Stable steel price was stable, and the sector fell due to the expected impact
After last week’s counter trend rebound, the steel sector has made a series of pullbacks recently. If only from the industry level, the rise of the sector lacks support, because since mid December, due to the continuous strong price of raw materials, the profit per ton of steel has been narrowing, and the rise of the sector in the early stage is more driven by macro policies. We have repeatedly mentioned in recent reports that the key to driving the rise of commodities and stock prices in the absolute off-season lies in demand expectation and environmental protection production restriction. Due to the steady growth in 2022, the probability of environmental protection production restriction is lower than expected. Therefore, the catalysis of macro policies has become the key to determine the trend of the sector. Since “steady growth” is the focus of economic work in 2022, with tight time and heavy tasks, it is obvious that the investment side should make efforts, at least not become a drag on economic stabilization. However, subject to various implicit constraints brought by real estate and infrastructure stimulus, the problems of speed and quality, short-term and long-term balance lead to doubts about the strength of steady growth in the current market, and commodities and stocks move forward in fluctuations. The cyclical sector is strongly related to economic policies in terms of profitability and valuation. We continue to be optimistic about investment opportunities in segments that benefit from steady growth, especially in areas that are not affected by the relaxation of supply margin, such as water pipe industry. The main benefit targets are Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Xinxing Ductile Iron Pipes Co.Ltd(000778) , and the benefit targets of infrastructure blocks are Fangda Special Steel Technology Co.Ltd(600507) , Sgis Songshan Co.Ltd(000717) , As well as the targets benefiting from the price rise of raw materials under the recovery of hot metal production, such as Hbis Resources Co.Ltd(000923) , Inner Mongolia Dazhong Mining Co.Ltd(001203) .
The ore price fluctuates at a low level, and the coke price is expected to be strong
(1) iron ore: the iron ore inventory in port 45 this week was 156971900 tons, up 920900 tons month on month; The global shipment of iron ore was 26.954 million tons, down 7.711 million tons on a weekly basis. Among them, the shipment of iron ore in Australia was 15.172 million tons, with a decrease of 4.094 million tons on a weekly basis; Brazilian iron ore shipments were 4.701 million tons, down 1.585 million tons on a weekly basis. At the same time, the molten iron output of 247 steel plants this week reached 2136900 tons, with a week-on-week increase of 51700 tons. This week, the iron ore port inventory accumulated slightly, with a month on month increase of 920900 tons. The blast furnace operation rate and steel plant capacity utilization rate continued to rise, and the ore price maintained a slight rise as a whole. Under the background of the expectation of steel plant resumption of production, the ore price was relatively strong. (2) Coke: the third round of increase this week has landed, the fourth round of 200 yuan / ton increase has been started, with a cumulative increase of 500-520 yuan / ton, and the short-term coke price is expected to continue to rise.
Plate key data tracking
Weak demand operation: this week (1.10-1.14), the average trading volume of national construction steel was 119200 tons, with a decrease of 28400 tons on a weekly basis. According to the calculation of Mysteel data, the apparent consumption of deformed steel bars was 2.648 million tons, with a decrease of 61000 tons on a weekly basis; The apparent consumption of hot-rolled coil was 3.123 million tons, with a weekly increase of 52000 tons;
Supply picked up month on month: the operating rate of blast furnaces in China (247) was 75.77%, with a week on month increase of 1.57 PCT; The capacity utilization rate of Tangshan steel plant was 70.62%, and the week on month ratio increased by 9.69pct. The national weekly output of the five varieties was 9.349 million tons, up 71000 tons month on month;
Profit continued to decline: this week (1.10-1.14), the gross profit per ton of rebar was 313 yuan, down 210 yuan month on month; The gross profit per ton of hot rolled sector was 311 yuan, down 173 yuan month on month; The gross profit per ton of cold rolled sheet was 151 yuan, down 202 yuan month on month; The gross profit per ton of medium and heavy sector was 137 yuan, down 295 yuan month on month.
Risk tip: terminal demand has fallen sharply, and the environmental protection production restriction policy is less than expected.
