Investment suggestion: continue to be optimistic about steel stocks in the medium term. Against the backdrop of historically high profits and historically low valuations, the industry’s supply ceiling is brought about by output leveling control, and the steady growth supports the recovery of demand. Therefore, we are optimistic about the investment opportunities of cyclical stocks, and the steel sector will also have a good performance. Optimistic about four types of stocks: Inner Mongolia Eerduosi Resources Co.Ltd(600295) , with alpha, and strong performance stocks Hunan Valin Steel Co.Ltd(000932) , Xinyu Iron & Steel Co.Ltd(600782) ; High dividend Fangda Special Steel Technology Co.Ltd(600507) , Baoshan Iron & Steel Co.Ltd(600019) , pay attention to Bengang Steel Plates Co.Ltd(000761) ; High elasticity target Maanshan Iron & Steel Company Limited(600808) , it is suggested to pay attention to Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) , etc.
Industry view: steady growth continues to heat up. The high-frequency transaction data tracked last week continued to decline month on month, indicating that the impact of the epidemic is still large, which also means that the backlog of demand is greater; At the same time, the steady growth policy and expectation continue to heat up. We expect that once the follow-up epidemic eases, the demand is expected to erupt intensively: first, the traditional peak demand season, second, the centralized release of backlog demand, and third, the overseas demand continues to improve (the price difference of steel outside China continued to widen last week). Although the performance growth rate of the steel sector is average, the characteristics of undervalued value and high dividend still have great attraction; On the premise of steady growth, the industry also has upward beta, so it is expected to achieve good performance. Some sub industries with alpha logic have greater opportunities, such as ferrosilicon. Recommend Inner Mongolia Eerduosi Resources Co.Ltd(600295) , Hunan Valin Steel Co.Ltd(000932) , Xinyu Iron & Steel Co.Ltd(600782) , Fangda Special Steel Technology Co.Ltd(600507) , Inner Mongolia Baotou Steel Union Co.Ltd(600010) , etc; It is recommended to pay attention to Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) .
Market review: last week (April 10-april 15), Shenwan steel fell 0.9%, leading the Shanghai Composite Index by 0.4%. The top gainers were Hbis Resources Co.Ltd(000923) (9.4%), Gansu Jiu Steel Group Hongxing Iron And Steel Co.Ltd(600307) (9.0%), Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) (8.6%). Last week, the prices of main contracts of screw thread, hot coil, iron ore and coke futures changed by – 0.4%, – 2.1%, – 2.7% and 3.9% respectively compared with the previous week (March 3-April 8); The profits of deformed steel bar and hot-rolled panel changed by – 1.6% and – 11.0% respectively from the previous week.
Industry trends:
General steel: last week, the social inventory of steel was 16.49 million tons, a month on month decrease of 2.4%; Among them, the long timber inventory was 11.59 million tons, a month on month decrease of 3.6%; Plate inventory was 4.9 million tons, an increase of 0.4% month on month. In early April, the average inventory of steel mills was 16.62 million tons, a month on month decrease of 2.9%. Last week, the shipment volume of 237 steel traders nationwide was 171000 tons, an increase of 9.3% month on month; Last week, the cargo volume of terminal line snails in Shanghai was 10000 tons, a month on month decrease of 100%. The cost lag gross profit of thread, hot rolling, cold rolling and medium and heavy sector tracked are 738, 803, 555 and 751 yuan / ton respectively.
Iron ore: last week, the shipment volume of iron ore from Australia, Pakistan and India was 22.84 million tons, an increase of 2.5% month on month; The arrival volume of 6 ports in the North was 8.672 million tons, a month on month decrease of 4.2%. Last week, the iron ore port inventory was 14873 tons, down 2.3% month on month. Last week, the average daily dredging volume of imported ore in the port was 3.036 million tons, a month on month decrease of 0.4%.
Coking coal and coke: the coke inventory of coke enterprises increased last week. With the gradual resumption of production of underground tourism such as Tangshan, the demand for Coke will be favorable in the later stage. In terms of coking coal, poor logistics and transportation, tight supply and rising coking coal prices have hindered the transportation of some coal mines under the epidemic situation.
Ferroalloy: last week, the silicon manganese market maintained a weak operation and was relatively stable as a whole. Recently, the bidding of steel mills has been carried out almost, and the downstream demand is less. Ferrosilicon market is relatively strong.
Special steel: last week, the market price of excellent special steel in China fell slightly. In terms of price adjustment of steel mills, the price of steel mills was mainly increased. In terms of market, at present, many markets in China are still restricted by transportation difficulties, and the transaction is not ideal, but supported by the cost of steel mills, the short-term price support is strong. To sum up, it is expected that the national excellent and special steel market price will fluctuate in a narrow range next week.
Stainless steel: affected by the drop in sea freight last week, the cost of imported nickel ore was reduced, and the market quotation was mostly reduced. Under the dual pressure of China’s epidemic and environmental protection, downstream factories are not very willing to purchase nickel ore. most factories are mainly on the sidelines, with few transactions in the week. The overall sentiment of nickel ore market is weak.
Risk tip: real estate decline; The recovery of manufacturing industry was less than expected.
