Steel: the profit per ton of steel calculated by spot price has dropped significantly recently, which may reflect the market’s concern about the relaxation of production restriction in the later stage. The winter Paralympic Games and heating season are coming to an end in mid March. Under the background of steady growth, there is a possibility of loosening the production restriction policy. The huge profits of steel last year were mainly driven by the production restriction. If the production is unlimited, the current demand level may put great pressure on the profit per ton of steel. In terms of demand, apparent demand continues to rise seasonally month on month, with a year-on-year growth rate of about – 6%, which is barely in line with expectations. However, it should be noted that the sentiment of the steel market is relatively active in the near future. Last week’s table demand may include a certain downstream replenishment demand, and we still need to continue to pay attention to the changes of table demand in the future. At present, the medium and short-term real estate demand is still not optimistic, the recovery of infrastructure remains to be verified, and the growth of manufacturing industry may be limited under the condition of high base. Pay attention to the risk that the demand in peak season is lower than expected. With the steel price still at a high level, steel stocks fell sharply and lost the market this week, which may be related to the decline in the profit per ton of steel in the past two weeks. The first quarter report of steel enterprises is expected to rise month on month compared with the fourth quarter. On the one hand, the base in the fourth quarter of last year is very low, on the other hand, there are factors of inventory appreciation in the first quarter; However, due to the possible relaxation of production restriction in the second quarter and the high base in the second quarter of last year, the second quarterly report of steel enterprises may fall significantly year-on-year.
Coal: there is a global shortage of supply, and the rise in China’s and international coal prices continues. In terms of power coal, the supply is limited, the demand is strong, and the coal price continues to rise strongly. This week, the market continued its strong performance, the purchase prices of large groups increased, and the coal price continued to rise strongly. In terms of supply, the production and sales of coal mines in the origin are good, but they are still dominated by supply guarantee and long-term cooperation. The tight coal supply in the market and the release of downstream demand lead to the phenomenon of coal grabbing in the export market, and the prices rise frequently, which is expected to be supported in the future. In terms of import, Indonesia’s coal supply is gradually diverted to Japan, South Korea, Europe and the United States, and China’s import volume has decreased. From January to February, China imported 35.39 million tons of coal, a year-on-year decrease of 14% (or – 5.74 million tons). Considering the recent tense international energy situation, it is expected that the imported coal price will remain high, and the import will be significantly affected. In terms of demand, the resumption of work is still continuing, and there is a strong demand for replenishment of chemical industry and cement. Considering the off-season demand of subsequent power plants, the procurement rhythm of power plants is controlled. In the follow-up, we still need to pay attention to the downstream demand and the impact of Russia Ukraine issues on the international coal market. In terms of coking coal, downstream procurement is active, and the price rise in China and abroad continues. As of March 11, the price of Shanxi produced main coking coal depot in Jingtang Port has increased by 3350 yuan / ton (including tax), and the price of hard coking coal in Fengjing mine has increased by 30% week on week, and the rise continues. In terms of supply, affected by the environmental protection inspection in Inner Mongolia and the safety production restriction during the two sessions, the overall output of the market fell and the supply was tight; International supply is also generally tight, and coking coal prices continue to rise sharply. In terms of importing Mongolian coal, Ganqi Maodu port passed Customs on the 3rd of this week, with an average daily customs clearance of 174 vehicles (week on week + 31 vehicles), the low customs clearance picked up, and the quotation continued to rise. In terms of demand, the arrival of coke enterprises is poor, the purchasing power is still high, traders take goods actively, and the demand is strong. After that, we will continue to pay attention to the production and downstream demand of coke enterprises. In terms of coke, three rounds of rising and landing, and the market is still bullish. As of March 11, the price of secondary metallurgical coke in Tangshan was 3400 yuan / ton. The third round of price increase landed, and some coke enterprises in Northwest and Shanxi raised 200 yuan / ton in the fourth round again. In terms of supply, affected by the environmental protection control during the two sessions, the start-up of enterprises in some regions continued to decline slightly, coke enterprises continued to maintain a low inventory level, and production was weak. In terms of demand, due to the strict production restriction during the two sessions, the commencement of downstream steel mills and hot metal production decreased slightly. However, considering the poor arrival situation in the near future, the steel mills are still willing to replenish the stock. Overall, the short-term supply side is still limited, supporting the room for coke price rise. Follow up attention will continue to be paid to the resumption of production of downstream steel mills after the two sessions. Investment strategy: this week, the overall coal price continues to rise, and the import upside down phenomenon is more serious. The overall coal price still rose sharply this week, and the inversion of imported coal price is serious. The supply uncertainty caused by the situation in Ukraine has further exacerbated the energy dilemma in Europe. US President Biden has officially signed an executive order prohibiting the United States from importing energy from Russia. Some European countries are still waiting to consider the issue of energy security; Indonesia may issue another export ban in April or August due to China’s tight supply, and the global shortage of coal supply is still obvious. Overall, the stock capacity is a scarce resource. Coal stocks are generally valued at 5-6 times, and the stability of price and profit expectations is improved. It is suggested to actively layout coal stocks in 2022. In terms of individual stock recommendation, companies with a high proportion of long-term association have more stable performance growth, companies with a high proportion of coal in the market have more attractive valuation, and companies with large advantages of coal types or logic of output growth have strong competitiveness α In addition, the valuation of coal stocks will be positively improved. It is suggested to pay attention to: Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Shaanxi Coal Industry Company Limited(601225) , Yanzhou Coal Mining Company Limited(600188) , China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , Shanxi Coal International Energy Group Co.Ltd(600546) , Beijing Haohua Energy Resource Co.Ltd(601101) , power investment and energy. Metallurgical coal stocks are suggested to pay attention to: Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Jizhong Energy Resources Co.Ltd(000937) , Shanxi Coking Co.Ltd(600740) . Anthracite recommended attention: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . Coke stocks are suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015) .
Nonferrous Metals: Russia and Ukraine are slow, social finance is weak, and a large amount of attention will be paid to the interest rate meeting of the Federal Reserve next week. 1) The upward trend of raw material prices in the upstream of new energy has been continuously strengthened. The upward trend of industry prosperity remains unchanged: the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in China increased year-on-year: in February, the production and sales of new energy vehicles reached 368 / 334000 respectively, with a year-on-year increase of 2.0 times and 1.8 times; Affected by seasonal factors, the month on month growth rate decreased by 18.6% and 22.6% respectively, and the market share of new energy vehicles reached 19.2%. The price of lithium carbonate has accelerated upward again. The development of lithium resources in China may be accelerated. This week, the price of battery grade lithium carbonate increased by 2.5% to 517500 yuan / ton, the price of battery grade lithium hydroxide increased by 7.8%, the price of spodumene increased by 2.2%, and the price difference between lithium carbonate and lithium hydroxide narrowed rapidly. With the tightening of raw materials, the price of cobalt may rise further. The quotation of MB cobalt (standard grade) and MB cobalt (alloy grade) increased by 2.9% and 2.9% respectively month on month; China’s metal cobalt, cobalt sulfate and cobalt trioxide rose 0.6%, 3.0% and 1.6% respectively. The pattern of rare earth permanent magnet industry was reshaped. After the interview with the Ministry of industry and information technology last week, the market was in a strong wait-and-see mood this week, and the enthusiasm of downstream inquiry was poor. The quotation of praseodymium and neodymium oxide in China fell by 3.6% to 1065000 yuan / ton; The price of dysprosium oxide decreased by 3.2%, and the price of terbium oxide decreased by 2.6% China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) 3 month listing price, praseodymium and neodymium oxide 816000 yuan / ton, unchanged month on month. We believe that under the current supply and demand pattern, prices do not have the risk of falling sharply. Nickel: LME staged a close position market, and the price hit a record high. The metal nickel inventory remained low, and LME nickel staged a tight position market. The LME nickel price once exceeded US $100000 / ton. Then, LME Exchange announced to suspend nickel trading and cancel all nickel trading on March 8. The salt factory settled with LME price as imported raw material faced huge losses, and the market inquiry and offer stalled.
On March 9, Castle Peak said that it had allocated sufficient spot for delivery, with long and short reversal, and it is expected that the nickel price will gradually return to fundamentals. 2) Precious metals, market risk aversion eased, and the Federal Reserve is about to enter the interest rate hike cycle. This week, the conflict between Russia and Ukraine was suspended and the market risk aversion eased; In February, the US CPI continued to hit a 40 year high year-on-year, and since March, the Federal Reserve is about to enter the cycle of raising interest rates. As of March 11, Comex gold closed at US $1985.0/oz, up 0.94% month on month; COMEX silver closed at US $26.16/oz, up 1.44% month on month; SHFE gold closed at 404.78 yuan / g, up 2.57% month on month; SHFE silver closed at 5145 yuan / kg, up 1.64% month on month. 3) Base metals, Lun Ni incident led to market caution, and the Federal Reserve is about to enter the interest rate hike cycle. During the week, the Russian Ukrainian incident eased, and since March, the Fed is about to enter the interest rate hike cycle. Under high inflation, Europe and the United States are facing potential stagflation risks, and it is difficult to see the driving force of rapid inflation of bulk commodities; The lunni incident had a certain impact on the market, and major exchanges issued relevant regulatory measures. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by – 4.7%, – 9.4%, – 6.8%, – 6.4%, – 7.3% and 64.9% respectively this week, and the price fell as a whole.
Building materials: point of view: at present, we suggest paying attention to the three main lines of building materials & new materials investment. One is the main line of undervaluation defense, and cement and gypsum board are preferred (good cash flow and competition pattern); Second, the boom continues the main line, choosing glass fiber / quartz sand / carbon fiber; Third, the main line of brand building materials (it is expected that the double killing of valuation and performance will basically end, waiting for the inflection point of real estate sales and cost changes). 1) Cement demand has gradually recovered. This week, the clinker price along the river has ushered in the fourth round of rise. In the short term, it is expected to grow steadily. Under the warming expectation, the excess return of the sector is prominent. The industry has high prosperity toughness in 22 years (focusing on the enhancement of supply side coordination), and industrial integration + extension in the medium and long term. 2) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 3) The price of float glass has dropped slightly. In the short term, it is mainly to digest social inventory. In the follow-up, with the continuation of demand toughness, the price is still expected to maintain a good level; There is still price elasticity at the bottom of the photovoltaic glass cycle. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the photovoltaic glass field. 4) Brand building materials enter the strategic allocation time point. In terms of real estate, policy marginal relaxation + increased demand for affordable housing with non real estate developers as the main body, and the demand of the real estate chain is expected to gradually pick up (the end of real estate demand is expected to correspond to 2022q1). We believe that the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption in 2014 / 18, and this round corresponds to 2021q4). The double repair of the performance and valuation of brand building materials in 22 years is worth looking forward to. The leaders of each subdivision track have long interpreted the main logic of improving the concentration. The frequent repurchase, incentive and increase of industrial funds highlight the confidence of enterprises and have channels, brands Enterprises with excellent endowments such as capital and management have high certainty. 5) In the field of new materials, carbon fiber / high-purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand + domestic alternative resonance, and UTG welcomed the outbreak of demand. 6) The glass fiber cycle is weakened, the roving boom is expected to continue (wind power, automobile and other strong support for demand), the price of electronic cloth has fallen to the bottom range, and the current safety margin is high.
Chemical industry: the crude oil price has reached a new high, the global capital expenditure has recovered, and the oil service industry has fully benefited: China Oilfield Services Limited(601808) , Offshore Oil Engineering Co.Ltd(600583) ; Geopolitical factors disturb the global crude oil supply chain, and the fragility appears. It is suggested to pay attention to the cursor on oil and gas: CNOOC, Petrochina Company Limited(601857) ; The oil price fluctuates at a high level, and the coal and gas head route highlights the cost advantage: Satellite chemistry, Ningxia Baofeng Energy Group Co.Ltd(600989) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) .
The traditional bulk is still looking for the bottom, and the leading value crosses the cycle. As the main body of the chemical industry, the PPI of chemical raw materials and chemical products manufacturing industry in December 2021 increased by 23.8% year-on-year, which was positive for 12 consecutive months. In terms of downstream demand, from January to December 2021, the newly started area of houses decreased by 11.4% year-on-year, 0.04% month on month in December, the construction area increased by 5.2% year-on-year from January to December, 6.32% month on month in December, the completed area increased by 11.2% year-on-year from January to December, and 184.9% month on month in December; From January to December, the national automobile output increased by 4.8% year-on-year; From January to December, the retail sales of clothing, shoes, hats, knitwear and textiles increased by 14.2% year-on-year, with strong demand. On the supply side, the investment in fixed assets in the chemical industry continued to grow. From January to December, the investment in fixed assets in chemical raw materials and chemical products manufacturing industry increased by 15.7% year-on-year. It is suggested to focus on leading enterprises with excellent quality and core competitiveness, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Zhejiang Nhu Company Ltd(002001) , Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) , Hengli Petrochemical Co.Ltd(600346) . With the improvement of health awareness, sugar substitutes have become the general trend of the times. It is suggested to pay attention to the leading food additives in the business cycle Anhui Jinhe Industrial Co.Ltd(002597)
New materials: actively embrace industrial innovation and supply chain reconstruction. Promote scientific innovation and technological upgrading of high-end manufacturing. In this process, industrial innovation will put forward higher requirements for material properties and promote the rapid development of new material industry. It is suggested to focus on the subject of industrial innovation and supply chain reconstruction: Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Sinocera Functional Material Co.Ltd(300285) , Valiant Co.Ltd(002643) . In addition, it is recommended to focus on high-quality growth companies: Zhejiang Hailide New Material Co.Ltd(002206) .
Risk warning event: the economic growth rate is lower than expected; Excessive policy regulation; Renewable energy substitution, etc; Risk of coal import impact. Macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.
