Iron and steel: the demand for iron and steel has entered the off-season, the weekly demand and transaction have weakened, and the year-on-year decline has expanded. According to the recent survey and feedback of the steel market, traders’ willingness to store in winter is low, mainly due to the high absolute price of steel, concerns about the limited profit space or price decline risk in the peak season, and some traders reduce the annual agreed volume, which may lead to the increase of the proportion of self storage of steel enterprises this winter. In January, Chinese steel enterprises are expected to resume production in stages. If traders’ willingness to store in winter remains depressed during this period, it may lead to pressure on steel prices in the off-season. For the demand in the peak season of next year, although there is the expectation of infrastructure moving forward, the real estate uncertainty is still large, and the demand is still lower than expected. In the medium term, we tend to believe that the downward cycle of this round of steel demand has not been completed. It is suggested to look for opportunities in the growing new material industry and pay attention to Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Fushun Special Steel Co.Ltd(600399) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Yongxing Special Materials Technology Co.Ltd(002756) , etc.
Coal: the international coal market is again volatile. Power coal: the Chinese market is bottoming out. This week, the price of 5500 kcal thermal coal produced in QinGang Shanxi was 800 yuan / ton, down 140 yuan / ton on a weekly basis, continuing the decline. In terms of supply, more coal mines were shut down for maintenance at the end of the year, and the supply fell back. However, due to the supply guarantee policy, the coal storage in the power plant is still at a high level, and the purchasing enthusiasm is poor. In addition, the shipping cost is upside down, and the traders and platforms are negatively shipping. A new round of price reduction has been started in the main producing areas, and the price of most coal mines ranges from 50-120 yuan. In terms of demand, the inventory of the power plant continued to decline, but the inventory was still high, the daily consumption growth was lower than expected, and the price was generally depressed to slow down the purchase. Overall, the Chinese market is in the process of bottoming. In terms of coking coal, both supply and demand support the continuous improvement of the market. This week, the price of mainstream coking coal was flat, and the price (including tax) of Shanxi main coking coal warehouse in Jingtang Port was increased by 2450 yuan / ton. In terms of supply, due to the completion of the annual task of coal mines in the main producing areas, superimposed on the impact of safety and environmental protection, production suspension and production restriction continued, and the supply decreased; In terms of import, the customs clearance at Ganqi Maodu port is still low. The customs clearance this week lasted 4 days, with an average of 87 vehicles per day (mom-13). The tradable resources at the port have been very limited, the coal price is stable at a high level, and the Mongolian coal market is stable, medium and strong. In terms of demand, the second level early warning weather has been lifted in Tangshan, the blast furnace is expected to resume production, and the demand for coke is expected to gradually increase. This year, the coal mine holiday is ahead of schedule, and most coke enterprises actively replenish the warehouse to support the good operation of coal prices. On the whole, China’s coking coal market sentiment is high, the supply is further tightened, the procurement is active, and the coal price is stable at a high level. Follow up attention will be paid to the resumption of downstream coking enterprises and the production restriction of the Winter Olympic Games. In terms of coke, the supply continued to tighten and the demand for replenishment increased. As of December 31, the price of secondary metallurgical coke in Tangshan was 2660 yuan / ton, up 100 yuan / ton on a weekly basis, and the national average profit per ton of coke was about 58 yuan / ton. In terms of supply, the first round of coke price increase has been basically implemented, the production enthusiasm has been improved, and the operating load has increased slightly. However, the price of raw coal has increased, the cost has increased, the coking profit has not improved, some coke enterprises are reluctant to sell, and the continuous disturbance of environmental protection and production restriction policy has restrained the recovery of supply side. In terms of demand, near the end of the year, the horizontal control of crude steel and the dual control of energy consumption have basically ended. At the same time, the secondary early warning of environmental protection has been lifted in Tangshan. The commencement of steel plant has rebounded slightly this week. There is also an expectation of increasing production in the South steel plant in the new year. It is expected that the demand for Coke will gradually increase. On the whole, the coke supply is still tight. With the increase of the start-up demand of the steel plant, the coke price continues to rise. Follow up attention will be paid to the resumption of work and production of the steel plant and the production restriction of the Winter Olympic Games. Investment strategy: at the beginning of the new year, the international coal market was volatile. The Ministry of energy and mineral resources of Indonesia issued a notice. Due to the shortage of coal supply for Chinese power plants from January to February this year, in order to avoid China’s power crisis, it was decided to ban all coal exports from January 1 to 31, All coal production is supplied to Chinese power plants (Note: the Indonesian government requires domestic coal enterprises to supply domestic power plants at a low price, while the international price is high, and the enthusiasm of enterprises to supply China is weak). Indonesia is the world’s largest exporter of thermal coal, with a total output of 560 million tons in 2021 (as of December 10), which is expected to be more than 600 million tons in the whole year, including 360 million tons of coal from January to October. China has imported 293 million tons of coal in the first 11 months, including 178 million tons from Indonesia, accounting for 60% of the total import. It imports about 16 million tons of coal from Indonesia every month. Considering that China’s monthly China Shipbuilding Industry Group Power Co.Ltd(600482) coal supply is about 300 million tons, Indonesian coal accounts for about 5% of China’s supply, of which coastal areas are more dependent. Although the Indonesian government’s move is still controversial in China, it also shows the current situation of insufficient supply and demand in the international coal market. We believe that this event has a certain boost to China’s short-term coal price. In the medium and long term, under the background of lack of planned investment, the constraints on the coal supply side are strong. Under the background of small annual growth in demand, coal will be a scarce resource in the next few years, and the stock capacity or high profits. The increase of the benchmark price of the annual long-term association also ensures the ability of the industry to maintain high profitability. Under the dual carbon goal, coal enterprises urgently need to transform, invest in energy Yankuang, Shenhua, Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) , Shanxi Meijin Energy Co.Ltd(000723) and others mainly focus on new energy operation and hydrogen energy. The coal industry has the advantages of strong cash flow and rich land resources in new energy operation, and has the ability and willingness. The transformation of new energy direction is conducive to improving the overall sector valuation level (at present, the PE valuation is 5-6 times), and the coal assets need to be repriced, Continue to be optimistic about the investment value of the sector. Thermal coal stocks are recommended to pay attention to: Shaanxi Coal Industry Company Limited(601225) , Yanzhou Coal Mining Company Limited(600188) , China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , power investment and energy, Beijing Haohua Energy Resource Co.Ltd(601101) . 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 recommended to pay attention to: Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015) .
Nonferrous Metals: Tesla raises the price again; The implementation of Shanxi Guoxin Energy Corporation Limited(600617) automobile subsidy policy; Lithium carbonate preparation accelerates the price rise; The overseas epidemic is heating up rapidly. The demand boom continued to rise, and the price transmission was smooth. In November, China produced and sold 434000 and 427000 new energy vehicles respectively, with a year-on-year increase of 1.3 and 1.2 times respectively. The subsidy policy for medium Shanxi Guoxin Energy Corporation Limited(600617) vehicles was implemented. In 2022, the subsidy for non-public new energy vehicles decreased by 30% on the basis of 2021, the subsidy for public new energy vehicles decreased by 20%, and the requirements for technical parameters remained unchanged, The subsidy for new energy vehicles will continue until December 31, 2022, and the vehicles licensed after 2023 will no longer be subsidized, which is in line with the expectation; According to SMM, the price of China’s battery industry has basically increased uniformly recently. Recently Byd Company Limited(002594) , GuoXuan, Penghui and Funeng have successively issued price increase letters. The end of the year is approaching, and the price of lithium carbonate has accelerated upward again. This week, the price of battery grade lithium carbonate has increased by 10.6% over last week, the price of battery grade lithium hydroxide has increased by 10.1% over last week, and the price of spodumene has increased by 4.9% over last week; 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 0.1% and 0.1% month on month respectively. The tax price of metal cobalt in China has reached 536500 yuan / ton; China’s metal cobalt, cobalt sulfate and cobalt trioxide rose by 1.2%, 2.5% and 0.5% respectively; The pattern of rare earth permanent magnet industry was reshaped. In the spot market, the quotation of praseodymium and neodymium oxide in China increased by 1.3% to 851000 yuan / ton compared with last week; In terms of medium and heavy rare earths, the quotation of dysprosium oxide and terbium oxide increased by 0.3% and 0.9% compared with last week. The spot circulation in the market is limited, and large manufacturers are willing to support the price. The shortage of antimony raw materials remains unchanged. The price of antimony concentrate in China was 57000 yuan / ton, and the price of antimony ingot was 73500 yuan / ton, unchanged from last week. At present, it is difficult for most smelters to replenish raw materials, and the price has stopped falling and stabilized. Base metals, driven by both supply and demand, recorded the largest annual increase since 2009. During the week, Christmas and New Year holidays, transactions were light; China’s monetary policy has made great efforts, with obvious marginal improvement, supporting copper prices under the effect of the end of the year. In 2021, driven by tight supply and increased demand, industrial metal prices recorded the largest annual increase since 2009. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose and fell by 1.6%, – 0.2%, 0.8%, 0.6%, – 0.4% and 3.1% respectively this week, and the prices rose and fell each other; The annual increases and decreases were 25.8%, 42.0%, 15.2%, 28.6%, 91.6% and 25.0% respectively. Aluminum and tin increased the most.
Building materials: this week’s view: focus on relevant sectors with large demand elasticity under the support of steady growth of infrastructure investment. The margin of real estate policy is getting better, the real estate chain is expected to be repaired, and the price rise is gradually falling / the price of raw materials is falling, the brand building materials are gradually entering the layout time point, and the leading certainty is high. The prosperity of carbon fiber / quartz sand / glass fiber continues and continues to be recommended. The price of glass plate rebounded at the bottom, focusing on the expansion of new categories such as photovoltaic, electronics and pharmaceutical glass. The expected marginal improvement of real estate + the acceleration of special bond issuance is expected to support the cement demand. At present, the valuation of the cement sector is cost-effective, and the leader of volume increase logic is preferred. The cost side of the water reducing agent sector is declining rapidly, and the leader with new category expansion logic is preferred. 1) For the carbon fiber industry, we believe that the investment logic of the civil carbon fiber industry lies not only in the high growth of demand (wind, light, hydrogen, etc.), but also in the “favorable climate, favorable location and harmonious people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence. Under the barriers of high technology, technology and capital, those who get the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the penetration rate of the industry increases or depends on changing “price” for “demand”. We suggest paying attention to the carbon fiber leader Zhongfu Shenying (to be listed), Weihai Guangwei Composites Co.Ltd(300699) , precursor leader Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Sinofibers Technology Co.Ltd(300777) , and Hengshen shares; Carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; Downstream composite manufacturers Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new materials, etc. 2) For consumer building materials, on the one hand, the end of the real estate policy has been realized, the financing end of the real estate industry has improved significantly, and the pessimistic expectation of the real estate chain is expected to continue to repair. On the other hand, with the gradual implementation of price increases and the decline of raw material prices, we judge that the profitability of consumer building materials is expected to gradually improve, and the industry will gradually enter the layout time point. Consumer building materials leaders have advantages in brand / Channel / cost / capital. They have the ability to cross the cycle in terms of competitiveness and growth, focusing on leading enterprises Beijing New Building Materials Public Limited Company(000786) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Skshu Paint Co.Ltd(603737) , Monalisa Group Co.Ltd(002918) , Keshun Waterproof Technologies Co.Ltd(300737) , Guangdong Dongpeng Holdings Co.Ltd(003012) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Yonggao Co.Ltd(002641) , Wangli Security & Surveillance Product Co.Ltd(605268) . 3) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, the supply side is newly added or limited, and the price of quartz sand is expected to rise steadily; The demand for semiconductors and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share, and Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) are mainly recommended. 4) For the glass fiber industry, the price runs smoothly this week, and individual manufacturers cut prices slightly. We expect that the new production capacity of roving is limited and the demand continues to improve. Under the low inventory, the high outlook of roving is expected to continue. We expect that the new production capacity of electronic yarn will be about 150000 tons in 22 years, and there will still be new production at the supply end. It does not rule out that the subsequent price of electronic yarn will still be loose, but it is expected that the overall production capacity will remain at a good level in 22 years. Focus on China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) , Jiangsu Changhai Composite Materials Co.Ltd(300196) , Shandong Fiberglass Group Co.Ltd(605006) . 5) For the glass industry, we judge that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the current high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, according to the data of China State Construction Engineering Corporation Limited(601668) and Industrial Glass Association, in the production line, the production capacity with kiln age of 8-10 years / more accounts for 14.1% / 14.5% respectively, and the cold repair of the old production line may lead to supply contraction. At present, the price and cost of glass are close. Under the high cost of raw materials / energy, manufacturers are willing to support the price, and the glass price is expected to maintain a good level. Focus on the medium and long-term growth brought by various types of glass (photovoltaic, electronic, pharmaceutical glass, etc.); Focus on Zhuzhou Kibing Group Co.Ltd(601636) . It is recommended to pay attention to Csg Holding Co.Ltd(000012) , Xinyi Glass, Luoyang Glass Company Limited(600876) , Triumph Science & Technology Co.Ltd(600552) , etc. 6) For the cement industry, the quota of new special bonds will be issued in advance in 2022, the infrastructure is expected to gradually develop, the marginal relaxation of the real estate financing end may lead to the expected improvement of the market, and the cement demand is expected to be supported; In addition, the role of policy regulation of coal price has been fully demonstrated. When the cement price center is expected to remain high, the cost pressure of enterprises is expected to ease month on month. We continue to be optimistic about the valuation and repair opportunities of the cement sector, focusing on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Guangdong Tapai Group Co.Ltd(002233) , Xinjiang Tianshan Cement Co.Ltd(000877) , and it is suggested to focus on Gansu Shangfeng Cement Co.Ltd(000672) , Jiangxi Wannianqing Cement Co.Ltd(000789) and China building materials. 7) For the water reducing agent industry, the price of raw material ethylene oxide has dropped by about 25% from a higher point, and there is still a possibility of decline; By the end of September, the centralized price increase of major manufacturers is expected to be gradually implemented, and the industry profit is expected to improve. Leading companies have obvious competitive advantages, and new products benefit from the improvement of downstream demand, which is expected to maintain high growth. It is mainly recommended Sobute New Materials Co.Ltd(603916) . 8) It is suggested to pay attention to Zhejiang Walrus New Material Co.Ltd(003011) : the company is the leader in the production and export of PVC flooring, and the growth elasticity of production capacity will be highlighted in the future. Although in the early stage, due to the rise of raw material prices, exchange rate and shipping pressure, the profit is under pressure, but at present, the export chain benefits from a high outlook and the sea freight decreases, the enterprise gradually adjusts the price, the cost side also drops, and the profit is expected to be gradually repaired.
Chemical industry: 1) the crude oil center has risen, so it is recommended to pay attention to China Oilfield Services Limited(601808) , Offshore Oil Engineering Co.Ltd(600583) . The traditional bulk is still looking for the bottom, and the leading value crosses the cycle. Affected by the economic cycle and the global spread of the epidemic, traditional bulk products in the chemical industry are in a downward trend. It is suggested to pay attention to the leading enterprises with excellent quality and core competitiveness: in the downward period of the cycle, the leading enterprises expand their advantages, and the valuation is obviously low, or cross the cycle, 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) 2) new materials: actively embrace industrial innovation and supply chain reconstruction. Scientific and technological progress promotes the innovation of terminal demand and drives the upgrading and development of high-end manufacturing industry. 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 sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase. The economic growth rate is lower than expected; Excessive policy regulation; Renewable energy substitution, etc; Coal import impact risk. Macroeconomic fluctuation, import, environmental protection and other policy fluctuation risks, gold price fluctuation risks, new energy vehicle sales are lower than expected risks, and the premise assumptions of industry supply and demand calculation are lower than expected risks. Macroeconomic downside risks; The epidemic has led to lower than expected demand; Risk of relaxation of production restriction and new production capacity; Risk of poor capital turnover of 2B end enterprises. Macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.
