Investment Rating - The report maintains an "Overweight" rating for the steel industry [2] Core Viewpoints - Short-term demand in the steel industry is expected to remain slightly volatile during the off-season, but the overall demand for the year is not pessimistic. The negative drag from real estate on steel demand is expected to decrease, while infrastructure and manufacturing sectors are anticipated to maintain steady growth, which may offset the decline in demand from the real estate sector [4][8] - The report highlights that the profitability of steel companies has decreased, with the profit margins for rebar and hot-rolled coils showing significant declines. The overall profitability rate for 247 steel companies dropped to 15.15%, a decrease of 16.88 percentage points [5][18][22] - The report emphasizes that while real estate remains a major drag on demand, its share is expected to fall below 20% as policies take effect. Infrastructure is likely to provide support for steel demand, and manufacturing is expected to continue its steady growth [4][5] Summary by Sections Steel Prices and Inventory - The report notes a decrease in steel prices, with rebar prices dropping by 120 CNY/ton to 3220 CNY/ton, a decline of 3.59%. The total inventory of major steel products increased to 1757.86 million tons, with a slight rise of 0.64 million tons [5][8][14] - The apparent consumption of steel last week was 874.84 million tons, a decrease of 2.75% week-on-week and 7.11% year-on-year [14] Production and Operating Rates - The production of steel last week was 875.48 million tons, a decrease of 8.51 million tons from the previous week. The operating rate of blast furnaces among 247 steel mills was 82.33%, down by 0.3 percentage points [5][18][22] - The report indicates that the operating rate of electric furnaces was 58.33%, a decrease of 1.29 percentage points [18] Profitability and Cost Analysis - The simulated production profit for rebar was -124.2 CNY/ton, down by 70.4 CNY/ton, while for hot-rolled coils it was -14.2 CNY/ton, down by 60.4 CNY/ton [26] - The report mentions that the average price of iron ore and scrap steel has decreased, while coke prices remained stable, leading to a further contraction in steel company profits [5][22] Recommendations - The report recommends focusing on companies with advantageous product structures and competitive edges, such as Hualing Steel, Baosteel, and new material companies like Zhongxin Special Steel and Yongjin Co., Ltd. [5][4]
淡季需求继续小幅震荡
Guotai Junan Securities·2024-07-28 04:01