Key investment points
Investment strategy: after the central government lowered the lower limit of the first house mortgage interest rate on the 15th, the interest rate cut fell to the ground on Friday, and the LPR over five years was reduced by 15 basis points, reflecting the government's determination to stabilize real estate. The strength of steady growth monetary policy boosted market confidence to a certain extent, and steel prices stopped falling and rebounded slightly on Friday. On the cost side, the third round of coke lifting and lowering was completed, with a cumulative decrease of 600 yuan / ton, and the billet cost further decreased. This week, the production of blast furnace was flat month on month, the production level of electric furnace continued to decline under the continuous loss, and the total output of steel decreased significantly month on month. Under the contraction of supply, the apparent consumption has not been raised, and the situation of weak supply and demand is obvious. In terms of import and export, the growth rate of external demand in April was lower than expected. In May, with the gradual digestion of the phased shortage of supply and demand caused by the conflict between Russia and Ukraine, coupled with the pressure on commodity prices under the interest rate increase of the Federal Reserve, overseas steel prices rose and fell. It is expected that the phased recovery of external demand for steel may end in the first half of the year.
One week market review: this week, the Shanghai Composite Index rose 3.09%, the Shanghai and Shenzhen 300 index rose 2.23%, and the Shenwan steel sector rose 3.09%. This week, the main contract of rebar closed at 4638 yuan / ton, down 32 yuan / ton from last week, with a range of 0.69%. The main contract of hot rolled coil closed at 4770 yuan / ton, an increase of 3 yuan / ton from last week, with a range of 0.06%; The main iron ore contract closed at 831.5 yuan / ton, an increase of 20 yuan / ton over last week, an increase of 2.46%.
The trading volume of construction steel rebounded slightly: the weekly average trading volume of national construction steel this week was 156400 tons, an increase of 3000 tons compared with last week. The social inventory of the five varieties was 15.234 million tons, down 291600 tons month on month. The trading volume of construction steel rebounded slightly this week, and the trading volume remained weak as a whole. In terms of inventory reduction, the reduction rate of long wood is higher than that of sector, but the overall inventory level has not been significantly improved.
The utilization rate of electric furnace capacity decreased significantly: this week, the blast furnace operating rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 83.01% and 57.14% respectively, with a month on week increase of + 0.4pct and flat; This week, the blast furnace capacity utilization rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 88.66% and 75.14% respectively, with a month on week increase of + 0.38pct and + 1.8pct. This week, the operating rate and capacity utilization rate of 85 home appliance arc furnaces were 69.62% and 59.29% respectively, compared with -1.41pct and -7.76pct last week. The blast furnace capacity has not changed much this week. In terms of electric furnace, affected by the reduction of profit, the number of shutdown and maintenance of electric furnace capacity continues to increase, and the capacity utilization rate has decreased significantly this week.
Weak operation of steel price: the myspic comprehensive steel price index decreased by 1.5% month on month, including 1.92% for long materials and 1.0% for sectors. Shanghai rebar is 4820 yuan / ton, with a decrease of 80 yuan, or 1.6%. Shanghai hot rolled coil 4830 yuan / ton, an increase of 10 yuan / ton over the previous week, an increase of 0.2%. This week, steel prices continued the weakness of last week. The price decline of long products was slightly higher than that of sectors. The cost of raw materials this week was basically the same as that of last week. The number of steel mills that reduced steel prices continued to increase.
The price of raw materials continued to fall: platts62%129.4 US dollars / ton this week, with a decrease of 2 US dollars / ton on a weekly basis. This week, the shipment volume of Australia and Brazil was 22.408 million tons, an increase of 388000 tons month on month, and the arrival volume was 9.213 million tons, a decrease of 562000 tons month on month. The latest steel mill imported ore inventory days were 26 days, unchanged from the last time. Tianjin Zhunyi metallurgical coke was 3410 yuan / ton, down 200 yuan / ton from last week. Scrap 3290 yuan / ton, down 40 yuan / ton from last week. The price of iron ore was basically the same as that of last week. This week, China's coke completed the third round of increase and decrease, the price decreased by 600 yuan / ton, and the cost of raw materials was further loosened.
The profit per ton of steel continued to rebound: the profit of mainstream steel continued to rebound this week. According to our simulated steel data, the billet cost continued to decline due to the large decline in coke price. The gross profit of hot rolled coil (3mm) increased by 86 yuan / ton, and the gross profit margin increased to 1.15%; The gross profit of cold rolled sheet (1.0mm) increased by 49 yuan / ton, and the gross profit margin increased to - 1.7%; The gross profit of deformed steel bar (20mm) increased by 16 yuan / ton, and the gross profit margin increased to 5.43%; The gross profit of medium and heavy sector (20mm) increased by 66 yuan / ton, and the gross profit margin increased to 3.05%.
Risk tip: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase.
