Key investment points:
In March, the crude steel output was 88.3 million tons, a year-on-year increase of - 6.4%; The output of pig iron was 71.6 million tons, a year-on-year increase of - 6.2%. In March, the steel output was 116.89 million tons, a year-on-year increase of - 3.2%; The apparent consumption of steel was 113442 million tons, a year-on-year increase of -0.63%. In March, China exported 4.945 million tons of steel, a year-on-year increase of - 34.42%; The import was 1011000 tons, a year-on-year increase of - 23.41%. The net export was 3.934 million tons, a year-on-year increase of - 36.75%.
The industry continued to be weak in both supply and demand. In April, steel consumption decreased and gross profit per ton of steel decreased. As of April 15, the utilization rate of blast furnace capacity of Chinese steel mills was 86.42%, 1.5 percentage points lower than that in the same period last year. The capacity utilization rate of 85 independent EAF steel plants was 63.7%, 19.6 percentage points lower than that in the same period last year. The apparent consumption of the five varieties has continued a negative growth trend since mid March. As of April 15, the apparent consumption of the week decreased by 16.7% year-on-year. As of April 15, the average gross profit per ton of rebar, hot rolled sector and cold rolled sector in April was 320 yuan / ton, 430 yuan / ton and 420 yuan / ton respectively; Compared with March, it decreased by 233 yuan / ton, 280 yuan / ton and 296 yuan / ton.
In March, the infrastructure growth in the downstream of the steel industry chain continued to pick up, but the overall demand was weak, and the recovery of real estate investment was still expected. In March, the growth of infrastructure in the downstream industries of the iron and steel industry chain picked up, the growth of automobiles turned from increase to decrease, and the decline of real estate and construction machinery expanded; Due to the local spread of the epidemic, China's real estate sales and some downstream manufacturing production have been affected to some extent, and the demand side is weak as a whole. On the cost side, the increase of iron ore price and coke price is greater than that of steel. At present, nearly 60 cities in China have issued real estate related policies to encourage housing consumption demand. It is expected that the subsequent sources of real estate funds will be marginally improved.
Last week, iron ore inventories decreased, thread consumption increased and sector consumption decreased. Last week, the apparent consumption of rebar increased by 245100 tons month on month. The apparent consumption of hot rolled sector decreased by 71800 tons month on month; The apparent consumption of cold rolled sheet decreased by 2400 tons month on month; The total of the five varieties in the community warehouse + factory warehouse was 26.894 million tons, with a month on month decrease of 1.542 million tons. The amount of iron ore arriving at the port decreased by 377000 tons month on month; Aoba iron ore shipments increased by 341000 tons month on month; The average daily port dredging volume decreased by 11400 tons month on month; Last week, the port inventory of imported iron ore was 148725 million tons, a decrease of 3.5335 million tons month on month. Last week, the average daily output of the independent coking plant was 549000 tons, a month on month decrease of 20600 tons; The total coke inventory in China was 10.516 million tons, a month on month decrease of 116900 tons.
Investment suggestion: at present, the overall supply and demand of the steel market is still weak, but the prosperity of the demand (Infrastructure) of some downstream industries has improved marginally; The price of raw materials is strong, the cost pressure increases, the industry enters a new cycle (carbon control + ultra-low emission + merger and reorganization + not encouraging export), the competition pattern is improved, and the ability of supply adjustment is enhanced. It is suggested to allocate two types of Companies: pay attention to the improvement of the investment margin of downstream infrastructure, resulting in the recovery of demand for pipes and building materials, and relevant beneficiary companies. Considering the current low valuation of the steel sector, it is recommended to pay attention to listed companies with high long-term dividend level.
Risk tip: under the internal circulation development pattern, the growth of domestic demand for steel is lower than expected; The issuance of local special bonds lagged behind, and the growth of infrastructure investment was lower than expected
