Coal: demand recovery, active participation. Coal price: the price of power coal rose, while the price of coking coal and coke fell. In terms of thermal coal, the port price was stable this week, and the pit price rose. On the supply side, the procurement of cement, chemical industry, metallurgy and coking in Yushen area of Shaanxi Province is active, and the areas where the epidemic situation has improved have also begun to return to work and prepare goods. Most mining areas are baochangxie, which restricts external sales. The coal source in the overall market is still tight, and the pit price has increased significantly; In terms of ports, the transfer in of Daqin Railway has decreased since the start of maintenance. Recently, the railway plan tends to be long-term cooperative. It is difficult to ship coal in the market, and the quotation is firm. However, there is a large gap between the upstream and downstream offers, resulting in less Trading volume. On the demand side, there has been more rain in South China recently, and the overall demand is still weak. Recently, the bidding for imported coal of the power plant was not smooth, and Shenhua’s external mining price also increased, which supported the price of power coal. In the follow-up, we will continue to pay attention to the resumption of production and work and the impact of the price limit policy. In terms of coking coal and coke, prices fell. On the supply side, this week, the output of some early accident coal mines in Linfen, Shanxi province gradually recovered, and the supply side of coking coal continued to increase; In terms of importing Mongolian coal, on the 4th of this week, Ganqi Maodu port cleared 298 vehicles per day, with a decrease of 44 vehicles per week, and the short-term freight and Mongolian coal prices fell; On the demand side, the procurement of intermediate links such as coal washing plants and traders slowed down. After May Day, the logistics situation in various places gradually improved. After three rounds of price cuts, coke enterprises may face losses. It is not ruled out that the production will be reduced due to losses. However, the coke inventory of some steel mills increased to a reasonable level and began to control the pace of purchase. However, the high yield of molten iron and the rigid demand still exist. Follow up attention shall be paid to the progress of steel plant warehouse increase and terminal demand. Overall, the supply and demand pattern of coal is still tight, and the prosperity of the industry will remain high. The growth rate of coal enterprises’ performance in the first quarter is generally fast, and the improvement of performance in the second quarter is expected to continue to exceed the expected performance; The high proportion of dividends of listed companies reached a new high since listing, boosted market sentiment and continued to be optimistic about the future market. It is suggested to focus on the target: power coal company Shaanxi Coal Industry Company Limited(601225) , Shanxi Coal International Energy Group Co.Ltd(600546) , Yankuang energy, China Shenhua Energy Company Limited(601088) ; Coking coal company Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Huaibei Mining Holdings Co.Ltd(600985) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Guizhou Panjiang Refined Coal Co.Ltd(600395) .
Steel: Coke finished the second round of lifting and lowering this week, iron ore fell below 130 US dollars / ton, and the support of high billet cost no longer exists. It is worth noting that the current billet cost is basically the same as that of the same period last year. The steel output is – 8% year-on-year, but the steel price is down 20% year-on-year. Therefore, from this perspective, it can be explained that the year-on-year decline in downstream demand is more significant. In fact, the macro data released this week just confirmed this point. Under the suppression of the epidemic, the new social finance in April halved year-on-year, and the pressure on the real economy is still great in the short term. From the perspective of supply structure, due to the diving of steel price, electric furnace steel fell into a state of loss, the operating rate and capacity utilization rate decreased, and the shutdown and maintenance of electric furnace steel plant increased. Next, as the cost of blast furnace continues to fall, the steel price will still be weak, and the gross profit margin of long and short process steel will further expand.
Nonferrous Metals: the Federal Reserve reiterated that controlling inflation is the top priority, and the impact of China’s epidemic continues to ease. 1) Inflation remained high and precious metal prices were weak and volatile. During the week, the US inflation data remained high, and the Federal Reserve reiterated that it would maintain a radical pace of interest rate increase in the future, and appropriately adjust the interest rate increase plan according to the future economic situation, so as to further curb the possible sustained inflation and weaken the precious metals as a whole. As of March 13, gold closed down 60.60% on Comex / oz; COMEX silver closed at US $21.001/oz, down 6.43% month on month; SHFE gold closed at 399.66 yuan / g, down 0.98% month on month; SHFE silver closed at 4629 yuan / kg, down 3.98% month on month. 2) The downward pressure on overseas durable goods demand increased, and the price of base metals fell. During the week, the Federal Reserve reiterated its plans to raise interest rates by 50 basis points twice in the future, and the US dollar index continued to strengthen. At the same time, with the continuous rise of financing costs and the decline of household savings, the pressure on the demand for durable goods increased, and the price of base metals was under pressure; In China, the epidemic situation has eased and the problem of logistics and transportation has eased. However, the increase of China’s social finance scale in April was less than expected, and the economic recovery needs to be further strengthened by the easing of the epidemic situation and the policy side. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by – 1.9%, – 0.2%, – 6.8%, – 6.6%, – 14.3% and – 9.9% respectively this week. The overall price fell.
Building materials: at the current time, we suggest paying attention to several main lines of building materials & new materials investment. First, the prosperity and performance fulfillment are selected from carbon fiber, quartz sand and glass fiber industries; Second, the marginal improvement of real estate policy, focusing on the layout of brand building materials; Third, cement and water reducing agent are selected for the main line of steady growth; Fourth, at the bottom of the photovoltaic glass industry cycle, with the support of cost, the industry basically has no downside risk; Float glass prices stabilized and rebounded while demand boosted. 1) In the field of new materials, the “limited overseas supply”, the explosion of demand in new energy fields such as wind, light and hydrogen downstream of carbon fiber, and China’s leading “grinding a sword in ten years”; Domestic leaders have finished catching up. In the future, capacity expansion and cost reduction will lead to surpassing in the civil field; In addition, we believe that the business continuity in the field of small and medium-sized tow is high, and the supply and demand pattern of precursor will be better than that of carbon fiber. High purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand increase + domestic alternative resonance, and UTG welcomed the outbreak of demand. 2) The glass fiber cycle is weakened, the roving boom is expected to continue (wind power, automobile, export, etc. bring strong support to the demand), the bottom of the price of electronic cloth has appeared, which is expected to continue to pick up, and the current safety margin is high. 3) The layout of brand building materials is at the right time. Since the second half of the year, the valuation and performance of brand building materials have been killed under weak demand + capital pressure + high cost. In the absence of significant improvement in real estate fundamentals, the policy continued to relax expectations, the credit risk faced by the real estate chain and the pessimistic expectation of market demand were repaired, and the sector rebounded as a whole. According to the historical resumption, the end of the general real estate policy corresponds to the end of the valuation of brand building materials. The end of this round of policy / valuation appears in 21q4. We expect the end of fundamentals to appear in 22h1. 4) The cost performance of cement allocation is high. The infrastructure development force and the marginal recovery of real estate under steady growth are expected to support the cement demand to maintain a high platform. However, the further coordination and optimization of cement core logic at the supply side in 22 years has generally strengthened the scope and intensity of peak staggering this year than last year, superimposing the high price center to maintain profitability and toughness. 5) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 6) The bottom price of photovoltaic glass is still upward flexible. The price continues to rise this week. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the field of photovoltaic glass; The price of float glass is adjusted at a low level, and the price is expected to stabilize with the gradual recovery of demand.
Chemical industry: US inflation and other factors may promote the adjustment of China’s commodity tariff policy review, or benefit China’s polyurethane industry chain export. Previously, the office of the US Trade Representative (USTR) said on May 3 that the two actions of imposing tariffs on Chinese goods exported to the United States four years ago based on the results of the “301 survey” will expire on July 6 and August 23, respectively. At that time, USTR will start the relevant review procedures. Due to the recent conflict between Russia and Ukraine and the continuous tension in the supply chain, the US inflation rate has reached a high level in the past 40 years. Recently, White House officials have repeatedly hinted that they will adjust the tariff policy for Chinese goods. During her visit to Canada from May 5 to 6, 2022, US trade representative Dai Qi said that US China Economic and trade relations have a far-reaching impact on the world. The two additional tariffs entering the review process correspond to the US $34 billion of Chinese products on July 6, 2018 and the US $16 billion of Chinese products on August 23, 2018, respectively. Then, a larger scale US $200 billion of products was launched on September 24, 2018, with an additional 10% tariff. Among them, the main isocyanate products, such as TDI and polymerized MDI, are included. We believe that if the United States cancels some tariff policies against China and continues to implement them, it will be conducive to China’s polyurethane products export. Beneficiary object: Wanhua Chemical Group Co.Ltd(600309) .
Risk warning event: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase. Policy price limit risk; Coal import volume; The macro economy has fallen sharply. Macroeconomic fluctuation, import and environmental protection and other policy fluctuation risks, gold price fluctuation risks, new energy vehicle sales are lower than expected risks, and the premise assumptions of industry supply and demand calculation are lower than expected risks. Risks of macroeconomic downturn; The epidemic has led to lower than expected demand; Risk of relaxation of production restriction and new production capacity; Risk of poor capital turnover of 2B end enterprises. Macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.
