Main points:
The Shanghai and Shenzhen Composite Index rose by 23.02% this week. The steel sector rose by 3.09%; Among the sub sectors, the ordinary steel sector increased by 2.17%, and the special material sector increased by 4.34%.
Steel market: the reduction of LPR will boost the demand for commercial housing, and the steel consumption is expected to improve marginally after the epidemic is alleviated
On Friday, the central bank announced that the quoted interest rate (LPR) of one-year loan market remained unchanged, and the five-year LPR was reduced by 15bp to 4.45%. Recently, local real estate has issued a series of policies conducive to commercial housing transactions due to urban policies. The central bank's reduction of LPR is a booster for real estate infrastructure. At present, the demand for steel is still weak, and the epidemic has a great impact on downstream consumption. With the gradual improvement of the epidemic prevention and control situation and the continuous introduction of superimposed stimulus policies, steel consumption is expected to return to growth.
Steel prices fell slightly this week. Spot prices of rebar, cold rolling and medium sector fell by 1.63%, 0.55% and 0.39% respectively, and spot prices of hot rolling rose by 0.41%. See the breakdown categories specifically: in terms of hot-rolled sector and coil, the market trading has recovered slightly this week, the local processing volume in Shanghai has rebounded to the level of 20%, and the market price of hot-rolled sector and coil in Shanghai has increased slightly. However, some markets in Baoshan are silent again, which can not effectively support destocking, and the hot-rolled fundamentals are expected to deteriorate; In terms of scrap steel, scrap steel prices in Hebei, Liaoning, Beijing Tianjin Hebei and other markets continued their decline last week, dominated by weak downward trend, and market sentiment was pessimistic. They rebounded slightly on Friday this week, boosting market confidence; In terms of double coke, the coking coal auction market is divided, the main coking coal is relatively strong, the price of coal blending coal is down, the flow auction situation is increasing, the profit of coke enterprises is low, and the intention is to suppress the coal price; Coke prices rose and fell in the third round this week, the overall supply was high, the enterprise production enthusiasm was good, and the downstream demand rebounded slightly, but the terminal shipment was difficult, the enthusiasm for purchasing raw materials was poor, and the overall outlook was pessimistic.
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 482000 yuan / ton, with a weekly decrease of 1.63%; The price of hot rolled coil is 487000 yuan / ton, with a weekly increase of 0.41%; The price of cold rolled coil was 547000 yuan / ton, with a weekly decrease of 0.55%; The price of medium sector was 510000 yuan / ton, with a weekly decrease of 0.39%. In the futures market, the active contract price of rebar was 463800 yuan / ton, with a weekly decrease of 0.69%; The active contract price of hot rolled coil was 477000 yuan / ton, with a weekly increase of 0.06%; The active contract price of wire rod was 513800 yuan / ton, with a weekly increase of 0.06%. The myspic composite steel price index was 180.86 points, with a weekly decline of 1.50%, of which the myspic long material index and flat sector index fell by 1.92% and 1.00% respectively.
Raw material Market: as of Friday, the price of Australian Pb powder in the spot market was 948.00 yuan / ton, with a weekly increase of 1.83%; The price of primary metallurgical coke was 351000 yuan / ton, with a weekly decline of 5.39%; The price of main coking coal was 290000 yuan / ton, with a weekly decline of 6.45%. In the futures market, the active contract price of iron ore was 842.50 yuan / ton, with a weekly increase of 2.37%; The contract coke price was 347600 yuan / ton, with a weekly increase of 4.07%; The active price of coking coal was 267000 yuan / ton, with a weekly increase of 3.73%. The decline of last week continued at the beginning of this week; In the middle of the week, the central bank issued the housing loan policy, which played a positive role in boosting the real estate, and the price ushered in a short rebound; On Friday, the market again issued good news on loans, but affected by the continuous weakening of consumption and strong expectation of the epidemic, the market returned to the downward trend after a short rebound, and it will take time for market confidence to really boost.
Steel supply and demand: the resumption of production continues to increase, and the shortage of demand leads to the slow reduction of storage
In terms of steel mill inventory this week, cold rolling, wire rod and rebar increased by 2.53%, 0.98% and 0.63% respectively, while hot rolling and medium and heavy sector decreased by 2.30% and 4.19% respectively. In terms of steel output this week, the output of cold rolling and medium and heavy sector increased by 0.10% and 0.50% respectively, and the output of hot rolling, wire rod and thread decreased by 0.27%, 0.70% and 4.84% respectively. Although there was bottom reading during the week, the total demand was still relatively unstable, the thread inventory decreased, and the coil inventory still increased. East China has always encouraged greater efforts to resume production, but due to the current lack of demand, the inventory reduction rate is still slow.
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 domestic substitution space, 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 performance of the interim report and the leader of special steel in fulfilling the industry's high vision: 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.
