|
China’s Steel Prices in Doldrums, Xinjiang RebarRemains Strong but Hot Rolled Steel Weak.
Recommendation:
Short-term focuses: (1) Steel prices declined further last weekfor the 14th consecutive week and hit record low again; (2)Since 24 July, overall Xinjiang rebar prices have continued togain by Rmb240/tonne (up 11%) vs. a drop of Rmb20/tonne inShanghai. Whether the premium will sustain is noteworthy; (3)according to a probe for the e-commerce sales of 20 steel millswith a processing capacity of 10Mt, four had e-commerce salesaccounting for 10% of total sales, while three planned to lift theratio to 50%.
Sector-wise, the steel industry intrinsically failed to retire itsovercapacity in more than two months. We are cautious aboutthe overall sector, and continue to be optimistic about individualstocks mainly because many companies will restructure andchange their business models amid the general industrydownturn.
Hot picks: EMIS, Shanghai Ganglian, Changbao, Ling Steel,Baosteel.
Drop in steel prices accelerated in China, but Xinjiangrebar prices have steadied, while hot rolled steel priceswere at bottom. Last week, Myspic Composite Index shed1.57%. Prices of oriented electrical steel dipped 0.69%. TheIron Ore Price Index dived 0.67%. Xinjiang grade III rebarprices have surged Rmb240/tonne since 24 July, beingRmb260/tonne higher than that in Shanghai, but Xinjiang rebarprices fell by Rmb180/tonne for the same period, beingRmb10/tonne lower than that in Shanghai.
Operating rate of steel mills rose slightly, but the sentimentindex of the steel market fell to record low this year.
Operating rate of 150 blast furnaces in Tangshan was 83.54%,up 1.21 ppts MoM. Steel inventory of key enterprises in lateOctober was down by 9.38% as compared with mid-October.
Last week, the sentiment index of the steel market hit recordlow for the year of 17%.
Small market correction, with all sub-sectors edging down.
Last week, CSI 300 was down 1.2%. SSE Composite eased0.3%. Shenwan’s Iron and Steel Index dipped 1.3%. ChinaEverbright’s New Material Index only lowered by 0.1%, beatingCSI 300 by 1.1 ppts, while China Everbright’s Bulk CommodityE-commerce Index gained 0.2%, outstripping CSI 300 by 1 ppt.
金屬板材展-線材展-金屬加工展-2017第十八屆廣州國際金屬板材、棒材、線材及金屬加工、配套設備展—全球三大金屬展之一巨浪展覽-THE 18th GUANGZHOU INTERNATIONALPLATEMETAL, BAR, WIRE, METAL PROCESSING & SETTING EQUIPMENT EXHIBITION
|
