Reporter | Wang Yong
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For the steel industry, carbon neutrality is essentially a "supply-side reform" wrapped in new clothes, which has supported the continued rise in steel prices in the near future.
As of 15:00 p.m. on April 6, the main contract of rebar futures was 5,180 yuan/ton, up 2.07% from the previous trading day and up more than 50% from the same period last year. This price has hit a new high in a decade, with a cumulative increase of about 20% this year. The futures prices of
hot-rolled coil plates and wire materials have also reached new highs since the listing of futures products, with cumulative increases this year being 22% and 15% respectively.
According to statistics from China Securities, as of the week ending March 26, the gross profit of domestic rebar was 560 yuan/ton, reaching the best level since the beginning of 2020.
steel stocks are also declining. Data released by GF Futures on April 6 showed that the current inventory of rebar has dropped by 980,000 tons to 16.28 million tons; the inventory of major steel varieties has dropped by 1.62 million tons to 27.95 million tons, a month-on-month decrease of more than 5%, and the decline has increased. Since its listing in April 2009, rebar futures have seen such a strong price increase in price in 2017. The background at that time was that the global economy of was recovering simultaneously, and China's steel industry began to implement production capacity reduction and environmental protection production restrictions.
The background of this wave of price increases is that the global economy is showing a recovery trend in the post-epidemic period, while China further adjusts the steel industry structure under the guidance of the "30.60" carbon emission reduction target.
is affected by the carbon neutrality policy, and the production capacity on the steel supply side is limited.
As a high-intensive energy consumption industry, the steel industry is a major carbon emissions among the 31 categories of manufacturing, accounting for about 15% of the country's total carbon emissions.
industry forecasts that since China stated that since China has achieved carbon peak by 2030 and carbon neutrality by 2060, this theme will be carried out in the process of structural reform of industrial products for a considerable period of time in the future.
Guotai Junan believes that under the background of carbon neutrality, the steel industry may have a supply and demand gap this year. In the long run, the industry's 20 years of capacity expansion cycle has basically ended.
The steel industry production restrictions are being upgraded. On March 19, Tangshan City took the lead in issuing a production cut notice, requiring seven other steel companies including Donghua Steel to implement emission reduction measures of 50% in the first half of the year and 30% in the second half of the year. In addition, 16 steel companies have implemented emission reduction measures of 30% of production restrictions throughout the year.
production capacity may be further expanded in other provinces and cities. According to the National Development and Reform Commission on April 1, the National Development and Reform Commission and the Ministry of Industry and Information Technology will organize a nationwide "look back" inspection on steel capacity reduction and crude steel output reduction this year, guiding steel enterprises to abandon the extensive development method of winning by quantity and promote high-quality development in the steel industry.
The "look back" of steel capacity reduction will focus on checking the implementation of steel capacity reduction work in relevant regions since 2016 and the implementation of rectification. The main things are to resolve excess steel production capacity and crack down on the shutdown and withdrawal of smelting equipment involved in "ground steel"; the rectification and implementation of problems found in previous inspections; the work of the leading group for resolving excess steel production capacity; the situation of carrying out the reduction of crude steel production in 2021, etc. On the demand side of
, both domestic and foreign markets are in a period of synchronous explosion.
From a domestic perspective, new infrastructure projects continue to be implemented to drive overall steel demand. Since the beginning of this year, major project plans in various provinces and cities have been implemented one after another, and projects under construction and new construction have been started intensively, including intercity railway construction, charging piles, 5G base stations, etc.
is followed by the development of the new energy industry, which has driven the demand for traditional metals such as steel, including the construction needs of fans, energy storage, etc.
Real estate demand for steel may further increase. In the first two months of this year, the national commercial housing sales area was 173.63 million square meters, a year-on-year increase of 104.9%, an increase of 23.1% compared with the same period in 2019; the national commercial housing sales amount was 1915.1 billion yuan, a year-on-year increase of 133.5%, and a year-on-year increase of 49.6% compared with the same period in 2019.
Overseas market demand rebounded beyond expectations, and the slow recovery of production capacity will drive domestic steel exports. According to the World Steel Association, the EU's crude steel production in 2020 was 138.8 million tons, a year-on-year decrease of 11.8%, down from the 2017 peak of 169 million tons for the third consecutive year.
Tongwu Securities said that it is expected that China's steel exports will rebound to the historical median level this year, bringing a demand increase of about 40 million tons.
The profit margin of steel companies is also expected to be further expanded. GF Futures data pointed out that the spot and market profits of rebar increased month-on-month, with the market profit of May contracts of 988 yuan/ton and the market profit of October contracts of 1158 yuan/ton.
My Steel Network Information Director Xu Xiangchun pointed out to Interface News reporters in March that it is expected that steel prices will remain at high levels in the next few months, and there is even a certain room for growth.
In the case of tight supply, good demand and limited price growth of raw materials such as iron ore and coke, steel companies such as Huali Steel (000932), Baosteel Co., Ltd. (600019), Xingang Co., Ltd. (600782), and rebar companies such as Fangda Special Steel (600507), Sangang Minguang (002110), Shaogang Songshan (000717), etc. may benefit.
As of the close of April 6, the above-mentioned steel companies closed higher across the board. Among them, the share price of Huali Steel closed at 7.84 yuan, an increase of 0.51%; Baosteel Co., Ltd. closed at 8.23 yuan, an increase of 0.61%; Xingang Co., Ltd. closed at 6.4 yuan, an increase of 4.92%; Fangda Special Steel closed at 9.20 yuan, an increase of 0.22%; Sangang Minguang closed at 7.76 yuan, an increase of 0.91%; Shaogang Songshan closed at 5.04 yuan, an increase of 0.8%.
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