Investment suggestion: continue to be optimistic about the steel sector in the medium term. Under the background of historically high profits and historically low valuations, the reduction of crude steel production combined with steady growth will usher in investment opportunities driven by fundamentals. Pugang is optimistic about four types of stocks: alpha ( Inner Mongolia Eerduosi Resources Co.Ltd(600295) ), underpricing performance ( 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) ), high elasticity ( Maanshan Iron & Steel Company Limited(600808) , focus on Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) ); Special steel is optimistic about the core assets of new materials Citic Pacific Special Steel Group Co.Ltd(000708) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) .
Industry perspective: focus on the recovery of demand after the epidemic. As the epidemic situation in all parts of the country, especially in Shanghai, is alleviated and the unsealing of all parts of the country is just around the corner, the explosive growth in demand caused by the superposition of the three factors analyzed in the early stage is expected to be gradually realized: the switching between light and peak seasons, the postponement of construction at the beginning of the year, and the high level of export. In the past two weeks, the high-frequency data of steel inventory and transaction have shown signs of improvement, and it is expected to accelerate in the follow-up. China’s foreign price difference is still hot and remains high, supporting export demand. The industry gross profit continues to narrow due to the impact of cost, but it belongs to the past formula, and the subsequent probability will improve with the demand. According to Q1 performance, the annual PE of mainstream steel stocks such as Valin, Xingang and Angang is only 4-7 times, which is at a historical low valuation, and the investment value appears under the background of upward boom. In addition, continue to recommend the upstream resource ferrosilicon faucet Inner Mongolia Eerduosi Resources Co.Ltd(600295) , pipeline faucet Xinxing Ductile Iron Pipes Co.Ltd(000778) , and pay attention to Xinjiang infrastructure concept stock Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) .
Market review: this week (April 24 – April 29, the same below), Shenwan iron and steel fell 11.7%, 6.9% behind the Shanghai composite ring. The top gainers were Yongxing Special Materials Technology Co.Ltd(002756) (11.7%), Xinxing Ductile Iron Pipes Co.Ltd(000778) (10.6%), Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) (9.2%). The quotation of main contracts of screw thread, hot coil, iron ore and coke futures this week changed by – 2.9%, – 5.2%, – 5.2% and – 8.8% respectively compared with last week (April 17-april 22); The profits of deformed steel bar and hot-rolled panel changed by – 11.9% and – 31.4% respectively last week. Industry trends:
Ordinary steel: the social inventory of steel this week was 15.73 million tons, a month on month decrease of 2.8%; Among them, the long timber inventory was 10.95 million tons, with a month on month decrease of 3.3%; Plate inventory was 4.78 million tons, a month on month decrease of 1.8%. In mid April, the average inventory of steel mills was 19.67 million tons, an increase of 18.3% month on month. This week, the shipment volume of 237 steel traders nationwide was 204000 tons, an increase of 39.1% month on month; This week, the cargo volume of Shanghai terminal line screw was 10000 tons, unchanged month on month. The cost lag gross profit of thread, hot rolling, cold rolling and medium and heavy sector tracked are 542, 495, 335 and 557 yuan / ton respectively.
Iron ore: this week, the shipment volume of iron ore from Australia, Pakistan and India was 23.01 million tons, with a month on month decrease of 2.3%; The arrival volume of 6 ports in the North was 10.853 million tons, a month on month decrease of 8.3%. This week, the iron ore port inventory was 14518 tons, down 1.4% month on month. This week, the average daily dredging volume of Port imported ore was 2.9777 million tons, a month on month decrease of 3.4%.
Coking coal and coke: this week, the disk of silicon manganese futures fell under the influence of the black system, and the price was at a low level. In the short term, the market was running at a low level, and the coking coal market was stable and weak.
Ferroalloy: this week, the silicon manganese market will still maintain the trend of low price and reluctant sale in the short term, operate smoothly and fluctuate slightly. The short-term ferrosilicon market is mainly weak and stable.
Special steel: the market price of national excellent special steel fell slightly this week. In terms of price adjustment of steel mills, steel mills mainly reduced the price. In terms of the market, affected by the fluctuation of futures price and the obstruction of logistics in many markets across the country, the transaction was poor, the release of terminal demand was slow, and the inventory was under pressure. However, due to the cost support of steel mills and the arrival of goods limited by logistics, the short-term price support was strong. To sum up, it is expected that the high price shock operation of the national excellent and special steel market next week will be dominated.
Stainless steel: the bargaining enthusiasm of nickel ore market has dropped this week, the trading atmosphere of chromium ore market is positive, and the spot price of stainless steel fluctuates in a narrow range.
Risk tip: real estate fell, and the recovery of manufacturing industry was less than expected.
