Steel Industry Research Weekly: After The National Day, The Steel Plate Has A Good Start

Based on the statistics of the rise and fall of the steel plate on the first day and the first week after the National Day in the 21 years from 2000 to now, it is found that:

On the first day after the national day, the probability of steel plate rising was 61.90%, with an average increase of 0.35%; Over the same period, the rise probability of Wande quana was 66.67%, with an average increase of 0.60%, and the relative income of steel plate relative to Wande quana was – 0.25%. In the first week after the national day, the probability of steel plate rising was 76.19%, with an average increase of 0.43%; Over the same period, the rise probability of Wande quana was 76.19%, with an average increase of 0.36%, and the relative income of the steel sector relative to Wande quana was 0.07%. The steel plate has a high probability of a good start after the festival.

Before the festival, the steel sector has made a sharp correction for several weeks, mainly due to the market capital preference. On the contrary, with the peak decline of double coke price, the continuous decline of iron ore price, the decline of billet cost and the continuous expansion of steel enterprise profit. In terms of breakdown, the gross profit per ton of long process deformed steel bar is 1194 yuan / ton and that of short process deformed steel bar is 1070 yuan / ton. Wire rod has the highest profit, with long process gross profit of 1524 yuan / ton and short process gross profit of 1400 yuan / ton. Under the golden nine silver ten peak season, the purchasing volume of thread snails in Shanghai has increased continuously on a four week basis (excluding the influence of festivals). The steel inventory has continued to decline since early August, and the speed of demand improvement may accelerate.

With the continuous rebound of steel price and the peaking of cost side, the steel profit continues to expand, and the follow-up may return to the high level of the second quarter. From the perspective of performance elasticity, at present, wire rod is better than plate, paying attention to Songshan, Bayi Iron and steel, Shougang, Fangda special steel, etc; From the perspective of less impact of production reduction, we pay attention to Linggang, Fangda special steel, Xingang, Minguang, etc.

Terminal demand recovered and the operating rate of blast furnace decreased slightly

The procurement volume of thread snails in Shanghai was 11800 tons, down 41.30% month on month, 15100 tons compared with the same period last year, down 56.1% year-on-year, mainly due to the impact of festivals. The operating rate of blast furnace was 54.14%, with a month on month decrease of 1.52 PCT and a year-on-year decrease of 14.51 PCT; The operating rate of electric furnace was 60.90%, with a month on month decrease of 1.92 PCT and a year-on-year decrease of 7.69 PCT.

Iron ore prices continued to fall and double coke prices peaked

This week, the iron ore futures price rose by 35 yuan / ton to 715 yuan / ton, or 5.15%; The price of coking coal futures increased by 121 yuan / ton to 3764 yuan / ton, or 3.31%; The spot price of coke futures fell 101 yuan / ton to 3954 yuan / ton, an increase of – 2.48%. Overseas iron ore shipments totaled 24.414 million tons, down 160000 tons month on month, down 1%; The total amount of ore arriving at the northern port was 11.87 million tons, an increase of 4.883 million tons month on month, an increase of 70%.

The cost decreased and the profit of steel mills continued to rise

From the perspective of profitability of different steels, as the price of double coke peaked and fell, while the price of iron ore continued to fall, the cost of billet began to decline, and the profitability of steel mills expanded rapidly. In terms of breakdown, the gross profit per ton of long process rebar is 1194 yuan / ton, and the gross profit per ton of short process rebar is 1070 yuan / ton. Wire rod has the highest profit, with long process gross profit of 1524 yuan / ton and short process gross profit of 1400 yuan / ton.

Risk tip: macroeconomic repair is not as expected; Global inflation is higher than expected; The increase of ore production did not meet the expectation; The development and vaccination progress of new crown vaccine was lower than expected.