As of January 14, the Shanghai Composite Index fell 1.65% and the Shanghai and Shenzhen 300 index fell 1.98% this week. The steel sector fell by 4.77%; Among the sub sectors, the ordinary steel sector increased by 0.00%, and the special material sector decreased by 6.05%.
Steel market: the price of steel is supported by the price rise of raw materials. We should pay attention to whether the winter storage market can start smoothly
This week, the price rise of raw materials supported the steel price. Steel price shocks are becoming stronger. Spot and futures prices rose this week, with futures rising more. The futures prices of rebar, hot rolling and wire rod rose by 3.05%, 2.03% and 0.48% respectively. According to the performance of the steel market this week, with the approaching of the Spring Festival holiday, some electric furnace plants have shutdown and maintenance plans, and the steel enterprises have a strong willingness to support the price. The holidays in various markets also gradually stagnated the downstream demand for steel, and the overall steel market gradually entered the closed state. It is expected that the steel market will be stable next week.
In terms of special steel, stainless steel has good support for a long time, so it is recommended to continue to pay attention. In the long run, driven by the dual carbon policy, the reduction of crude steel production has become a deterministic trend, and stainless steel has ushered in important benefits. It is suggested to continue to pay attention to Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Fushun Special Steel Co.Ltd(600399) and other targets.
As the core metal material in the field of new energy vehicles, electrical steel is also a sector worthy of attention. Stimulated by the decline of subsidies, the demand of the new energy vehicle industry will continue to increase in 2022. As the motor and core material of new energy vehicles, electrical steel sector will usher in a major opportunity. However, at present, the valuation of the sector is generally not high and is optimistic about the electrical steel sector for a long time. It is suggested to focus on Baoshan Iron & Steel Co.Ltd(600019) , Maanshan Iron & Steel Company Limited(600808) , Beijing Shougang Co.Ltd(000959) , etc.
As of Friday, the price of rebar in the spot market was 4750.00 yuan / ton, with a weekly decline of 0.42%; The price of hot rolled coil is 4960.00 yuan / ton, with a weekly increase of 0.20%; The price of cold rolled coil was 5550.00 yuan / ton, with a weekly decrease of 0.54%; The price of medium sector was 4920.00 yuan / ton, with a weekly decrease of 1.99%. In the futures market, the active contract price of rebar was 4664.00 yuan / ton, with a weekly increase of 3.05%; The active contract price of hot rolled coil was 4772.00 yuan / ton, with a weekly increase of 2.03%; The active contract price of wire rod was 4779.00 yuan / ton, with a weekly increase of 0.48%. The myspic composite steel price index was 176.76 points, with a weekly increase of 0.18%, of which the myspic long material index increased by 0.53% and the myspic flat sector index increased by 0.48%.
Raw material Market: the supply side faces the expectation of seasonal tightening, and the replenishment in the Spring Festival supports the ore price
Coke rose in the fourth round this week, and iron ore prices are facing the risk of falling. In terms of double coke, frequent environmental protection inspection, limited coal supply and strong coking coal price; Affected by the epidemic, coke transportation is blocked, steel enterprises' willingness to replenish warehouses is strengthened, coke enterprises' shipment is smooth, and the coke market may be ready to rise. In terms of iron ore, the shortage of resources has not been alleviated, the demand for iron ore by steel mills has increased, and the supply side is facing seasonal tightening expectations, supporting the rise of ore prices.
As of Friday, the price of Australian Pb powder in the spot market was 835.00 yuan / ton, with a weekly increase of 1.21%; The price of primary metallurgical coke was 3110.00 yuan / ton, with a weekly increase of 6.43%; The price of main coking coal was 2150.00 yuan / ton, with a weekly increase of 0.00%. In the futures market, the active contract price of iron ore was 722.00 yuan / ton, with a weekly increase of 0.42%; The contract coke price was 3082.00 yuan / ton, with a weekly decrease of 2.45%; The active price of coking coal was 2299.50 yuan / ton, with a weekly increase of 0.97%.
Steel supply and demand: stable supply and weak demand, and the steel market fluctuates steadily
In terms of steel output this week, cold rolling, hot rolling and rebar increased by 0.54%, 1.84% and 1.38% compared with last week, while medium and heavy sector and wire rod decreased by 1.39% and 0.80%. In terms of steel mill inventory this week, cold rolling and hot rolling inventory increased by 2.56% and 0.38% respectively, and wire rod, rebar and medium and heavy sector inventory decreased by 3.99%, 3.47% and 2.31%. The steel market has entered the "winter storage" market, and the demand is weak; Although the approach of the Winter Olympic Games has increased the intensity of production restriction, resulting in a weak supply side compared with the same period in previous years, the rise in raw material prices has made the cost support of the steel market stronger. China's steel market has gradually changed from "strong supply and weak demand" to "stable supply and weak demand", and will maintain a stable fluctuation trend in the short term.
Investment advice
With the recovery of manufacturing demand superimposed on the background of carbon peaking 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 China Daily report and the special steel leader who can realize the high prospect of the industry: Fushun Special Steel Co.Ltd(600399) ; Leaders in traditional fields + hot 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.
