Near the Spring Festival, the trading of steel market tends to be light. The recent price performance is that the iron ore is relatively strong, the steel price rises slightly driven by the cost, and the profit of steel smelting shrinks. On the whole, the market is still trading, and the steel enterprises resume production. Hot metal production has been on the rise since the end of last year, with the share of extruded electric furnace steel and the profit per ton of steel declining. The Winter Olympic Games after February may lead to the phased strengthening of production restriction in North China. At that time, it may be conducive to the stabilization of the profit per ton of steel, but the supply policy will face uncertainty again after March. At that time, the profit of steel will depend on the steady growth, the demand pulse and the loosening of the supply side. Overall, this year’s steel profit is expected to be a lower level than last year. It is suggested to look for opportunities from the growing new material industry and pay attention to Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Fushun Special Steel Co.Ltd(600399) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Yongxing Special Materials Technology Co.Ltd(002756) , etc.
Risk tip: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase.
