Main points:
This week, the Shanghai Composite Index fell by 3.87% and the Shanghai and Shenzhen 300 index fell by 4.19%. Steel sector fell by 9.05%; Among the sub sectors, the general steel sector decreased by 9.52%, and the special material sector decreased by 7.06%.
Steel market: the national development and Reform Commission has made it clear to continue to press the production of crude steel, and the improvement of supply and demand is expected to drive the profit recovery of steel mills
The national development and Reform Commission made it clear at the press conference on April 19 that it would continue to reduce the output of crude steel. In 2021, the national crude steel output was 1.033 billion tons, a year-on-year decrease of 3% and a year-on-year decrease of 30 million tons. The national development and Reform Commission continued to promote the reduction of production and implemented the market expectations, which will significantly promote the alleviation of the subsequent raw material cost pressure and the recovery of the profitability of steel enterprises. On the demand side, the reduction of production and poor logistics caused by the epidemic in East China from March to April have a certain impact on the traditional "gold, three and four silver". However, from the perspective of the whole year, the main tone of the demand side is still driven by the steady growth of infrastructure construction on steel consumption. With the improvement of the epidemic and the resumption of work in Shanghai, the demand side pattern has gradually improved.
Steel prices fell slightly this week. Spot prices of rebar and cold rolling rose by 0.20% and 0.71% respectively, while spot prices of hot rolling and medium sector fell by 1.54% and 0.57% respectively. See the breakdown categories specifically: in terms of hot-rolled coil, the production end, trade end and manufacturing end are affected by the epidemic, the market price decreases in different regions, the output and steel mill inventory increase, the consumption is poor or drives the inventory to further increase, maintaining the weak pattern of supply and demand, and the market price is expected to maintain the range fluctuation; In terms of scrap steel, the cost of steel mills is increased, the profit is narrowed, the scrap steel inventory is at a low level in recent years, the arrival volume is generally adjusted according to demand, the scrap steel market rises and falls, and the approaching may day will support the scrap steel price; In terms of double coke, logistics dredging releases downstream demand, supply shortage leads to continuous high prices, strong short-term market operation and fast pace of replenishment; The epidemic affected the logistics, transportation and shipment efficiency of Shanxi coke enterprises, resulting in an increase in inventory, a better demand for coke in other regions, a decline in inventory and a strong short-term operation.
In terms of special steel, under the guidance of high-quality development policy, subdivision tracks such as pipeline and steel structure deserve attention. From the perspective of new infrastructure construction, China's pipeline has entered the upgrading stage, the construction of rural water supply and drainage system is rough, and the construction of urban sponge pipe network is also close at hand. It is suggested to pay attention to 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) , etc. As the core metal material in the field of new energy vehicles, electrical steel is also a sector worthy of attention. The rapid development of new energy vehicles has driven the downstream demand for electrical steel. At present, the valuation of the sector is generally not high, and it is optimistic about the electrical steel sector for a long time. It is suggested to pay attention to Baoshan Iron & Steel Co.Ltd(600019) , Maanshan Iron & Steel Company Limited(600808) , Beijing Shougang Co.Ltd(000959) , etc.
The price of rebar in the spot market this week was 509000 yuan / ton, with a weekly increase of 0.20%; The price of hot rolled coil is 513000 yuan / ton, with a weekly decrease of 1.54%; The price of cold rolled coil is 570000 yuan / ton, with a weekly increase of 0.71%; The price of medium sector was 522000 yuan / ton, with a weekly decrease of 0.57%. In the futures market, the active contract price of rebar was 496400 yuan / ton, with a weekly decrease of 1.68%; The active contract price of hot rolled coil was 507400 yuan / ton, with a weekly decrease of 2.39%; The active contract price of wire rod was 549700 yuan / ton, with a weekly decrease of 0.99%. The myspic composite steel price index was 189.65 points, with a weekly decline of 0.03%, of which the myspic long material index rose by 0.32% and the myspic flat sector index fell by 0.45%.
Raw material Market: the epidemic restricts the release of production capacity, and the resumption of work and production is conducive to the improvement of demand
As of Friday, the price of Australian Pb powder in the spot market was 985.00 yuan / ton, with a weekly decline of 2.28%; The price of primary metallurgical coke was 411000 yuan / ton, with a weekly increase of 5.12%; The price of main coking coal was 330000 yuan / ton, unchanged from last week. In the futures market, the active contract price of iron ore was 881.00 yuan / ton, with a weekly decline of 3.77%; The active contract price of coke was 383000 yuan / ton, with a weekly decrease of 4.20%; The active price of coking coal was Dingli Corp.Ltd(300050) yuan / ton, with a weekly decline of 4.81%. The cross regional circulation improved this week, the raw material market was shaken and consolidated, and the operation was stable but strong. The price of iron ore fluctuated slightly, the price of coke rose steadily, and the price of coke rose steadily. Under the policy of ensuring supply and stabilizing price and reducing output, the profit of steel mills narrowed, the transportation and delivery of raw materials were blocked, and the release of production capacity was limited; The resumption of work and production is conducive to the rapid release of expectations of the suppressed demand in the early stage, and the project process is gradually improved.
Steel supply and demand: the cost of steel mills has increased and the profit has narrowed, so there is an urgent need to meet the release expectations
In terms of steel mill inventory this week, cold rolling, hot rolling and medium and heavy sector increased by 1.81%, 5.88% and 0.38% respectively, while wire rod and rebar decreased by 2.27% and 1.49% respectively. In terms of steel output this week, the output of cold rolling, hot rolling and medium and heavy sector increased by 0.13%, 0.25% and 4.21% respectively, and the output of wire rod and thread decreased by 0.57% and 0.09% respectively. Steady growth and monetary policy support the real economy, but the repeated epidemic has put pressure on the manufacturing industry in the short term. China's steel market is expected to be strong, but the actual downstream demand is weak, the cost of steel mills increases and the profit narrows. If the release is less than expected, it will fall into market adjustment again.
Investment advice
With the recovery of manufacturing demand superimposed on the background of carbon peak and carbon neutralization, the profit logic of the steel industry has been reconstructed, and steel enterprises have further benefited from the cyclical rotation. We are still optimistic about the steel sector for a long time. The national defense, military industry and aerospace industry have a broad space for domestic substitution, and products such as superalloy, special stainless steel and ultra-high strength steel occupy an absolute dominant position. It is suggested to focus on the special steel leader with high performance in the industry: Fushun Special Steel Co.Ltd(600399) ; Traditional field leaders + popular emerging business targets are more favored by the market. It is suggested to focus on stainless steel rods and wires and mica lithium extraction leaders: Yongxing Special Materials Technology Co.Ltd(002756) ; And the high growth leader in the field of cold-rolled stainless steel: Zhejiang Yongjin Metal Technology Co.Ltd(603995) .
Risk tips
Covid-19 epidemic situation is repeated; The economic downturn accelerated; The price of raw materials fluctuates greatly; The demand for real estate steel fell sharply; Steel destocking process is blocked.
