Investment strategy: according to the data of China Iron and Steel Association, the average daily output of pig iron of key steel enterprises in late December was 1.886 million tons, with a month on month increase of 15%. The high point of this caliber in 2021 was in the range of 2.05-2.1 million tons (2021q2) and the low point was about 1.6 million tons (2021q4). It reflects that the blast furnace production of key steel enterprises has obviously resumed. From a subregional perspective, the resumption of production of steel enterprises in December was mainly concentrated in non North China. At that time, the blast furnace operating rate in Hebei was still low due to air pollution control, and the blast furnace operating rate in Tangshan also rebounded after January. The resumption of production of steel enterprises superimposed the winter storage and replenishment of raw materials before the Spring Festival, which promoted the rebound of iron ore. The resumption of production of blast furnace in a large area squeezed the share of electric furnace, the profit per ton of steel fell from a high level, and some electric furnace steel production capacity had no profit. Steel prices rebounded slightly this week. On the one hand, the rising cost of raw materials promoted, and on the other hand, the winter storage of steel traders changed from cold to hot. In the later stage, the space for the rise of steel prices and raw materials may be limited, and the winter storage will come to an end. The rise of raw materials is not sustainable, and the resumption of production of steel enterprises also suppresses the processing fee per ton of steel. The short-term rebound of steel stocks is mainly caused by the expectation of stable growth. Combined with the medium-term trend of steel prices in the future, it is judged to be an oversold rebound. It is suggested to look for opportunities in the growth new material industry and pay attention to Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Fushun Special Steel Co.Ltd(600399) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Yongxing Special Materials Technology Co.Ltd(002756) .
One week market review: this week, the Shanghai Composite Index fell 1.65%, the Shanghai and Shenzhen 300 index fell 2.39%, and the Shenwan steel plate rose 2.15%. Since the beginning of the year, the CSI 300 index has fallen by 1.65%, the Shenwan steel plate has fallen by 2.39%, and the steel plate has outperformed the CSI 300 index by 4.54pct.
Beginning of accumulation in the off-season: the weekly average trading volume of national construction steel this week was 147600 tons, with a month on month increase of 7000 tons. The social inventory of the five varieties was 8.872 million tons, an increase of 139400 tons month on month. This week, driven by the period of snail, the market sentiment has warmed up, and the trading volume and apparent consumption of building materials have increased slightly. However, according to the survey, more than 30% of the projects have been shut down, and the construction site will generally have a holiday after next week, and the future demand will still show a seasonal decline. In terms of inventory, under the winter storage and off-season, the accumulation of inventory has begun, and the inventory will continue to increase in the future.
Differentiation of production level of blast furnace and electric furnace: this week, the blast furnace operating rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 74.20% and 50.79% respectively, with a month on week increase of + 4.16pct and + 8.73pct; This week, the blast furnace capacity utilization rates of mysteel247 steel enterprises and Tangshan Steel Plant were 77.89% and 60.93% respectively, with a month on week increase of + 2.10pct and + 5.99pct. The operating rate of 71 home appliance arc furnaces this week was 44.47%, with a month on week ratio of -0.27pct; The capacity utilization rate was 44.75%, down from -2.46pct last week. This week, under the background of low inventory, considerable profits and relaxation of environmental protection and production restriction, the downstream steel rolling enterprises have strong enthusiasm for resumption of production, the production level of blast furnace has been continuously improved and the steel output has increased. However, after Tangshan and Handan lifted the emergency response to heavily polluted weather last weekend, it was started again this week. Therefore, the production level in North China will fall down next week. In terms of electric furnace, the price difference between pig iron and scrap remained high, the electric furnace plant suffered losses and the production level decreased.
Steel price fluctuated in a narrow range: myspic comprehensive steel price index increased by 0.32% on a weekly basis, including 0.25% for long materials and 0.42% for plates. Shanghai rebar 4770 yuan / ton, an increase of 10 yuan / ton on a weekly basis, an increase of 0.21%. Shanghai hot rolled coil 4930 yuan / ton, an increase of 70 yuan / ton on a weekly basis, an increase of 1.44%. Driven by the futures market this week, the market sentiment has warmed up and the steel price rose slightly. With the gradual contraction of downstream demand, winter storage will dominate the trend of steel price. At present, although some regions have high enthusiasm, it is generally believed that the cost of winter storage is high and the willingness to raise prices is low. It is expected that the steel price will remain volatile in the future.
Recovery of ore price: platts62%128.25 USD / T this week, with a weekly increase of 9.25 USD / T, and the price difference between high and low products expanded. Last week, the shipment volume of Australia and Brazil was 25.552 million tons, an increase of 395000 tons month on month, and the arrival volume was 12.855 million tons, an increase of 1.852 million tons month on month. The latest steel mill imported ore inventory days were 30 days, unchanged from the last time. Tianjin Zhunyi metallurgical coke was 3010 yuan / ton, an increase of 300 yuan / ton compared with last week. Scrap steel was 3230 yuan / ton, an increase of 110 yuan / ton compared with last week. This week, iron ore operated strongly. From a fundamental point of view, with the improvement of the production enthusiasm of downstream steel enterprises, the hot metal output increased significantly, and the inventory of imported iron ore ports showed a trend of destocking.
Profit fell for four consecutive weeks: the profit of mainstream steel fell for four consecutive weeks this week. According to our simulated steel data, during the week, the prices of iron ore, coke and scrap at the raw material end generally rose, and the billet cost increased. The weekly average price at the finished product end rose and fell, but due to the significant increase at the raw material end, the profit per ton of each variety of steel fell, of which the gross profit of hot rolled coil (3mm) decreased by 97 yuan / ton, and the gross profit margin decreased to 12.95%; The gross profit of cold rolled sheet (1.0mm) is reduced by 112 yuan / ton, and the gross profit rate is reduced to 8.80%; The gross profit of deformed steel bar (20mm) is reduced by 145 yuan / ton, and the gross profit margin is reduced to 14.31%; The gross profit of medium and heavy plate (20mm) is reduced by 157 yuan / ton, and the gross profit margin is reduced to 11.50%.
Risk tip: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase.
