Wait for steady growth to drive steel demand and continue to pay attention to special materials [institutional review]

The Shanghai Composite Index is down 4% this week, while the CSI 300 Index is down 4.22%. The iron and steel plate fell 6.13%; in the sub-plate, the general steel plate rose by 0.005%, and the special materials plate fell by 5.46%.

Steel market: the profit per ton of steel has fallen somewhat, and the driving effect of waiting for steady growth on steel demand

Steel mill profits have fallen this week, steel demand driven by steady growth will continue to rise, but still need to wait for flowers to bloom. Steel prices have not fluctuated much this week, and the decline in steel mills' profits is more due to the rise in the price of raw materials such as minerals. On the demand side, 1) with the favorable macro policies and the conclusion of the two sessions in March, downstream demand may gradually start. Due to the restrictions of the Winter Olympic Games and the influence of the weather, the procurement enthusiasm deviation and the lag of construction start-up, the demand for steel since the Spring Festival is obviously weaker than in previous years, but with the end of the two sessions and favorable policies, the downstream demand will start gradually. 2) the state strongly supports the development of infrastructure this year, and infrastructure drives the demand for steel. For the demand for steel, infrastructure pull or more obvious, real estate pull demand is slightly inferior, with the support of national policy, the steel demand side will improve in the future. On the supply side, some steel mills arranged for overhaul in March, although the supply may decline in March, but on the whole, the pressure on the supply side is not great, can meet the current demand, and will still be able to keep the price and stable supply in the future. At the same time, some representatives at the two sessions pointed out that in the future, China's iron and steel industry may take iron and steel enterprises as the core and realize the matching improvement and effective extension of the iron and steel industry chain through self-construction or cultivation of downstream industries. gradually form a complete chain of iron and steel industry clusters.

Steel prices fluctuated little this week. Spot prices of rebar, cold-rolled steel and medium plate rose 0.81%, 0.18% and 0.39% respectively, while hot-rolled spot prices fell by 0.77%. Specifically look at the sub-categories: in terms of hot-rolled coil, the recent international situation has gradually eased, and the development trend of turning to negotiations is greater, so the commodities affected by this will also return to the fundamentals, and there will be a partial decline in prices in the near future. In terms of scrap, the current price trend in the recent mature period is weak, and the market trading tends to be cautious. at the same time, the recent epidemic situation occurs frequently in various places, the flow of resources is blocked, and the supply of scrap is relatively tight. generally speaking, it is expected that the price of scrap in the short term will be stable. In terms of medium and heavy plates, production and inventory have decreased both this week, and steel mills will be affected by the rise in raw material prices and the two meetings. To a certain extent, demand will pick up slightly, and it is comprehensively expected that the price of medium and heavy plates will be adjusted by shock in the short term.

In terms of special steel, under the guidance of high-quality development policy, subdivided tracks such as pipelines and steel structures are worthy of attention. From the point of view of the new infrastructure, China's pipelines have entered the upgrading stage, the construction of water supply and drainage system in rural areas is rough, and the construction of urban sponge pipe network is also imminent. It is suggested to pay attention to the new cast pipe, Jinzhou pipeline, Youfa Group and so on. As the core metal material in the field of new energy vehicles, electrical steel is also a plate worthy of attention. the rapid development of new energy vehicles has driven the downstream demand of electrical steel. at present, the valuation of the plate is generally not high, and we are optimistic about the electrical steel plate for a long time. It is suggested to pay attention to Baosteel shares, Maanshan Iron and Steel shares, Shougang shares and so on. This week, the price of rebar in the spot market is 4960.00 yuan / ton, with a weekly increase of 0.81%; the price of hot-rolled coil is 5150.00 yuan / ton, with a weekly decline of 0.77%; the price of cold-rolled coil is 5680.00 yuan / ton, with a weekly increase of 0.18%; the price of medium plate is 5160.00 yuan / ton, with a weekly increase of 0.39%. In the futures market, the rebar active contract price is 4917.00 yuan / ton, the weekly increase is 0.33%; the hot rolled coil active contract price is 5137.00 yuan / ton, the weekly decline is 1.40%; the wire rod active contract price is 5506.00 yuan / ton, the weekly decline is 0%. The Myspic composite steel price index was 185.30 points, with a weekly increase of 0.02%, of which the Myspic long wood index rose 0.34% and the Myspic flat plate index fell 0.37%.

Raw material market: the price of scrap steel market is mainly stable, and the coke market is stable and strong for the time being.

This week, the price of scrap market is mainly stable, and the coke market is stable and strong for the time being. In terms of scrap, the current price trend in the recent mature period is weak, the market trading tends to be cautious, and recently there are frequent outbreaks in many places, the flow of resources is blocked, and the supply of scrap is relatively tight. Under the superimposed cutting-edge model, the market's willingness to operate is not high. In the short term, it is expected that the price of scrap will be stable. In terms of double coke, coke enterprises have normal production, coke enterprises maintain low or zero inventory operation in the factory, that is, production and sales, and coke continues to be bullish, but recently, blast furnace production in Hebei and Handan is still limited. In the later stage, steel mills are considering further increasing production or even blast furnace production. It is expected that the coke market will be stable and strong in the short term.

As of Friday, the price of Australian PB powder on the spot market was 996.00 yuan / ton, a weekly increase of 1.53%; the price of primary metallurgical coke was 3510.00 yuan / ton, a weekly decline of 6.04%; and the price of main coking coal was 2600.00 yuan / ton, a weekly decline of 0%. In the futures market, the active contract price of iron ore is 822.00 yuan / ton, with a weekly increase of 1.17%; the active contract price of coke is 3677.50 yuan / ton, with a weekly increase of 2.58%; and the active price of coking coal is 3038.00 yuan / ton, with a weekly increase of 5.91%.

Steel supply and demand: steel inventory ushered in the inflection point, supply and demand to maintain a tight balance

In terms of steel mill inventory this week, wire rod, plate, rebar, hot rolling and cold rolling decreased by 2.78%, 3.74%, 8.75%, 3.53% and 6.06%. In terms of steel output this week, the output of cold rolling, medium and heavy plate, wire rod, medium and heavy plate and rebar decreased by 7.20%, 5.58%, 11.81%, 8.05% and 14.94%, respectively.

As the Paralympic Games are drawing to a close, the impact of production restrictions in various regions has weakened, coupled with the recovery of demand in March, blast furnace profits remain high, boosting the production enthusiasm of enterprises, thus ensuring the complacency of supply. On the demand side, due to the support of government policies, the demand for housing construction and infrastructure has gradually recovered. at the same time, domestic sales and exports of the manufacturing industry will form a strong support for plate demand, and steel supply and demand will maintain a tight balance in the future.

Investment suggestion

Manufacturing demand recovery superimposed carbon peak, carbon neutralization background, the profit logic of the iron and steel industry has been reconstructed, steel enterprises have further benefited from the cycle, we are still optimistic about the iron and steel sector for a long time. National defense industry, aerospace industry high scene demeanor superimposed broad domestic alternative space, high temperature alloy, special stainless steel, ultra-high strength steel and other products occupy an absolutely dominant position. It is suggested to focus on the special steel bibcock with high scene demeanor in the industry: Fushun special steel; traditional field leader + hot emerging business target is more favored by the market, it is suggested to focus on stainless steel rod and wire rod and mica lithium bibcock: Yongxing material; And the high-growth leader in the field of cold-rolled stainless steel: Yongjin shares.

Risk hint

Novel coronavirus's epidemic situation is repeated; the economic downturn is accelerating; the price of raw materials fluctuates sharply; the demand for steel for real estate has dropped sharply; and the process of steel destocking has been blocked.