Iron Pipes Co.Ltd(000778) , Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) , Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Zhejiang Yongjin Metal Technology Co.Ltd(603995) , 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) .
Nonferrous Industry: continue to be optimistic about the rare earth and lithium plates under the tight balance between supply and demand and the demand for magnetic materials under the new energy system
Lithium sector, spodumene quoted us $2455 / ton this week, up 4%; Lithium hydroxide quoted 199500 yuan / ton, up 2.6%; The quotation of battery grade lithium carbonate was 255000 yuan / ton, up 4.1%. In rare earth sector, praseodymium and neodymium oxide, dysprosium oxide and terbium oxide were quoted at 848000 yuan / ton, 2.9 million yuan / ton and 11.315 million yuan / ton this week, up 0.36%, 0.35% and 2.72% respectively. The spot supply of raw materials in the upstream of new energy continues to be tight, and the state of continuous low inventory in the industrial chain will remain. Driven by the replenishment of inventory by downstream enterprises, we expect the price center of lithium and rare earth to continue to rise;
In the magnetic materials sector, the introduction of energy-saving motor policy under the guidance of double carbon and the pull of magnetic materials under the rapid development of new energy, wind power and photovoltaic energy storage in the future. We are optimistic about the pull of rare earth permanent magnet materials under the trend of high-efficiency energy-saving and miniaturization of motors, and the demand of new high-efficiency soft magnetic materials silicon steel and metal soft magnetic powder cores in the new energy era;
In terms of industrial metals, SHFE copper prices rose 0.90% this week to close at 70380 yuan / ton; SHFE aluminum price rose 0.97% to close at 20380 yuan / ton. This week, the high number of newly confirmed cases per day of covid-19 in the world fell, and the market expectation turned to optimism, driving the recovery of copper and aluminum prices. The press conference of the Ministry of industry and information technology stressed that the production capacity of raw materials and bulk products will only be reduced, and the carbon emission of electrolytic aluminum will be reduced by 5% by 2025, reconfirming the supply rigidity of industrial metals. At present, the Spring Festival is approaching, the downstream production demand is weak, and the accumulated storage of copper and aluminum will be opened in mid January; In the first quarter of next year, the policies related to supporting the economy will be gradually implemented. The market bottom after the policy bottom has come, and the bottom of fundamentals is expected to appear in the first quarter. At present, it is a good opportunity for industrial metal layout. Due to the characteristics of high energy consumption of aluminum, the sharp rise of natural gas price and electricity price in Europe has obviously promoted the sharp rise of aluminum price. Alcoa announced to stop production at the European aluminum smelter, involving a production capacity of 230000 tons; At present, the price of alumina has fallen, the price of aluminum has rebounded, the average profit of simulated electrolytic aluminum industry has reached 2933 yuan / ton, and the profit of electrolytic aluminum has continued to improve. At present, the valuations of basic metal related targets have reflected extremely pessimistic expectations. It is expected to usher in fundamental repair in the future. At the same time, superimposed valuation repair, the metal raw material industry will usher in a new round of market.
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China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) 、 Ganfeng Lithium Co.Ltd(002460) 、 Tianqi Lithium Corporation(002466) 、 Qinghai Salt Lake Industry Co.Ltd(000792) 、 Shenghe Resources Holding Co.Ltd(600392) 、 Rising Nonferrous Metals Share Co.Ltd(600259) 、 China Minmetals Rare Earth Co.Ltd(000831) 、 Poco Holding Co.Ltd(300811) 、 Hengdian Group Dmegc Magnetics Co.Ltd(002056) 、 Ningbo Jintian Copper (Group) Co.Ltd(601609) 、 Zhejiang Hailiang Co.Ltd(002203) 、 Guangdonghectechnologyholdingco.Ltd(600673) 、 Kbc Corporation Ltd(688598) 、 Zijin Mining Group Company Limited(601899) 、 Western Mining Co.Ltd(601168) 、 Aluminum Corporation Of China Limited(601600) 、 Yunnan Aluminium Co.Ltd(000807) 、 Henan Shenhuo Coal&Power Co.Ltd(000933) 。
Risk tips: the risk of sharp fluctuation in the price of upstream raw materials, the risk that the downstream demand is less than expected, and the risk of continuous spread of overseas epidemic.
