Will the "steel bull" turn back from fanaticism to rationality?
Our reporter Zhao Ziqiang, Zhang Ying, Wu Shan, trainee reporter Ren Shibi, Chu Lijun
From last year to this year, resource-related cyclical products have become popular. The booming market cannot be separated from the high commodity prices. Various ministries and commissions have repeatedly voiced to "cool down" the commodity market.
Recently, the black futures contract has suddenly experienced a collective correction recently. Is it the peak of cyclical stocks?
Are steel stocks abandoned?
Where is the investment value?
The research department of "Securities Daily" took the lead in conducting in-depth discussions on investment opportunities in the steel industry in cyclical products through data analysis and institutional interpretation for investors' reference.
"Black" medium and long-term trend is cautiously optimistic
Recently, the continuous rise of steel-related "black" commodity futures has aroused market attention.
Statistics show that since the second quarter, as of May 14, the steel-related "black series" indexes have increased by more than 12%, which are: ferrosilicon index (19.42%), thermal coal index (18.76%), rebar index ( 15.31%), iron ore index (15.21%), coking coal index (15.20%), coke index (12.16%).
The rate of increase is the result of lagging behind in the past two trading days. If as of May 12, the above-mentioned index range will increase by more than 22%. Among them, the iron ore index has a cumulative increase of 32.59%.
In fact, the above-mentioned index has been rising for a long time. Taking the iron ore index as an example, the rising process has started since April last year, and the increase reached 114.34% on May 12 this year, especially in the second quarter of this year. The growth rate has increased significantly.
Other steel-related "black" futures indexes have basically shown a gradual acceleration in their rise since April last year.
Regarding the continued rise of the aforementioned commodity futures indexes, Hao Xinming, manager of Fangxin Wealth Investment Fund interviewed by a reporter from Securities Daily, said that since the beginning of this year, global monetary quantitative easing, rising inflation, and supply and demand factors have jointly driven the bulk commodity market to rise strongly. Other commodity sectors have successively broken through historical highs, and price increases are strongly supported by fundamentals and capital.
The rise in bulk commodities, including the "black line", has attracted the attention of the State Council while attracting market attention.
The executive meeting of the State Council held on May 12 requested that “to track and analyze the domestic and foreign situation and market changes, make market adjustments, and deal with the rapid rise in commodity prices and its associated effects. Strengthen the coordination of monetary policy and other policies to maintain economic stability run".
In the following two trading days this week, most of the commodity futures indexes fell significantly.
The above-mentioned "black series" indexes related to steel fell on May 13 and May 14 on both trading days. In order of cumulative decline, they were: iron ore index (13.11%) and thermal coal index (10.08%). , Coking coal index (8.79%), rebar index (8.57%), coke index (8.68%), ferrosilicon index (2.70%).
Regarding the adjustment of the above-mentioned index in the past two trading days, Hu Bo, a private equity fund manager interviewed by a reporter from the Securities Daily, said that the recent Fed’s concerns about hyperinflation have indeed significantly suppressed the rise in commodity prices. "Black" plummeting became the main tone of Friday's market.
In the future, the price of the "black system" mainly depends on the balance between supply and demand. The supply side will be affected by supply-side structural reforms and carbon neutrality. The demand side will need to see whether the United States enters a new housing construction cycle, because this may Bring a relatively large impact on demand.
"In the past two days, the price of the'black series' has changed from a unilateral increase to a sharp drop. This is a reflection of the self-regulation of the raw material supply and demand price market. The entire industry chain is seeking to rebalance the supply and demand relationship and redistribute the profit range." Daozhi Investment Executive Director Kang Daozhi Said to the "Securities Daily" reporter.
Kang Daozhi believes that in the near future, due to inflation expectations and mismatches between supply and demand, the "black" bulk commodities represented by iron ore, coke, rebar, etc. have risen sharply and set a new record high, which has caused the middle and upper reaches of the industry to gain The profit space has expanded sharply, but the profits of downstream industries have been sharply compressed.
The nature of commodity prices, in fact, the price swing reflects the dynamic balance of the interests of the upstream and downstream of the industrial chain.
When the price of raw materials or intermediate products rises too much, it will restrain the real demand. Once the downstream cannot bear the excessively high raw material cost and refuse to accept it, the profit chain of the industry chain may break, and the corresponding raw material prices will collapse, and finally achieve the upstream and downstream. New consideration.
Although the steel-related "black" commodity futures index has fallen in the past two days, companies and institutions are optimistic or cautiously optimistic about the future trend.
The latest research report of Donghai Futures shows that companies believe that this round of rise has little to do with domestic supply and demand, mainly due to excessive liquidity and strong overseas demand. Iron ore prices may still reach new highs.
CITIC Futures said that after the sharp rise in steel prices, the market gradually returned to calm as the threaded futures rose sharply, and the extreme market may come to an end.
The current domestic demand remains resilient, and the continuous recovery of external demand has brought about an increase in demand. Therefore, the expected supply contraction that suppresses crude steel production will make the steel face a larger supply and demand gap in the later period. Steel prices are likely to rise and hardly fall. However, due to the recent emotional catalysis , The price has shown a certain degree of substantial increase away from the fundamentals, and there may be a callback in the short term. The follow-up will maintain a high level and oscillating operation, and the range operation will be the main focus.
Relatively optimistic Hao Xinming is also optimistic about the mid- to long-term trend of the above-mentioned futures. From a medium-term perspective, economic data has clearly shown that the inflation rate is increasing. Before the epidemic does not improve and the global quantitative easing is not tightened, the balance of supply and demand will be difficult to break. The factor of commodity prices still exists, and the long-term trend depends entirely on the reversal of monetary policy and the relationship between supply and demand.
After short-term funds are profitable, they are safe
"2021 is destined to be extraordinary for bulk commodities. After several months of continuous surge, many varieties have broken through historical peaks. On the one hand, after experiencing a strong bottoming and rebound in 2020, the demand for commodities has maintained a considerable amount at this stage. On the other hand, the supply side is affected by "carbon neutrality" (domestic) and the epidemic (overseas), and the supply response is relatively slow, and there are expectations for further tightening of some products." Kaiyuan Securities will invest in the steel and non-ferrous metals industry in mid-2021 This is stated in the strategy report.
At the same time, the stock prices of steel companies have risen all the way.
Since April, as of May 14, the cumulative increase in the steel industry index during the period reached 12.42%, ranking first in the cumulative increase during the Shenwan first-level industry.
From the perspective of recent days, the steel industry index hit 3171.67 points on May 10, and then a callback occurred. As of the close of May 14th, it was reported at 2909.00 points, a callback of 262.67 points.
But overall, steel stocks are still gaining momentum.
In terms of individual stocks, 29 stocks in the industry achieved gains during the period, accounting for more than 80%, and 27 stocks outperformed the Shanghai Composite Index over the same period (up 1.41%).
Specifically, Chongqing Iron & Steel, TISCO Stainless, and Anyang Iron & Steel had the highest cumulative gains during the period, up 63.10%, 45.23%, and 42.75% respectively. In addition, Bayi Steel, Jiugang Hongxing, Benxi Steel Plate, Yongxing Materials, Eight stocks, including Xining Special Steel, Maanshan Iron & Steel, Linggang, and Shougang, all rose more than 20% during the period, and they performed well.
Regarding the strong performance of steel stocks, Long Hao, chairman of Jinding Asset Management, told the "Securities Daily" reporter that first of all, the overall growth of the steel industry is driven by four factors. The first is the increase in demand due to the domestic economic recovery and the continuous domestic inventory. Decline; the second is that under the influence of the carbon neutral policy, the steel industry has become the primary industry for energy conservation and emission reduction; the third is that with the impact of inflation expectations, rising raw materials have pushed up the price of finished steel and increased corporate profits Space, fourth, from a technical point of view, under the volatility of the steel sector for several consecutive years, there are opportunities for low-value investment.
In the process of rising steel stocks, market funds have gradually withdrawn.
Since April, as of May 14, only 5 stocks including Yongxing Materials, Bayi Iron and Steel, Xingang, Liugang, and CITIC Special Steel have shown net inflows of funds during large orders, and the remaining 31 stocks have large orders during the period. Funds all showed different degrees of net outflow. On the whole, the net outflow of funds from large orders during the period of steel industry stocks was 9.069 billion yuan.
In terms of individual stocks, Yongxing Materials, Bayi Iron and Steel, and Xinsteel had the largest net inflows of funds during the period of large orders, with 298 million yuan, 184 million yuan, and 116 million yuan, respectively, while Baotou Steel, Chongqing Iron and Steel, and Baosteel had large net inflows during the period. The net outflows of single funds all exceeded 1 billion yuan, with net outflows of 1.653 billion yuan, 1.349 billion yuan, and 1.035 billion yuan respectively.
Regarding the recent outflow of capital out of steel stocks, Zhu Sheng, a private equity ranking researcher interviewed by a reporter from the Securities Daily, believes that there are two main reasons for the outflow of capital out of steel stocks.
On the one hand, inflation continues
Rising heads and rising inflation expectations have caused investors to worry about tightening liquidity, which is one of the reasons why capital flows out of steel stocks. The recent U.S. inflation data has greatly exceeded expectations, and it has also made the market worried that interest rate hikes will come early, which will lead to steel and other industries. Cycle stocks have pulled back sharply, and signs of capital flight are very obvious.
On the other hand, the rising prices of bulk commodities such as steel will put greater pressure on downstream companies and affect the momentum of economic recovery. Therefore, to a certain extent, it will restrain the price increase of bulk commodities such as steel.
Long Hao said that since April, the large-scale capital outflows of steel stocks have generally shown a net outflow, indicating that the recent rapid rotation of the sector is still a feature of the current structural market. At the same time, some short-term funds have been pocketed after gaining profits, while some Institutional funds that had been heavily hedged in the early stage conducted share swaps after returning their capital. However, some retail funds were frantically rushing to raise individual stocks in the steel industry and were still optimistic about the later stage of the steel industry.
"Under the background of the uneven economic recovery, the short-term supply and demand structure imbalance of some commodities has led to continuous price increases, which has driven the market to excessive speculation. However, as the economy recovers in full and supply increases, prices are bound to fall, and large sums of money are fleeing. Funds are decisions made based on this expectation, which are relatively rational. Investors need to look at the longer term, not just seeing short-term supply and demand structural imbalances, but ignoring the long-term investment value." Xuan Jia Finance CEO Lin Jiayi told the Securities Daily reporter.
Six steel companies expected to increase their performance in the first half of the year
"The current manufacturing boom continues, the demand for sheet metal is strong, and the profitability of sheet metal mills hit a new high in recent years. The second-quarter performance of the steel industry is worth looking forward to. The overall valuation of the current sector has a large upward repair space." Guosen Securities pointed out in its latest research report.
In the context of environmental protection and production restrictions, the price of steel-related products has risen, and the industry's fundamentals have higher profitability, which has driven the industry's prosperity to continue to rise.
According to statistics from Flush, a reporter from the Securities Daily found that in 2020, the total net profit of 36 listed companies in the steel industry was 59.817 billion yuan, an increase of 2.84% over the same period of the previous year.
Among them, 21 companies achieved a year-on-year increase in net profit during the reporting period, accounting for nearly 60%.
Further statistics found that in the first quarter of 2021, the total net profit of 36 listed companies in the steel industry was 26.538 billion yuan, an increase of 243.77% over the same period last year.
Among them, 33 companies achieved a year-on-year increase in net profit in the first quarter of this year, accounting for more than 90%.
In terms of performance forecasts for the first half of 2021, as of now, seven listed companies in the steel industry have taken the lead in disclosing performance forecasts for the first half of 2021, and six companies are expected to increase their performance.
Six companies including Maanshan Iron and Steel, Shandong Iron and Steel, Shagang, Chongqing Iron and Steel, Baosteel, and Nanjing Iron and Steel are all expected to increase their net profit by more than 50% year-on-year in the first half of 2021.
Pan Helin, Executive Dean of the Institute of Digital Economy, Zhongnan University of Economics and Law, said in an interview with a reporter from the Securities Daily: "The fundamental profits of listed companies in the steel industry will rise: the current period is an upward period of inflation, and steel prices are also rising. This will allow the stocks owned by the steel industry or the steel in the production process to be sold at a higher price, so that the profits of the steel companies will increase, the inventory will decrease, and the cash liquidity will increase. However, there are two types of distinctions. Since the price of steel is synchronized with the increase in the price of iron ore, steel companies that have their own ore supply will have better profits and higher profits. In the long run, the steel industry can also improve performance by improving quality and efficiency, such as Through refined steel smelting, through environmental protection investment in future carbon rights trading, etc., the logic that can be seen in the short-term steel industry is price increases."
At the same time, Liu Wenting, a researcher with a similar view of private equity rownets, told a reporter from the Securities Daily: "The downstream demand in the steel industry has fully recovered, and the'carbon neutrality and carbon peaking' have led to a decline in steel production, thus breaking the supply and demand of the steel industry. The situation has caused the price of steel to rise sharply, and the profits of steel companies have rebounded, which has prompted a significant improvement in the fundamentals of the steel industry."
Yang Yinghua, manager of Mizuki Long Volume Fund, believes that the profit per ton of production capacity of steel companies is at the highest level in recent years, mainly due to the price increase of iron ore, the expectation of capacity suppression and the price increase of related products.
In the future, China's steel production capacity will be further concentrated, and the proportion of high-end profiles and special steel will be increased, which will be more beneficial to large steel mills.
It is worth mentioning that institutional investors such as social security funds and QFII as long-term funds have also deployed some steel stocks in advance.
Statistics show that as of the end of the first quarter of this year, 6 steel stocks have been held by the Social Security Fund, with a total stock market value of 2.743 billion yuan.
Among them, 5 steel stocks became the key targets of the social security fund’s new holdings in the first quarter of this year. The social security fund’s new holdings include Baosteel Co., Ltd. and Bayi Iron and Steel, holding 115.0258 million shares and 17.1 million shares respectively. Shares, the Social Security Fund continues to increase positions in 3 stocks including Xingang, Liugang and CITIC Special Steel.
In addition, as of the end of the first quarter of this year, 4 steel stocks were held by QFII. Maanshan Iron and Steel Co., Ltd. and Jiugang Hongxing became the new QFII holdings in the first quarter of this year. The number of shares held was 17.6785 million shares and 1139.87 respectively. Million shares.
Regarding the investment logic of the steel sector, Zhao Yuanyuan, investment director of Jianhong Times, told the reporter of the Securities Daily: “Leading stocks in the steel industry benefit from two aspects: First, steel products are due to economic recovery in Europe and the United States, and domestic'carbon neutral' strict production restrictions. Price increase. On the other hand, under the background of'carbon neutrality', leading steel stocks benefit from their economies of scale and can achieve carbon emission reductions with higher efficiency and lower unit costs, and can even sell carbon emission credits. The Matthew benefit of this benefit gap can also promote mergers and reorganizations in the steel industry."
Ping An Securities stated that in the medium and long term, leading steel companies that benefit from clear growth in manufacturing demand and stronger comprehensive competitiveness deserve continuous attention. Baosteel Co., Ltd. and CITIC Special Steel are recommended.
50% of the stocks of 13 companies are strongly recommended by the institution
Statistics show that the steel industry has recently been favored by major institutional investors and has become the most attractive sector.
According to statistics from Flush, a reporter from the Securities Daily found that since April, a total of 13 companies in the steel industry have been intensively visited by institutions, and the number of companies surveyed accounted for 36.1% of the industry.
From the perspective of the number of institutions participating in the survey, among the 13 listed steel companies mentioned above, Valin Steel, Yongxing Materials, Anshan Iron and Steel Co., Ltd. and other three receiving research institutions have 50 or more, respectively: 160, 69 and 54.
"The recent strength of the steel sector has benefited from the pro-cyclical strength, and commodity prices have also risen sharply." Liu Youhua, the research director of private equity row nets interviewed by a reporter from "Securities Daily", said that in recent trading days, the steel sector has seen obvious changes. Cool down.
The future may continue to rise after a sideways adjustment, but the speed will not be as fast as before.
The investment logic of the market outlook still lies in the inflation expectations caused by the over-issue of global currencies, and the resource market price changes caused by politics or conflicts in some regions.
At the same time, Tong Diyi, general manager of Longying Fortune Assets, told the "Securities Daily" reporter that the steel industry has recently undergone significant adjustments, but the steel sector is still the main line of investment throughout the year.
More recent adjustments have come from the regulation of the policy supervision side, such as window guidance on products, and frequent voices by the supervisory authority.
It can be seen that the overall supply and demand pattern of the steel industry has not changed. The demand for raw materials at home and abroad has maintained a dynamic balance, and the overseas economic recovery is superimposed. It is difficult for the total global raw material demand to drop significantly; in addition, the domestic steel production restriction trend has been Production restrictions continue to increase, and steel prices remain high, indicating that production restrictions are still the main driving force for high steel prices.
Therefore, the steel industry will continue to be active again and again in the market outlook, and leading companies with advanced production capacity will be excellent targets worthy of continuous tracking.
It can be seen that after intensive investigations and surveys of listed steel companies, major institutions continue to "like" outstanding companies.
Statistics found that among the 36 steel constituent stocks, 18 companies have been rated “buy” or “overweight” by the institution within the past 30 days, accounting for 50% of the total. Among them, Baosteel, Yongxing Materials, and Valin Steel , Fushun Special Steel, Yongjin Co., Ltd., CITIC Special Steel, Jiuli Special Material and other 7 companies, recommended more than 3 times or more.
Undoubtedly, under normal circumstances, risks and opportunities coexist.
The steel supply side under "carbon neutrality" is expected to usher in a major reshaping opportunity.
Kaiyuan Securities believes that investment opportunities in two areas can be paid attention to.
On the one hand, since 2021 is the first year that the Ministry of Industry and Information Technology has decided to reduce production, judging from the high year-on-year increase in steel production in the first three months, the supply of the industry in the future is likely to be strongly suppressed.
Because the upward elasticity of prices is much higher than the impact of the decline in output, the profitability of steel companies is expected to expand rapidly. In addition, leading companies generally have more complete environmental protection facilities and equipment, and they face less pressure to limit production. The main beneficiaries include: Baosteel Co., Ltd., Valin Steel , Taiyuan Iron and Steel Stainless, Xingang, Fangda Special Steel, Shougang, etc.; on the other hand, because the air pollution generated by electric furnace steelmaking is much smaller than that of blast furnace converter steelmaking, it is necessary to pay attention to the structural adjustment of general steel Investment opportunities in the electric furnace industry chain, the main beneficiaries: include Fangda Carbon, the leader in the production of graphite electrodes for electric furnace raw materials.
In addition, Dongtuo Investment Fund Manager Wang Chunxiu reminded in an interview with a reporter from the Securities Daily that the recent strong performance of steel stocks was due to the fact that steel product prices and per ton of steel profit have reached multi-year highs, and steel companies have achieved single-quarter performance in recent years. new highs. The investment logic of steel stocks is: a series of policy combinations such as supply-side restriction of production, capacity replacement, output reduction, mergers and reorganizations have changed the pattern of oversupply in the steel industry. Under the high-pressure policy, the price of steel products has risen, and the profitability of steel enterprises has improved, and value revaluation has ushered in. The market outlook needs to pay close attention to changes in supply-side policies and the prices of steel products, and pay attention to preventing the risk of a callback after a sharp rise in stock prices. (Securities Daily)