Investment suggestion: continue to be optimistic about steel stocks in the medium term. Against the backdrop of historically high profits and historically low valuations, the possibility of carbon neutralization has brought the ceiling of industry supply. In addition, the raw material side has contributed cost dividends again, and steel stocks will usher in a wave of sector opportunities for double rise in performance and valuation. Optimistic about the low value of high dividend ordinary steel, raw materials and some special steel. The first is Fangda Special Steel Technology Co.Ltd(600507) , Hunan Valin Steel Co.Ltd(000932) , Xinyu Iron & Steel Co.Ltd(600782) , Maanshan Iron & Steel Company Limited(600808) , Baoshan Iron & Steel Co.Ltd(600019) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Citic Pacific Special Steel Group Co.Ltd(000708) , etc; Pay attention to Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) , Inner Mongolia Eerduosi Resources Co.Ltd(600295) , Hbis Resources Co.Ltd(000923) , etc.
Industry view: high frequency demand bottomed out and rebounded. In the past few weeks, the epidemic factors and terminal demand have been significantly restrained. However, with the expected peak of the epidemic, the high-frequency transaction data of steel last week rebounded month on month. Considering the gradual deepening of the traditional peak season, the subsequent seasonal demand will continue to rise. Taking the above two factors into account, we judge that China's demand has basically bottomed out. The probability will fluctuate upward in the next quarter. Under the condition of significantly low inventory, the steel price will rise further in the future, and the gross profit of steel stocks will meet the expansion again. Considering the steel price, gross profit, performance, dividend and other factors, the configuration value of the steel sector has increased significantly, and we are optimistic about the varieties with strong performance, high dividend and high elasticity.
Market review: last week (March 27 - April 1), Shenwan steel rose 2.5%, leading the Shanghai Composite Index by 0.3%. The stocks with the highest growth were Inner Mongolia Eerduosi Resources Co.Ltd(600295) (15.0%), Xinxing Ductile Iron Pipes Co.Ltd(000778) (10.0%), Citic Pacific Special Steel Group Co.Ltd(000708) (7.3%). Last week, the prices of main contracts of screw thread, hot coil, iron ore and coke futures changed by 4.3%, 2.8%, 13.2% and 10.5% respectively compared with the previous week (March 20-March 25); The profits of thread and hot-rolled sector changed by 15.1% and 7.4% respectively compared with the previous week.
Industry trends:
General steel: last week, the social inventory of steel was 16.86 million tons, a month on month decrease of 1.3%; Among them, the long timber inventory was 11.97 million tons, a month on month decrease of 0.7%; Plate inventory was 4.89 million tons, a month on month decrease of 2.7%. In mid March, the average inventory of steel mills was 17.12 million tons, an increase of 2.7% month on month. Last week, the shipment volume of 237 steel traders nationwide was 199000 tons, an increase of 10.4% month on month; Last week, the cargo volume of terminal line snails in Shanghai was 7000 tons, a month on month decrease of 45.6%. The cost lag gross profit of thread, hot rolling, cold rolling and medium and heavy sector tracked are 807, 927, 652 and 823 yuan / ton respectively.
Overseas steel price: last week, China's steel price composite index was 189.53, an increase of 1.6% month on month.
Iron ore: last week, the shipment volume of iron ore from Australia, Pakistan and India was 26.02 million tons, an increase of 18.5% month on month; The arrival volume of 6 ports in the North was 8.674 million tons, a month on month decrease of 15.2%. Last week, the iron ore port inventory was 15389 tons, a month on month decrease of 0.8%. Last week, the average daily dredging volume of imported ore in the port was 2.6919 million tons, an increase of 1.9% month on month.
Coking coal and coke: last week, all coke enterprises mainly actively shipped, the subsequent epidemic improved, the demand for coke warmed up, and the coke price is afraid to continue to run strong. The overseas coking coal market continues to be weak.
With the increase of manganese ore price last week, the number of manganese alloy manufacturers will increase without taking the initiative to enter the market at a low price. If manganese alloy manufacturers do not enter the market at a high price, there will be a loss. The price of ferrosilicon runs stably.
Special steel: last week, the price of the national excellent special steel market was stable and upward. In terms of price adjustment, the price of steel mills was mainly increased. In terms of the market, affected by public health events, many markets across the country were affected, some markets were stagnant, the transaction was bleak, and the automobile transportation was affected to a certain extent. However, the market price increased due to the cost support of steel mills and the rise of futures prices. Next week, the price of the national excellent and special steel market will fluctuate at a high level.
Stainless steel: last week, although the nickel price was slightly higher than the previous high price, the short-term import window has not been opened. Due to the insufficient supply of resources and the impact of the epidemic on freight logistics, the nickel price is expected to remain high, dominated by range shocks. Chrome ore market is generally strong.
Risk tip: real estate decline; The recovery of manufacturing industry was less than expected
