Steel industry: short-term fluctuations do not affect the industry fundamentals under the “stable economy”
As of January 16, the five varieties of thread, hot coil, medium and heavy sector, cold rolling and wire rod reported 4786 yuan / ton, 4871 yuan / ton, 4973 yuan / ton, 5413 yuan / ton and 5126 yuan / ton respectively this week. The circumferential ratio changed by 0.8%, 0.8%, – 0.5%, 0.5% and 0.6% respectively. In terms of social inventory, the social inventory this week was 9.1705 million tons, an increase of 283000 tons on a weekly basis. The inventory of major steel mills remained in the warehouse. The inventory of major steel mills this week totaled 4.1705 million tons, down 92900 tons from last week.
The raw material cost rose this week, which narrowed the gross profit per ton of steel. The gross profit per ton of steel for thread, hot coil, medium and heavy sector, cold rolling and wire rod was 201 yuan, 165 yuan, 86 yuan, 212 yuan and 455 yuan respectively, down 133 yuan, 67 yuan, 136 yuan, 99 yuan and 89 yuan compared with last week.
We are optimistic about the steel demand under the stable economy. At present, the steel inventory remains low, and the Spring Festival holiday is coming. The resumption of work after the Spring Festival holiday is expected to bring strong steel demand. At present, the lower inventory may form a certain support for the future steel price.
The pipeline related targets continued to rise this week. We believe that the policy break signal continues to be released, superimposing the word “stability” of the economy in 2022. Local government meetings have been held to discuss this year’s economic work. At present, the pipeline industry is gradually transitioning from expectation to policy implementation. Therefore, we believe that under the background of “stabilizing the economy”, the pipeline industry is expected to accelerate the release of demand again with certainty. It is strongly recommended to pay attention to the relevant targets of the pipeline industry under the stable economy.
In addition, our first subdivided high-end variety of steel, electrical steel, is the core magnetic material driving modern industry. In particular, high-grade non oriented electrical steel for new energy vehicles has extremely high technical barriers. Baosteel and Shougang master the core technology. Since new energy vehicles can only use high-grade non oriented silicon steel instead of all varieties, the consumption of new energy vehicles will account for 10% of the output of high grades in 2020. In addition, the motor energy efficiency upgrading plan (2021-2023) has been released. The improvement of motor energy efficiency standards will bring a lot of demand for high-grade non oriented silicon steel. It is recommended to pay attention to the main targets of electrical steel: Beijing Shougang Co.Ltd(000959) , Baoshan Iron & Steel Co.Ltd(600019) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Xinyu Iron & Steel Co.Ltd(600782) , Maanshan Iron & Steel Company Limited(600808) .
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Industrial sector companies: Beijing Shougang Co.Ltd(000959) , Hunan Valin Steel Co.Ltd(000932) , Nanjing Iron & Steel Co.Ltd(600282) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , Maanshan Iron & Steel Company Limited(600808) , Baoshan Iron & Steel Co.Ltd(600019) , Xinyu Iron & Steel Co.Ltd(600782) , Angang Steel Company Limited(000898) .
Key special steel companies: Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Citic Pacific Special Steel Group Co.Ltd(000708) , Fushun Special Steel Co.Ltd(600399) , Jiangsu Toland Alloy Co.Ltd(300855) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) .
Building materials companies: Fangda Special Steel Technology Co.Ltd(600507) , Sansteel Minguang Co.Ltd.Fujian(002110) , Sgis Songshan Co.Ltd(000717) .
Municipal pipeline material company: 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) , Ningxia Qinglong Pipes Industry Group Co.Ltd(002457) .
Nonferrous Industry: continue to be optimistic about the lithium and rare earth sectors where prices continue to rise under the tight balance between supply and demand and low inventory in the industrial chain
Before the Spring Festival, the price of upstream raw materials of new energy continued to rise, which also reflected the current shortage of upstream supply and low inventory. In the lithium sector, spodumene quoted us $2690 / ton this week, up 3.07%; Lithium hydroxide quoted 262500 yuan / ton, up 17.45%; The quotation of battery grade lithium carbonate was 320000 yuan / ton, up 2.73%. In rare earth sector, praseodymium and neodymium oxide, dysprosium oxide and terbium oxide were quoted at 905000 yuan / ton, 2990000 yuan / ton and 12.9 million yuan / ton this week, up 0%, 1.7% and 6.04% respectively. In the magnetic materials sector, the introduction of energy-saving motor policy under the guidance of double carbon and the pull of magnetic materials under the rapid development of new energy, wind power and photovoltaic energy storage in the future. We are optimistic about the pull of rare earth permanent magnet materials under the trend of high-efficiency energy-saving and miniaturization of motors for a long time, and the demand for new high-efficiency soft magnetic materials silicon steel and metal soft magnetic powder cores in the new energy era;
In terms of industrial metals, SHFE copper prices rose 2.79% to close at 71460 yuan / ton this week; SHFE aluminum price rose 0.14% to close at 21160 yuan / ton. This week, the United States announced that the non seasonally adjusted CPI in December recorded 7%, which was consistent with expectations, reaching the highest level since June 1982, with the previous value of 6.8%; Fed hawks met expectations, high inflation stimulated commodity prices, and copper prices rose significantly; The European energy crisis led to the reduction of aluminum production, but this week, the worries were relieved, and the market focus turned to downstream demand; In terms of alumina, the Beijing Winter Olympics is approaching, the production of some alumina enterprises in Shandong is limited, and the environmental protection control is becoming stricter. It is expected to stimulate the alumina price to a certain extent. At the same time, some downstream processing enterprises gradually enter the state of Spring Festival holiday, the demand is sluggish, and the inventory is expected to continue to rise. At present, relevant policies are being deployed around steady growth, and the issuance of special bonds has accelerated. At the regular policy briefing of the State Council on special bond management, Xu Hongcai said, “Considering the great pressure of steady growth in the first quarter of next year, the Ministry of finance has recently issued some new special bond lines in advance, requiring all localities to issue and use them early in the first quarter of next year. The issuance of special bonds next year should grasp three words: early, accurate and fast”. The steady growth measures of local governments are expected to accelerate the implementation, the fundamentals of basic metals will reverse, and the metal raw material industry will usher in a new round of market.
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\u3000\u3000 China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) 、 Ganfeng Lithium Co.Ltd(002460) 、 Tianqi Lithium Corporation(002466) 、 Qinghai Salt Lake Industry Co.Ltd(000792) 、 Shenghe Resources Holding Co.Ltd(600392) 、 Rising Nonferrous Metals Share Co.Ltd(600259) 、 China Minmetals Rare Earth Co.Ltd(000831) 、 Poco Holding Co.Ltd(300811) 、 Hengdian Group Dmegc Magnetics Co.Ltd(002056) 、 Ningbo Jintian Copper (Group) Co.Ltd(601609) 、 Zhejiang Hailiang Co.Ltd(002203) 、 Guangdonghectechnologyholdingco.Ltd(600673) 、 Kbc Corporation Ltd(688598) 、 Zijin Mining Group Company Limited(601899) 、 Western Mining Co.Ltd(601168) 、 Aluminum Corporation Of China Limited(601600) 、 Yunnan Aluminium Co.Ltd(000807) 、 Henan Shenhuo Coal&Power Co.Ltd(000933) 。
Risk tips: the risk of sharp fluctuation in the price of upstream raw materials, the risk that the downstream demand is less than expected, and the risk of continuous spread of overseas epidemic.
