Main points:
This week, the Shanghai Composite Index fell by 1.19% and the Shanghai and Shenzhen 300 index fell by 2.14%. The steel sector fell by 0.63%; Among the sub sectors, ordinary steel sector decreased by 1.21%, and special material sector increased by 0.75%.
Steel market: under the continuous impact of the epidemic, the demand and production are affected, waiting for the later demand for repair
Affected by the continuous spread of the epidemic in Jilin, Shanghai, Hebei and other places, the steel demand continued to decline this week, and the steel trading was also greatly affected. The inventory of steel mills affected by the epidemic increased. According to the statistics of China Iron and Steel Industry Association, the steel inventory of key steel enterprises was 17.12 million tons in mid March, an increase of 440000 tons in ten days, while the supply side was also impacted to some extent, and the blast furnaces in Tangshan and other places were affected to some extent, The steel market as a whole is in a weak state of supply and demand. In the follow-up, we should continue to pay attention to the demand driven by the steady growth policy.
Steel prices rose slightly this week, with spot prices of rebar, hot rolling and medium sector rising by 0.61%, 1.37% and 0.98% respectively. The spot price of cold rolling decreased by 0.18%. Specifically, see the breakdown categories: in terms of hot-rolled coils, with the Limited Logistics in Tangshan, the accumulated warehouse and the lack of raw materials lead to the reduction of output; In terms of scrap steel, steel prices have risen locally in the past two days, and the profits of steel mills have rebounded. On the other hand, due to the difficulty of scrap transportation, the turnover days of steel plant inventory decreased; In terms of double coke, the support of raw material cost to the spot price of coke market has weakened, and some coke enterprises have fallen secretly.
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 498000 yuan / ton, with a weekly increase of 0.61%; The price of hot rolled coil is 518000 yuan / ton, with a weekly increase of 1.37%; The price of cold rolled coil was 559000 yuan / ton, with a weekly decrease of 0.18%; The price of medium board was 515000 yuan / ton, with a weekly increase of 0.98%. In the futures market, the active contract price of rebar was 501300 yuan / ton, with a weekly increase of 1.21%; The active contract price of hot rolled coil was 518000 yuan / ton, with a weekly increase of 1.37%; The active contract price of wire rod was 558000 yuan / ton, with a weekly decrease of 0.76%. The myspic composite steel price index was 184.73 points, with a weekly decline of 0.26%, of which the myspic long material index rose 0.73% and the myspic flat sector index rose 1.26%.
Raw material Market: the scrap market price is narrow and strong, and the coke market is stable in the short term
As of Friday, the price of Australian Pb powder in the spot market was 950.00 yuan / ton, with a weekly increase of 0.53%; The price of primary metallurgical coke is 371000 yuan / ton, with a weekly increase of 0%; The price of main coking coal was 295000 yuan / ton, with a weekly decline of 1.67%. In the futures market, the active contract price of iron ore was 856.00 yuan / ton, with a weekly increase of 2.70%; The contract coke price was 373350 yuan / ton, with a weekly increase of 1.15%; The active price of coking coal was 310600 yuan / ton, with a weekly increase of 1.80%.
Steel supply and demand: the rise of steel supply exceeds expectations, and the demand is expected to be released gradually
In terms of steel mill inventory this week, cold rolling, hot rolling, wire rod, medium and heavy sector and deformed steel bar increased by 13.97%, 2.18%, 0.70%, 3.31% and 2.01% respectively. In terms of steel output this week, the output of cold rolling and wire rod decreased by 1.74% and 1.68% respectively, and the output of hot rolling, medium and thick sector and thread increased by 2.50%, 2.09% and 3.37% respectively. At present, due to fair profits, relaxed production restrictions and the impact of the epidemic on demand is far greater than supply, the steel supply continues to increase, and it is expected to continue to rise in the future. However, due to the impact of the demand side, there is an upper limit on the supply increment. With the gradual relaxation of national epidemic prevention and control and the recovery of infrastructure investment at the macro level, the demand is expected to be gradually released and gradually improved if promoted by policies in the later stage.
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.
