The profit per ton of steel continued to decline, and the epidemic had an impact on short-term supply and demand
This week, the steel price was first suppressed and then increased. The recent tightening of China’s epidemic control measures had a certain impact on the supply and demand of the industry. From the demand side, the temporary shutdown of construction sites in some areas led to the suspension of demand release, and the rebar and hot coil meter need not rise but fall this week; On the supply side, although the normal production of most steel mills has not been affected, the epidemic has led to poor delivery of some steel enterprises and a backlog of orders on hand. In the later stage, we need to further track the changes of the epidemic situation. However, due to the strong willingness of the government to stabilize growth this time, we believe that the marginal repair of steel demand is relatively certain, but the impact rhythm of the epidemic does not change the direction. As far as the steel industry is concerned, due to the recent strong performance of coke and iron ore prices, there is great downward pressure on the profitability of steel mills. However, if the steel demand recovers smoothly in the later stage, it is expected that the steel price center will rise steadily and the profit per ton of steel will stop falling and rebound. As for the subdivided varieties, it is suggested to pay attention to the investment opportunities of deformed steel sector brought by infrastructure development. The main beneficiaries include Fangda Special Steel Technology Co.Ltd(600507) , Sgis Songshan Co.Ltd(000717) and so on. Their fields focus on the opportunities of water pipe industry. The main beneficiaries are Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Xinxing Ductile Iron Pipes Co.Ltd(000778) and so on. The ore sector benefits from Hbis Resources Co.Ltd(000923) .
The ore price bottomed out and rebounded, and the coke price is expected to operate stably
(1) iron ore: the iron ore inventory in port 45 this week was 154973000 tons, down 2.17 million tons month on month; Global iron ore shipments were 25.437 million tons, down 3.59 million tons on a weekly basis. Among them, the shipment volume of iron ore in Australia was 14.391 million tons, with a weekly increase of 599000 tons; Brazil’s iron ore shipments were 3.442 million tons, down 2.84 million tons on a weekly basis. At the same time, the molten iron output of 247 steel mills reached 2.207 million tons this week, with a week-on-week increase of 56400 tons. This week, the mine price fell sharply due to the intensification of the national epidemic. However, with the higher than expected economic data from January to February and the steady growth of the government’s statement, the pessimism reversed and pushed the bottom of the mine price to rebound. We expect that the steady growth policy and the relaxation of environmental protection and production restriction will promote the gradual increase of iron ore demand and the strong operation of ore price; (2) Coke: the fourth round of increase of 200 yuan / ton of coke has been fully implemented, the profits of coke enterprises have been repaired, and the production enthusiasm has been improved. Under the expectation of the recovery of hot metal production in the future, the demand support is strong. However, the current profit of the steel plant is under pressure, and the short-term coke price is expected to be stable.
Plate key data tracking
Demand has fallen: this week (March 14-march 18), the average trading volume of construction steel in China was 164100 tons, with a weekly decrease of 14300 tons. According to the calculation of Mysteel data, the apparent consumption of deformed steel bar was 3084000 tons, with a decrease of 249000 tons on a weekly basis; The apparent consumption of hot rolled coils was 3.069 million tons, with a decrease of 28000 tons on a weekly basis;
Supply picked up: the operating rate of blast furnaces in China (247) was 78.91%, with a rise of 8.06 PCT on a weekly basis; The capacity utilization rate of Tangshan steel plant was 57.74%, with an increase of 0.42pct on a weekly basis. The national weekly output of the five varieties was 9.548 million tons, up by 194000 tons month on month;
Profit performance fell: this week (3.14-3.18), the gross profit per ton of rebar was 109 yuan, down 8 yuan month on month; The gross profit per ton of hot-rolled sector was 59 yuan, down 88 yuan month on month; The gross profit per ton of cold rolled sheet was – 155 yuan, down 35 yuan month on month; The gross profit per ton of medium and heavy sector was – 58 yuan, down 29 yuan month on month.
Risk tip: terminal demand has fallen sharply, and the environmental protection production restriction policy is less than expected.
