Investment strategy: 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.
One week market review: this week, the Shanghai Composite Index rose 0.04%, the Shanghai and Shenzhen 300 index rose 1.11%, and the Shenwan steel sector fell 0.24%. This week, the main contract of rebar closed at 4711 yuan / ton, with a week-on-week increase of 47 yuan / ton, a range of 1.01%; the main contract of hot rolled coil closed at 4822 yuan / ton, with a week-on-week increase of 50 yuan / ton, a range of 1.05%; The main iron ore contract closed at 756.0 yuan / ton, with a week-on-week increase of 34 yuan / ton, or 4.64%.
The trading volume fell sharply: the weekly average of the national construction steel trading volume this week was 56400 tons, with a month on month decrease of 62700 tons. The social inventory of the five varieties was 9.702 million tons, an increase of 547000 tons month on month. This week, the downstream of building materials basically had a holiday, the trading volume decreased significantly, and the price of construction steel was consolidated. Next week is the last week before the Spring Festival, and there is still room for downward trading volume. In terms of inventory, with the weakening of market trading sentiment, the pace of steel outsourcing slows down, the self storage of steel mills increases, and the factory and warehouse are switched to the cumulative state.
Significant differentiation of blast furnace and electric furnace: this week, the blast furnace operating rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 76.25% and 54.76% respectively, with a month on week increase of + 0.48pct and flat; This week, the blast furnace capacity utilization rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 81.08% and 71.84% respectively, with a month on week increase of + 1.19pct and + 1.22pct. The operating rate of 71 home appliance arc furnaces this week was 25.52%, with a month on week ratio of -11.17pct; The capacity utilization rate was 29.02%, down from -9.93pct last week. In terms of blast furnace this week, the resumption and increase of production continued, and the output of molten iron continued to increase; In terms of electric furnace, in the case of loss in the production of electric furnace steel, the short process steel plant chose to take a holiday in advance, and the shutdown time was earlier than the same period last year. In terms of overall output, the output reduction caused by the shutdown of electric furnace steel is greater than the increment of blast furnace steel, and the output drops.
Steel price fluctuated in a narrow range: myspic comprehensive steel price index increased by 0.34% on a weekly basis, including 0.32% for long materials and 0.38% for sectors. Shanghai rebar 4730 yuan / ton, a decrease of 20 yuan / ton week on week, an increase of 0.42%. Shanghai hot rolled coil 4950 yuan / ton, an increase of 10 yuan / ton on a weekly basis, an increase of 0.20%. The demand for steel has entered the traditional off-season, and it is impossible to judge the trend of steel price from the perspective of supply and demand. At present, the steel price mainly depends on the market's expectation of the market after the festival.
Ore prices rose slightly: platts62%133.65 US dollars / ton this week, with a weekly increase of 6.9 US dollars / ton, and the price difference between high and low products expanded. Last week, the shipment volume of Australia and Brazil was 20.724 million tons, an increase of 851000 tons month on month, and the arrival volume was 11.862 million tons, a decrease of 269000 tons month on month. The latest steel mill imported ore inventory days are 30 days, unchanged from the last time. Tianjin Zhunyi metallurgical coke was 3210 yuan / ton, unchanged from last week. Scrap 3190 yuan / ton, 20 yuan / ton less than last week. The price of iron ore rose slightly this week. The ore price has rebounded significantly since November, which is related to the recovery of demand, inventory cycle and winter storage. The sustainability of these factors is limited. In the medium and long term, the ore price is expected to fluctuate downward.
Downward profit: the profit of mainstream steel has been declining for more than months. According to the steel data we simulated, the billet cost further increased during the week driven by the rising prices of coke, iron ore and ferroalloy at the raw material end. The price of finished products is still dominated by shock. At present, the profit per ton of steel squeezed by the cost continues, in which the gross profit of hot rolled coil (3mm) is reduced by 23 yuan / ton, and the gross profit margin is reduced to 8.53%; The gross profit of cold rolled sheet (1.0mm) is reduced by 77 yuan / ton, and the gross profit rate is reduced to 3.31%; The gross profit of deformed steel bar (20mm) is reduced by 52 yuan / ton, and the gross profit margin is reduced to 8.31%; The gross profit of medium and heavy sector (20mm) is reduced by 23 yuan / ton, and the gross profit margin is reduced to 4.58%.
Risk tip: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase.
