This week’s view
Steel industry: the epidemic affects the rhythm, and the total amount is still predictable
Steel prices fluctuated. As of April 15, thread, hot coil, medium and heavy sector, cold rolling and wire rod reported 5131 yuan / ton, 5241 yuan / ton, 5276 yuan / ton, 5650 yuan / ton and 5475 yuan / ton respectively this week, with a slight decrease of 0.13%, 0.49%, 0.46%, 0.34% and 0.1% respectively.
This week, social inventory fell to 164933 million tons, down 407200 tons. The inventory of major steel mills increased to 6.8514 million tons, an increase of 337700 tons.
The gross profit per ton of steel has narrowed. The gross profit per ton of steel for thread, hot coil, medium and heavy sector, cold rolling and wire rod was 193 yuan, 213 yuan, 6 yuan, 99 yuan and 412 yuan respectively, down 114 yuan, 115 yuan, 102 yuan, 105 yuan and 105 yuan compared with last week.
The epidemic affects the downstream demand and has a significant impact on the overall raw material logistics. In the short term, the impact is expected to affect the future for some time. However, in the medium and long term, the direction of China’s economic work this year is clear. At present, there are frequent stable expectation signals, and the superposition of RRR reduction releases liquidity. In the later stage, with the elimination or weakening of the impact of the epidemic, the downstream demand for steel is expected to increase rapidly.
As the main focus of stabilizing the economy, in the field of infrastructure construction, water conservancy and municipal pipe network have been clearly reflected at the policy level. It is expected that with the end of the two sessions and the centralized bid opening and construction in various places, the pipeline demand is expected to be released in large quantities. Therefore, we believe that under the background of “stabilizing the economy”, the pipeline industry is expected to accelerate the release of demand again with certainty. It is strongly recommended to pay attention to the relevant targets of the pipeline industry under the stable economy.
For high-grade non oriented silicon steel, the government work report said that it would continue to support the consumption of new energy vehicles, and the demand for non oriented silicon steel for new energy vehicles is expected to continue to maintain high growth. The supply side release is limited, and the profit of high-end silicon steel is expected to continue to break out this year. Attach importance to enterprises with high grade non oriented silicon steel production capacity. In addition, the motor energy efficiency upgrading plan (20212023) is released. The improvement of motor energy efficiency standards will bring a lot of demand for high-grade non oriented silicon steel. It is suggested to pay attention to the main targets of electrical steel: Beijing Shougang Co.Ltd(000959) , Baoshan Iron & Steel Co.Ltd(600019) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Xinyu Iron & Steel Co.Ltd(600782) , Maanshan Iron & Steel Company Limited(600808) .
Focus on the subject
Industrial sector companies: Xinyu Iron & Steel Co.Ltd(600782) , Beijing Shougang Co.Ltd(000959) , Hunan Valin Steel Co.Ltd(000932) , Nanjing Iron & Steel Co.Ltd(600282) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Maanshan Iron & Steel Company Limited(600808) , Baoshan Iron & Steel Co.Ltd(600019) 9 , Angang Steel Company Limited(000898) .
Key special steel companies: Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Citic Pacific Special Steel Group Co.Ltd(000708) , Fushun Special Steel Co.Ltd(600399) , Jiangsu Toland Alloy Co.Ltd(300855) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) .
Building materials companies: Fangda Special Steel Technology Co.Ltd(600507) , Sansteel Minguang Co.Ltd.Fujian(002110) , Sgis Songshan Co.Ltd(000717) .
Municipal pipeline material company: 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) , Ningxia Qinglong Pipes Industry Group Co.Ltd(002457) .
Smart pipe network: Zhengyuan Geomatics Group Co.Ltd(688509) .
Nonferrous Metals Industry: superimposed on the repeated covid-19 epidemic and the war between Russia and Ukraine, the market is pessimistic about the downstream demand, the short-term spot price surges and falls, the supply release is limited in the medium and long term, and the price is expected to remain high and stable
In the lithium sector, spodumene was quoted at US $2940 / ton this week, up 3.52% from last week; Lithium hydroxide quoted 491000 yuan / ton, down 0.10% from last week; The quotation of battery grade lithium carbonate was 494000 yuan / ton, down 1.50%. In rare earth sector, praseodymium and neodymium oxide, dysprosium oxide and terbium oxide were quoted at 820000 yuan / ton, 2.45 million yuan / ton and 12.77 million yuan / ton this week, down 6.29%, 4.11% and 1.39% respectively. In the magnetic materials sector, the introduction of energy-saving motor policy under the guidance of double carbon, and the pull of magnetic materials under the rapid development of new energy, wind power and photovoltaic energy storage in the future, we are optimistic about the pull of rare earth permanent magnet materials under the trend of high-efficiency, energy-saving and miniaturization of motors, and the demand of new high-efficiency soft magnetic materials silicon steel and metal soft magnetic powder cores in the new energy era.
In terms of industrial metals, SHFE copper prices rose 0.82% this week to close at 73760 yuan / ton; SHFE aluminum price fell – 3.60% to close at 21825 yuan / ton. Although the current fundamentals have not been significantly improved, the positive changes at the macro level are gathering: the State Council issued a notice requiring to ensure that the main traffic lines are unblocked, and it is strictly prohibited to block or close expressways, ordinary highways, navigation channels and ship locks without authorization; The resumption of work and production in Shanghai is progressing steadily; The people’s Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on April 25, 2022. These benefits may lead to the recovery of demand in May and June.
In terms of copper, this week, the Chinese market still maintained weak supply and demand, poor logistics, and the commencement of copper processing enterprises was affected. Although the US CPI data in March slightly exceeded expectations, the core CPI was less than expected, the upward pressure on core inflation eased, and the market expected that the pace of interest rate hike would slow down, which was good for the copper price. This week, the copper inventory in the previous period decreased by 7900 tons and entered the inventory reduction again. At present, the global inventory is still at a historically low position, and the epidemic will eventually pass, and some of the missing demand will be transferred to the future. Therefore, we believe that the demand will improve significantly after the end of the epidemic in the second quarter. Although the Fed is in the interest rate hike cycle, it has little impact on the real economy in the early stage of interest rate hike. We believe that the medium-term copper price still has action power.
In terms of aluminum, the operating capacity of electrolytic aluminum in March was 40.073 million tons, an increase of 1.35 million tons compared with the end of February. The process of electrolytic aluminum supply and resumption of production has been more than half. The pick-up of goods in the Yangtze River Delta is gradually recovering this week. The shortage of raw materials and transportation constraints may be alleviated. The recovery of downstream consumption is just around the corner, and the worst time point of annual supply and demand is about to pass. The social inventory of electrolytic aluminum this week was 1063000 tons, an increase of 9000 tons over last week; At present, the average profit of China’s simulated electrolytic aluminum industry is 4023 yuan / ton, and the electricity price and anode cost rise. With the steady growth policy and the lifting of relevant restrictions, the recovery of downstream consumption is expected to be clear, and the second quarter may usher in an inflection point.
Focus on the subject
\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 92 Ganfeng Lithium Co.Ltd(002460) Tianqi Lithium Corporation(002466) China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) Shenghe Resources Holding Co.Ltd(600392) Rising Nonferrous Metals Share Co.Ltd(600259) China Minmetals Rare Earth Co.Ltd(000831) Ningbo Yunsheng Co.Ltd(600366) Earth-Panda Advanced Magnetic Material Co.Ltd(688077) Poco Holding Co.Ltd(300811) Hengdian Group Dmegc Magnetics Co.Ltd(002056) Henan Shenhuo Coal&Power Co.Ltd(000933) Yunnan Aluminium Co.Ltd(000807) Henan Mingtai Al.Industrial Co.Ltd(601677) 6 Zhejiang Founder Motor Co.Ltd(002196) 01 Founder Technology Group Co.Ltd(600601) 899 Ningbo Jintian Copper (Group) Co.Ltd(601609) Zhejiang Hailiang Co.Ltd(002203) Guangdonghectechnologyholdingco.Ltd(600673) Kbc Corporation Ltd(688598) Western Mining Co.Ltd(601168) 。
Risk tips: the risk of sharp fluctuation in the price of raw materials in the upstream, the risk of lower than expected demand in the downstream, and the risk of continuous spread of overseas epidemic.
