On May 16,the Bureau of Statistics announced the output data of steel and building materials in April 2022:crude steel output of 93 million tons,year-on-year-5.2%;Cement production of 195 million tons,-18.9%;Flat glass production of 86 million weight cases,year-on-year-1.4%.In the january-April period,China's fixed asset investment(excluding rural households)was+6.8%,and infrastructure investment+6.5%.
Cement:The impact of the epidemic appears,the price slowly downward.Cement production in April was 195 million tons(-18.9%year-on-year,with a decrease of 13.3 PPT from the previous month).The demand in April fell significantly under the impact of the epidemic.April cement average price 507 yuan/ton,sequential-5 yuan;National shipment rate 61.3%(year-on-year-25.6 PPT).Last week(5-13)the national cement price of 493 yuan/ton(+29 yuan year-on-year),the national shipment rate of 59.5%,year-on-year-23.0 PPT,thanks to effective peak dislocation,demand downward but the overall price has toughness.We think that in the short term,the follow-up busy farming,plum rain,college entrance examination and July-August high temperature weather on cement demand may have a certain impact,or lead to the rush market is not good enough,short-term pressure is still in;However,we believe that the current direction of steady growth is clear.With the gradual implementation of policies and the implementation of the effects,industry profits are expected to improve quarter by quarter.We're looking for conch cement.
Glass:The impact of the epidemic deepened in April,and demand was weak.April flat glass production year-on-year-1.4%/month-on-month-1.8%to 86 million boxes,supply decline;We believe that the epidemic has deepened its impact on the industry.Deep processing enterprises in East and North China are running at a low operating rate,and the order days are basically maintained at 11 to 13 days.This week,zhuochuang price including tax-0.45%to 2039 yuan/ton,on the one hand,the demand continues to be weak,on the other hand,three production lines resumed production last week(a total of 2100t/d),the supply slightly increased on the other hand.Therefore,factory inventory continued to accumulate(+2.2%to 62.53 million boxes),and social inventory did not significantly decrease.Looking ahead,we believe that 1)under the catalysis of real estate policy,the rebound of completion in the second half of the year is expected to drive the rebound of glass price;2)According to Zhuochuang,the current profit per ton of the industry has dropped to less than 100 yuan.Considering that the prices of soda ash and petroleum coke remain high,if the profit space of the subsequent industry is further compressed,cold repair of the old production line may be promoted to achieve supply contraction.Suggestions to pay attention to Qibin Group,South GLASS A,Xinyi glass.
Steel:"weak reality"pattern has not changed,the epidemic has slowed demand recovery.Crude steel production in April was 93 million tons,-5.2%y/Y(VS march-6.4%).Affected by the epidemic,the apparent consumption of five steel varieties in April was-15.8%year-on-year,the"weak reality"pattern of the industry has not changed,and the traditional demand for gold,silver and four peak seasons has not been realized.We think that the subsequent weather factors or restrict demand to pick up,but with steady growth step by step force and epidemic improvement,superimposed at home and abroad steel price expansion is expected to boost domestic steel exports,we are optimistic about the end of the epidemic steel demand recovery,the off-season is expected to"not weak".Focus on baosteel,Masteel,Tiangong International.
Valuation and Recommendations
Building materials sector is optimistic about Oriental Yuhong,Weixing New Material,Beixin Building Materials,China Boulder,Conch Cement,suggest to pay attention to Subert,Huaxin Cement,Jianlang Hardware,Sankeshu,Kesun Shares(not covered),Shangfeng Cement(not covered),China Lesso,Qibin Group,Southern Glass A,Xinyi glass;Iron and steel plate optimistic baosteel shares,Masteel shares,Tiangong International.
Completion demand is weaker than expected,infrastructure demand is weaker than expected,raw material prices rose more than expected.