Steady growth is expected to lead to significant relative gains in the sector
This week, although the Shanghai stock index continued to callback, the steel sector bucked the trend and rose 2.6%, with obvious relative income. The key reason driving the rise of the sector is the government's policy expectation of stable growth. In particular, recently, the Ministry of water resources has determined that one of the priorities of the work in 2022 is to implement the major national water network project, "accelerate the construction of the national water network, promote the construction of the provincial water network, and open up the \'last kilometer\' of the national water network." The statement ignited the market's enthusiasm for investment in the pipe network sector, and the main benefit targets such as Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Xinxing Ductile Iron Pipes Co.Ltd(000778) rose continuously. In our previous report, we stressed that commodity or stock prices in the off-season are often driven by macro policies or environmental protection and production restriction, and the early correction range of the steel sector is large. At the time of the government's increasing willingness to stabilize growth, it already has a good cost-effective advantage. It is suggested to pay attention to the valuation and repair opportunities of the infrastructure sector. The main beneficiaries are Fangda Special Steel Technology Co.Ltd(600507) , Sgis Songshan Co.Ltd(000717) Hunan Valin Steel Co.Ltd(000932) etc. In addition, it should be noted that the rise of this round of plate is mainly driven by macro expectations. From the industrial level, recently, due to the continuous strength of raw material prices, the profits of steel enterprises have fallen rapidly from the high point by more than 300 yuan since December, and the profits per ton of steel in the off-season show a significant narrowing trend. On the one hand, the steady growth in 2022 will promote the upward revision of hot metal production, on the other hand, the severe environmental protection production restriction in 2021 will be greatly reduced, and the profitability of steel mills will be objectively damaged. It is suggested to focus on investment opportunities in some fine molecular segments that are not affected by supply relaxation, such as oil and gas pipelines, stainless steel and other fields. On the other hand, supply relaxation will benefit raw material varieties such as iron ore, The main beneficiaries are Hbis Resources Co.Ltd(000923) , Inner Mongolia Dazhong Mining Co.Ltd(001203) , etc.
The ore price fluctuates at a low level, and the coke price is expected to be strong
(1) iron ore: the iron ore inventory in port 45 this week was 156051000 tons, down 52000 tons month on month. The global shipment of iron ore was 34.665 million tons, an increase of 7000 tons on a weekly basis. Among them, Australia shipped 19.266 million tons, with a weekly increase of 1.372 million tons; Brazil shipped 6.286 million tons, down 977000 tons on a weekly basis. At the same time, the molten iron output of 247 steel mills this week reached 2.0852 million tons, up 55100 tons on a weekly basis. This week, the inventory of iron ore port decreased by 52000 tons month on month, the capacity utilization rate of steel plant continued to rise, the overall ore price rose slightly, and the ore price was relatively strong under the background of steel plant resumption of production. (2) Coke: due to the impact of environmental protection and production restriction, the cost of coke enterprises continues to rise, and the willingness to raise is strong. The second round of increase this week landed, with a cumulative increase of 300-320 yuan / ton. The short-term coke price is expected to continue to rise.
Plate key data tracking
Weak demand operation: this week (1.4-1.7), the average trading volume of national construction steel was 147600 tons, with a week-on-week increase of 7000 tons. According to the calculation of Mysteel data, the apparent consumption of deformed steel bars was 2.709 million tons, with a week on month increase of 1.2%; The apparent consumption of hot rolled coil was 3.251 million tons, with a decrease of 1.84% on a week on month basis;
Supply picked up month on month: the national blast furnace operating rate (163) was 45.99% (the data were not updated this week); The capacity utilization rate of Tangshan steel plant was 60.93%, and the week on month ratio increased by 5.99pct. The national weekly output of the five varieties was 9.279 million tons, up 236700 tons month on month;
Profit continued to decline: this week (1.4-1.7), the gross profit per ton of rebar was 529 yuan, down 129 yuan month on month; The gross profit per ton of hot rolled plate was 491 yuan, down 81 yuan month on month; The gross profit per ton of cold rolled sheet was 359 yuan, down 97 yuan month on month; The gross profit per ton of medium and heavy plate was 438 yuan, down 141 yuan month on month.
Risk tip: terminal demand has fallen sharply, and the environmental protection production restriction policy is less than expected.
