The disclosure season of the annual report has begun, and the data of the steel industry is still hot. In 2021, thanks to the recovery of the global economy and the recovery of steel market demand, steel prices rose sharply. Although the rising prices of raw materials such as iron ore eroded some profits, the operating data of listed steel enterprises still increased significantly.
For the iron ore that fluctuated sharply last year, the agency predicts that the global supply and demand is expected to be relatively loose in 2022; In the case of more uncertainty caused by global economy, geopolitics and other factors, the whole black market may show a shock upward trend in the first half of the year.
listed steel enterprises’ net profit increased significantly
Recently, China’s listed steel enterprises have successively disclosed financial reports and forecasts. The net profit has generally achieved positive growth, and the net profit of many steel enterprises has doubled directly. Both Baoshan Iron & Steel Co.Ltd(600019) ( Baoshan Iron & Steel Co.Ltd(600019) . SH) and Hunan Valin Steel Co.Ltd(000932) ( Hunan Valin Steel Co.Ltd(000932) . SZ) have created the best level in history.
Jiangsu Shagang Co.Ltd(002075) ( Jiangsu Shagang Co.Ltd(002075) . SZ) released the performance express, which said that the revenue in 2021 was 18.487 billion yuan, with a year-on-year increase of 28.14%; The net profit attributable to the parent company was 1.08 billion yuan, a year-on-year increase of 66.32%. On March 11, Citic Pacific Special Steel Group Co.Ltd(000708) ( Citic Pacific Special Steel Group Co.Ltd(000708) . SZ) released its annual report for 2021. During the reporting period, it achieved a revenue of 97.3 billion yuan, a year-on-year increase of 27.58%; The net profit attributable to the parent company was 7.953 billion yuan, a year-on-year increase of 31.84%.
According to the data disclosed by Baoshan Iron & Steel Co.Ltd(600019) disclosure, the company expects to realize a net profit attributable to the parent company of 23.58 billion yuan to 23.98 billion yuan in 2021, with a year-on-year increase of 86% to 89% Baoshan Iron & Steel Co.Ltd(600019) pointed out that in the second half of the year, the company overcame the adverse effects of limited production and energy control and severe market fluctuations to the greatest extent, and the total profit of the whole year hit a record high.
The net profit of Angang Steel Company Limited(000898) ( Angang Steel Company Limited(000898) . SZ), Maanshan Iron & Steel Company Limited(600808) ( Maanshan Iron & Steel Company Limited(600808) . SH) and Beijing Shougang Co.Ltd(000959) ( Beijing Shougang Co.Ltd(000959) . SZ) has more than doubled, the increase of Bengang Steel Plates Co.Ltd(000761) ( Bengang Steel Plates Co.Ltd(000761) . SZ) has more than six times, and the increase of Inner Mongolia Baotou Steel Union Co.Ltd(600010) ( Inner Mongolia Baotou Steel Union Co.Ltd(600010) . SH) is expected to be 501.05% to 799.11%.
Angang Steel Company Limited(000898) it is estimated that the net profit attributable to shareholders of listed companies will reach 7.04 billion yuan in 2021, with a year-on-year increase of 256% Maanshan Iron & Steel Company Limited(600808) published performance express shows that the company’s unaudited revenue in 2021 was 113851 billion yuan, a year-on-year increase of 39.5%; The net profit attributable to the parent company reached 5.332 billion yuan, a year-on-year increase of 168.89%.
Beijing Shougang Co.Ltd(000959) ( Beijing Shougang Co.Ltd(000959) . SZ) performance express shows that the company achieved a revenue of 133.4 billion yuan in 2021, with a year-on-year increase of 66.85%; The net profit attributable to the parent company reached 7.02 billion yuan, a year-on-year increase of 293.19% Beijing Shougang Co.Ltd(000959) said that during the reporting period, the market share of the company’s strategic products and key products such as electrical steel, automobile sector and tinsector was further expanded and the profitability of the company was continuously improved; At the same time, strengthen cost control and absorb the impact of upstream price rise.
Hunan Valin Steel Co.Ltd(000932) issued a performance pre increase announcement at the end of January. It is estimated that the net profit attributable to the parent company is about 9.5 billion yuan to 9.9 billion yuan, with a year-on-year increase of 49% to 55% Hunan Valin Steel Co.Ltd(000932) said that the net profit attributable to the parent company of the company has created the highest level in history, and the annual profits of its core subsidiaries Valin Xianggang, Valin LIANGANG and auto sector company have reached a record high.
However, after the fourth quarter of 2021, the price of steel products has decreased significantly, and the prices of upstream coking coal, alloy and main energy media are still high, bringing considerable cost pressure to steel enterprises.
the black market may fluctuate upward in the first half
Looking back on 2021, the whole steel industry is not calm. Led by the restructuring of Anshan Iron and Steel Group and Benxi Iron and Steel Group, the restructuring and integration of the steel industry continues, the industrial concentration continues to improve, and the ultra-low emission and green low-carbon process of the steel industry continues to advance. However, the sharp rise and fall in the prices of raw materials and steel products throughout the year has also had a great impact on both upstream and downstream.
Analysts expect that in the first half of this year, the national steel and black commodity market will fluctuate upward.
In 2021, China’s crude steel output showed a trend of high before and low after, and the crude steel output decreased significantly in the second half of the year. Affected by this, iron ore prices continued to rise in the first half of the year and experienced shock and decline in the second half of the year.
In the middle and early ten days of May 2021, Platts iron ore price index soared to a historic high of US $233.1/ton, and China’s iron ore futures price also reached a high of 1358 yuan / ton, breaking the record. Since then, the price of iron ore has dropped significantly, and it has dropped more than 60% from its highest level by mid November.
Throughout the year, China’s crude steel output continued to decline, while iron ore imports decreased and prices increased. According to the data disclosed by the Department of raw materials industry of the Ministry of industry and information technology, China’s cumulative crude steel output reached 1.033 billion tons in 2021, a year-on-year decrease of 3.0%; The annual import of iron ore was 1.12 billion tons, a year-on-year decrease of 3.9%, and the average price reached US $164 / ton, a year-on-year increase of 55.3%.
According to the data provided by the metallurgical industry planning and Research Institute, in 2021, China’s iron ore supply gradually developed towards the trend of “external reduction and internal increase”, with a decline in demand, a decrease in imports and an increase in domestic production; The port inventory of iron ore has been maintained at more than 100 million tons for a long time, the external dependence of iron ore has decreased to 76.6%, and the self-sufficiency rate of domestic ore has gradually increased.
Since 2022, iron ore prices have continued the rise at the end of last year. The Platts iron ore price index rose to more than 150 US dollars per ton in mid March, and the price of China’s iron ore futures also exceeded 800 yuan per ton.
Li Xinchuang, party secretary and chief engineer of the metallurgical industry planning and Research Institute, predicts that the global iron ore supply and demand will be relatively loose in 2022, showing a dynamic balance in the medium and long term. At the same time, the supply and demand pattern of China’s iron ore will also change to a certain extent, that is, the demand for iron ore will gradually decline, the demand for high-grade iron ore will increase structurally, the “external increase and internal decrease” trend of iron ore supply will be gradually reversed, and the trend of scrap replacing iron ore will become increasingly apparent.
Li Xinchuang predicts that iron ore prices will show a “high before low” trend in 2022, with prices hovering at a high level throughout the year.
Chen Kexin, chief analyst of Lange Iron and steel Economic Research Center, predicts that in the first half of 2022, the national steel and black commodity market will fluctuate upward. The main influencing factors are: the steady growth measures bring stable demand to the steel industry, the impact of global inflation and the uncertainty caused by geopolitical risks.
Chen Kexin said that at present, the prices of bulk commodities around the world, including oil, natural gas, coal, non-ferrous metals, wheat and corn, have increased significantly, and the container freight prices of major global routes have also continued to rise. Under such an environment, the production and logistics costs of steel and black commodities have also been pushed up directly or indirectly, further giving birth to their price increase requirements. This upward driving force is difficult to end in a short time.
In addition, geopolitical conflicts and repeated global public health problems have brought more uncertainty to the market. The suspension of resource exports in some countries may bring a “supply shock” to steel and black goods.
