Main points:
This week, the Shanghai Composite Index t fell by 1.77%, and the Shanghai and Shenzhen 300 index fell by 0.94%. The steel sector fell by 4.62%; Among the sub sectors, the general steel sector decreased by 5.12%, and the special material sector decreased by 3.27%.
Steel market: the epidemic disturbs the short-term demand, and the long-term demand is still good
This week, the steel demand has been reduced due to the repeated impact of the epidemic, but it does not affect the long-term good trend. The high cost of raw materials maintains the high operation of steel prices. In the first half of this week, due to the strengthening of epidemic prevention and control and the obstruction of logistics and transportation, the price of steel market fell. In the second half of this week, with the signals of stabilizing macro economy, financial market and capital market transmitted by the financial commission of the State Council, the spot and futures prices of steel market rebounded. At present, the supply level continues to rise, and we still need to pay attention to the impact of the epidemic and the international situation on demand. In terms of supply, the continuous increase in output this week is in line with expectations. The increase in supply is mainly reflected in 1) the end of the Paralympic Games and the two sessions, and the impact of production restriction is weakened; 2) At present, the profits of blast furnace enterprises are acceptable; 3) The market has good expectations for “gold, silver and four”. Overall, the supply of steel mills is rising slowly, which is in line with market expectations. In terms of demand, with the strengthening of national epidemic prevention and control this week, the control of logistics and transportation has led to a decline in the demand of the steel market.
Steel prices fell slightly this week, and spot prices of rebar, hot rolling, cold rolling and medium sector decreased by 0.20%, 0.78%, 1.41% and 1.16% respectively. Specific categories: in terms of hot-rolled coils, the downstream procurement of hot-rolled coils tends to be cautious, and the apparent consumption is still much lower than that of the same period last year. It is expected that the short-term price or narrow range fluctuation will be the main trend; In terms of scrap steel, the recent unstable futures market price and poor profits of steel mills have dragged down the performance of scrap steel. However, considering the recurrence of economic benefits of scrap steel and the strong replenishment demand of steel mills under the epidemic, the scrap steel price has been supported. Generally speaking, it is expected that the short-term scrap steel price will remain stable; In terms of medium and heavy sector, steel mill inventory increased slightly this week and social inventory decreased slightly. It is expected that the price will be dominated by shock next week.
In terms of special steel, under the guidance of high-quality development policy, subdivision tracks such as pipeline and steel structure deserve attention. From the perspective of new infrastructure construction, China’s pipeline has entered the upgrading stage, the construction of rural water supply and drainage system is rough, and the construction of urban sponge pipe network is also close at hand. It is suggested to pay attention to Xinxing Ductile Iron Pipes Co.Ltd(000778) , Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) , etc. As the core metal material in the field of new energy vehicles, electrical steel is also a sector worthy of attention. The rapid development of new energy vehicles has driven the downstream demand for electrical steel. At present, the valuation of the sector is generally not high, and it is optimistic about the electrical steel sector for a long time. It is suggested to pay attention to Baoshan Iron & Steel Co.Ltd(600019) , Maanshan Iron & Steel Company Limited(600808) , Beijing Shougang Co.Ltd(000959) , etc.
The price of rebar in the spot market this week was 4950 yuan / ton, with a weekly decline of 0.20%; The price of hot rolled coil is 5110 yuan / ton, with a weekly decrease of 0.78%; The price of cold rolled coil was 5600 yuan / ton, with a weekly decrease of 1.41%; The price of medium sector was 5100 yuan / ton, with a weekly decrease of 1.16%. In the futures market, the active contract price of rebar was 4953 yuan / ton, with a weekly increase of 0.73%; The active contract price of hot rolled coil was 5129 yuan / ton, with a weekly decrease of 0.16%; The active contract price of wire rod was 5623 yuan / ton, with a weekly increase of 2.12%. The myspic composite steel price index was 184.73 points, with a weekly decline of 0.26%, of which the myspic long material index fell 0.12% and the myspic flat sector index fell 0.42%.
Raw material Market: the price of scrap steel market is mainly stable, and the coke market operates stably
This week, the scrap market price is mainly stable, and the coke market is stable. In terms of scrap steel, the recent unstable futures market price and poor profits of steel mills have dragged down the performance of scrap steel. However, considering that the recent scrap steel price is lower than hot metal, the economic benefits of scrap steel reappear, and affected by the epidemic logistics control, there is a strong demand for replenishment of steel mills around the country, and the bottom of scrap steel price is supported. In the short term, the scrap price is expected to be stable. In terms of coke, after the two sessions, the commencement of coke enterprises has recovered and the enthusiasm of factory production has been strengthened. However, the cost pressure of coke enterprises is still too high and the profit is too low. It is expected that the coke market will operate stably in the short term. As of Friday, the price of Australian Pb powder in the spot market was 945.00 yuan / ton, with a weekly decline of 5.12%; The price of metallurgical grade coke was 375 yuan / week, an increase of 10.00%; The price of main coking coal was 300000 yuan / ton, with a weekly increase of 15.38%. In the futures market, the active contract price of iron ore was 833.50 yuan / ton, with a weekly increase of 1.40%; The contract coke price was 369100 yuan / ton, with a weekly increase of 0.37%; The active price of coking coal was 305100 yuan / ton, with a weekly increase of 0.43%.? Steel supply and demand: steel inventory has increased again, and the weak demand fundamentals are difficult to change. In terms of steel plant inventory this week, hot rolling, wire rod, medium and thick sector and deformed steel bar increased by 5.46%, 6.45%, 3.00% and 5.29% respectively; Cold rolling decreased by 1.82%. In terms of steel output this week, the output of cold rolling, medium and heavy sector, wire rod, medium and heavy sector and thread steel decreased by 4.26%, 0.35%, 9.93%, 5.42% and 13.13% respectively. With the end of the Paralympic Games and the two sessions, as well as the release of production restrictions, the current supply is slowly recovering. However, due to the strengthening of epidemic prevention and control, the current demand fundamentals are still weak. Although various national policies release good news, many businesses still hold a cautious attitude, and the future demand fundamentals are weak and the pattern is difficult to change.
Investment advice
With the recovery of manufacturing demand superimposed on the background of carbon peak and carbon neutralization, the profit logic of the steel industry has been reconstructed, and steel enterprises have further benefited from the cyclical rotation. We are still optimistic about the steel sector for a long time. The national defense, military industry and aerospace industry have a broad domestic substitution space, and products such as superalloy, special stainless steel and ultra-high strength steel occupy an absolute dominant position. It is suggested to focus on the performance of the interim report and the leader of special steel in fulfilling the industry’s high vision: Fushun Special Steel Co.Ltd(600399) ; Traditional field leaders + popular emerging business targets are more favored by the market. It is suggested to focus on stainless steel rods and wires and mica lithium extraction leaders: Yongxing Special Materials Technology Co.Ltd(002756) ; And the high growth leader in the field of cold-rolled stainless steel: Zhejiang Yongjin Metal Technology Co.Ltd(603995) .
Risk tips
Covid-19 epidemic situation is repeated; The economic downturn accelerated; The price of raw materials fluctuates greatly; The demand for real estate steel fell sharply; Steel destocking process is blocked.
