Key investment points
Iron and steel: 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) .
Coal: the industry fundamentals have stabilized, and actively pay attention to the layout of new energy by coal enterprises. In terms of thermal coal: Indonesia’s export restrictions boosted, and pit mouth prices began to rebound. This week, the price of 5500 kcal thermal coal produced in QinGang Shanxi was 830 yuan / ton, up 30 yuan / ton week on week, stopping the decline and recovering. In terms of supply, many coal mines stopped production and completed maintenance at the end of the year, resumed production, and the supply was stable; The impact of Indonesia’s export restrictions appeared, the prices of some coal mines began to rebound, and the queues of coal trucks in coal mines increased. In terms of demand, although the supply guarantee policy led to sufficient coal storage in the power plant, the export restriction event in Indonesia led to market sentiment. Traders and platform shipping could make profits, and their purchasing enthusiasm improved in the weak. Some enterprises began to replenish their stocks in stages before the Spring Festival. On the whole, Indonesia’s export restrictions have boosted the power coal market in the short term. In the follow-up, we will pay attention to the demand in the peak season and Indonesia’s arrangements. In terms of coking coal, supply and demand support the strong operation of the market, driving the price rise. The price of mainstream coking coal rose this week, and the price of Shanxi main coking coal depot in Jingtang Port increased by 2600 yuan / ton (including tax). In terms of supply, some coal mines have completed maintenance and resumed production after new year’s day, but the supply side is still tight due to the impact of safety and environmental protection; In terms of import, the epidemic situation in Mongolia rebounded, and the customs clearance at Ganqi Maodu port was still low. The customs clearance lasted four days this week, with an average of 87 vehicles per day (the same month on month). The tradable resources at the port were limited, the coal price rose slightly, and the Mongolian coal market operated stably, moderately and strongly. In terms of demand, the blast furnace has been intensively restored to production, the market has improved, the production willingness of coke enterprises has increased, and this year’s coal mine holiday has been ahead of schedule, and coke enterprises have actively supplemented the warehouse to support the good operation of coal prices. Overall, China’s coking coal market is improving, the supply is still tight, the procurement is active, and the coal price is stable at a high level. Follow up attention will be paid to the production restriction of the Winter Olympic Games and the change of replenishment demand. In terms of coke, the supply continued to tighten and the demand for replenishment increased. In terms of coke, the supply of coke enterprises is under pressure, and the resumption of production of steel mills just needs to be increased. As of January 7, the price of secondary metallurgical coke in Tangshan was 2860 yuan / ton, up 300 yuan / ton on a weekly basis, and the national average profit per ton of coke was about 203 yuan / ton. In terms of supply, the first round of coke price increase was fully implemented, and the increase of coke price led to the improvement of coking profit. However, affected by the environmental protection production restriction policy, the operating load of coke enterprises fluctuated, the willingness to increase production was not strong, and the supply side was tightened as a whole. In terms of demand, the downstream steel mills have gradually resumed production, the start-up has picked up, and the inventory level of some steel mills is low, and the coke just needs to pick up. On the whole, the coke supply is tight, and the start-up of the steel plant just needs to be increased, which supports the increase of coke price. In the follow-up, we will pay attention to the resumption of work and production of the steel plant and the production restriction of the Winter Olympic Games. Investment strategy: the coal price rose slightly this week, the Indonesian export ban has a certain boost, and the enthusiasm for downstream procurement has improved. At present, many coal mines have completed the maintenance at the end of the year and began to return to work and production. However, the rectification activities in some areas are still continuing, superimposed with the environmental protection and production restriction policy and the approaching winter Olympic Games, and the overall supply side is tight. It is reported that as many as 25 coal enterprises in East Kalimantan Province, the main production area of Indonesia, were allowed to continue exporting coal in early January. The sustainability of the impact of the Indonesian incident on coal prices still needs to pay attention to the follow-up measures of the Indonesian government. In the medium and long term, under the background of lack of planned investment, the constraints on the coal supply side are strong. Under the background of small annual growth in demand, coal will be a scarce resource in the next few years, and the stock capacity or high profits. The increase of the benchmark price of the annual long-term association also ensures the ability of the industry to maintain high profitability. Under the dual carbon goal, coal enterprises urgently need to transform, invest in energy Yankuang, Shenhua, Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) , Shanxi Meijin Energy Co.Ltd(000723) and others mainly focus on new energy operation and hydrogen energy. The coal industry has the advantages of strong cash flow and rich land resources in new energy operation, and has the ability and willingness. The transformation of new energy direction is conducive to improving the overall sector valuation level (at present, the PE valuation is 5-6 times), and the coal assets need to be repriced, Continue to be optimistic about the investment value of the sector. Thermal coal stocks are recommended to pay attention to: Shaanxi Coal Industry Company Limited(601225) , Yanzhou Coal Mining Company Limited(600188) , China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , power investment and energy, Beijing Haohua Energy Resource Co.Ltd(601101) . Metallurgical coal stocks are suggested to pay attention to: Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Jizhong Energy Resources Co.Ltd(000937) , Shanxi Coking Co.Ltd(600740) . Anthracite recommended attention: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . Coke stocks are recommended to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015) .
Nonferrous Metals: the sales volume of electric vehicles in Europe reached a new high in December; Determination of China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) and Inner Mongolia Baotou Steel Union Co.Ltd(600010) concentrate pricing; The spot price of lithium carbonate exceeded 300000 yuan / ton; The price of praseodymium and neodymium oxide exceeds 900000 yuan / ton; Lithium and rare earth prices deviated further from stock prices. The demand boom continued to rise and the price transmission was smooth. In December, the sales volume of six European countries (Britain, France, Germany, Norway, Sweden and Italy) totaled 203100 vehicles, with a year-on-year increase of 12% and a month on month increase of 32%, reaching a record high; In December, the output of cathode materials continued to increase. The output of ternary materials in China was 40200 tons, an increase of 7.39% month on month; The output of lithium iron phosphate was 56000 tons, an increase of 11.8% month on month. The end of the year is approaching, and the price of lithium carbonate has accelerated upward again. This week, the price of battery grade lithium carbonate has increased by 10.3% compared with last week, the price of battery grade lithium hydroxide has increased by 10.1% compared with last week, and the price of lithium carbonate futures in Wuxi electronic disk has reached 390000 yuan / ton; With the tightening of raw materials, the price of cobalt may rise further. The quotation of MB cobalt (standard grade) and MB cobalt (alloy grade) increased by 0.7% and 0.7% month on month respectively. The tax inclusive price of metal cobalt in China has reached 540000 yuan / ton; China’s metal cobalt, cobalt sulfate and cobalt trioxide increased by 2.8%, 1.0% and 2.9% respectively; The pattern of rare earth permanent magnet industry was reshaped. In the spot market, the quotation of praseodymium and neodymium oxide in China increased by 6.4% to 900000 yuan / ton compared with last week; In terms of medium and heavy rare earths, the quotation of dysprosium oxide and terbium oxide increased by 0.3% and 0.9% compared with last week. The spot circulation in the market is limited, and large manufacturers are willing to support the price. The supply of nickel raw materials was tight and the price remained strong. SHFE nickel closed at 151100 yuan / ton, down 0.34% month on month; On the supply side, in December 2021, the output of ferronickel from China and Indonesia was 108000 metal tons, an increase of 0.15% month on month; On the demand side, recently, stainless steel plants have successively released plans to reduce production during the Spring Festival in 2022. The production of 300 series stainless steel in January and February 2022 will be reduced by 180000 tons and 100000 tons compared with the normal production.
Base metals, Indonesia’s coal export ban exacerbated the market’s concern about energy supply shortage. After the hawkish signal was released in the minutes of the Federal Reserve meeting, the US dollar index rose slightly and the focus of copper price moved down slightly; In addition, the news of Indonesia’s coal export ban fermented during the new year’s Day holiday, which once again exacerbated the market’s concerns about the shortage of energy supply and supported the rise of base metal prices. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by – 0.8%, 3.9%, 0.2%, 0.1%, 2.6% and 0.3% respectively this week, and the price rose as a whole.
Building materials: this week’s view: this week, we released the 2022 investment strategy report “traditional building materials turn around and new materials take advantage of the trend”. We believe that infrastructure investment is expected to exceed expectations under steady growth, and pay attention to infrastructure chain in the short term; Investment opportunities for brand building materials and new materials were promising throughout the year. The margin of real estate policy is getting better, the real estate chain is expected to be repaired, and the price rise is gradually falling / the price of raw materials is falling, the brand building materials are gradually entering the layout time point, and the leading certainty is high. The prosperity of carbon fiber / quartz sand / glass fiber continues and continues to be recommended. The glass sector focuses on the expansion of new categories such as photovoltaic, electronics and pharmaceutical glass. The expected marginal improvement of real estate + the acceleration of special bond issuance is expected to support the cement demand. At present, the valuation of the cement sector is cost-effective, and the leader of volume increase logic is preferred. The cost side of the water reducing agent sector is declining rapidly, and the leader with new category expansion logic is preferred. 1) For the carbon fiber industry, we believe that the investment logic of the civil carbon fiber industry lies not only in the high growth of demand (wind, light, hydrogen, etc.), but also in the “favorable climate, favorable location and harmonious people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence. Under the barriers of high technology, technology and capital, those who get the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the penetration rate of the industry increases or depends on changing “price” for “demand”. We suggest paying attention to the carbon fiber leader Zhongfu Shenying (to be listed), Weihai Guangwei Composites Co.Ltd(300699) , precursor leader Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Sinofibers Technology Co.Ltd(300777) , and Hengshen shares; Carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; Downstream composite manufacturers Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new materials, etc. 2) For consumer building materials, on the one hand, the end of the real estate policy has been realized, the financing end of the real estate industry has improved significantly, and the pessimistic expectation of the real estate chain is expected to continue to repair. On the other hand, with the gradual implementation of price increases and the decline of raw material prices, we judge that the profitability of consumer building materials is expected to gradually improve, and the industry will gradually enter the layout time point. Consumer building materials leaders have advantages in brand / Channel / cost / capital. They have the ability to cross the cycle in terms of competitiveness and growth, focusing on leading enterprises Beijing New Building Materials Public Limited Company(000786) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Skshu Paint Co.Ltd(603737) , Monalisa Group Co.Ltd(002918) , Keshun Waterproof Technologies Co.Ltd(300737) , Guangdong Dongpeng Holdings Co.Ltd(003012) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Yonggao Co.Ltd(002641) , Wangli Security & Surveillance Product Co.Ltd(605268) . 3) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, the supply side is newly added or limited, and the price of quartz sand is expected to rise steadily; The demand for semiconductors and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share, and Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) are mainly recommended. 4) For the glass fiber industry, the price is running smoothly this week. We expect that the new production capacity of roving is limited and the demand continues to improve. Under the low inventory, the high outlook of roving is expected to continue. We expect that the new production capacity of electronic yarn will be about 100000 tons in 22 years, and there will still be new production at the supply end. It does not rule out that the subsequent price of electronic yarn will still be loose, but it is expected that the overall production capacity will remain at a good level in 22 years. Focus on China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) , Jiangsu Changhai Composite Materials Co.Ltd(300196) , Shandong Fiberglass Group Co.Ltd(605006) . 5) For the glass industry, we judge that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the current high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, according to the data of China State Construction Engineering Corporation Limited(601668) and Industrial Glass Association, in the production line, the production capacity with kiln age of 8-10 years / more accounts for 14.1% / 14.5% respectively, and the cold repair of the old production line may lead to supply contraction. At present, the price and cost of glass are close. Under the high cost of raw materials / energy, manufacturers are willing to support the price, and the glass price is expected to maintain a good level. Focus on the medium and long-term growth brought by various types of glass (photovoltaic, electronic, pharmaceutical glass, etc.); Focus on Zhuzhou Kibing Group Co.Ltd(601636) . It is recommended to pay attention to CSG a, Xinyi Glass, Luoyang Glass Company Limited(600876) , Triumph Science & Technology Co.Ltd(600552) , etc. 6) For the cement industry, the quota of new special bonds will be issued in advance in 2022, the infrastructure is expected to gradually develop, the marginal relaxation of the real estate financing end may lead to the expected improvement of the market, and the cement demand is expected to be supported; In addition, the role of policy regulation of coal price has been fully demonstrated. When the cement price center is expected to remain high, the cost pressure of enterprises is expected to ease month on month. We continue to be optimistic about the valuation and repair opportunities of the cement sector, focusing on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Guangdong Tapai Group Co.Ltd(002233) , Xinjiang Tianshan Cement Co.Ltd(000877) , and it is suggested to focus on Gansu Shangfeng Cement Co.Ltd(000672) , Jiangxi Wannianqing Cement Co.Ltd(000789) and China building materials. 7) For the water reducing agent industry, the price of raw material ethylene oxide has dropped by about 25% from a higher point, and there is still a possibility of decline; By the end of September, the centralized price increase of major manufacturers is expected to be gradually implemented, and the industry profit is expected to improve. Leading companies have obvious competitive advantages, and new products benefit from the improvement of downstream demand, which is expected to maintain high growth. It is mainly recommended Sobute New Materials Co.Ltd(603916) . 8) It is suggested to pay attention to Zhejiang Walrus New Material Co.Ltd(003011) : the company is the leader in the production and export of PVC flooring, and the growth elasticity of production capacity will be highlighted in the future. Although in the early stage, due to the rise of raw material prices, exchange rate and shipping pressure, the profit is under pressure, but at present, the export chain benefits from a high outlook and the sea freight decreases, the enterprise gradually adjusts the price, the cost side also drops, and the profit is expected to be gradually repaired.
Chemical industry: the traditional bulk is still looking for the bottom, and the leading value crosses the cycle. Affected by the economic cycle and the global spread of the epidemic, traditional bulk products in the chemical industry are in a downward trend. As the main body of the chemical industry, the PPI of chemical raw materials and chemical products manufacturing industry in November 2021 increased by 29.6% year-on-year, which was positive for 11 consecutive months. In terms of downstream demand, from January to November 2021, the newly started area of houses decreased by 9.1% year-on-year, increased by 16.6% month on month in November, the construction area increased by 6.3% year-on-year from January to November, decreased by 13.5% month on month in November, and the completed area increased by 16.2% year-on-year from January to November; From January to November, China’s automobile production increased by 5.3% year-on-year and 11.28% month on month in November; From January to November, the retail sales of clothing, shoes, hats, knitwear and textiles increased by 16.4% year-on-year, with strong demand. On the supply side, the fixed asset investment in the chemical industry continued to grow. From January to November, the fixed asset investment in chemical raw materials and chemical products manufacturing industry increased by 16.6% year-on-year. It is suggested to pay attention to the leading enterprises with excellent quality and core competitiveness: in the downward period of the cycle, the leading enterprises expand their advantages, and the valuation is obviously low, or cross the cycle, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Zhejiang Nhu Company Ltd(002001) , Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) , Hengli Petrochemical Co.Ltd(600346) . It is suggested to pay attention to the leading enterprises with excellent quality and core competitiveness: in the downward period of the cycle, the leading enterprises expand their advantages, and the valuation is obviously low, or cross the cycle, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Zhejiang Nhu Company Ltd(002001) , Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) , Hengli Petrochemical Co.Ltd(600346) . With the improvement of health awareness, sugar substitutes have become the general trend of the times. It is suggested to pay attention to the leading food additives Anhui Jinhe Industrial Co.Ltd(002597) in the business cycle. New materials: actively embrace industrial innovation and supply chain reconstruction. Scientific and technological progress promotes the innovation of terminal demand and drives the upgrading and development of high-end manufacturing industry. In this process, industrial innovation will put forward higher requirements for material properties and promote the rapid development of new material industry. It is recommended to pay attention to production
