Steel prices are still weak

Since last week announced a 50 billion yuan targeted increase in fundraising, Shandong Iron and Steel, once suspended for a while, resumed sharp gains this week. Its daily limit rose to a high of 2.32 yuan on Tuesday, surpassing the pre-suspension price by 17.24%. Market participants generally conclude that there has been a major positive change in the steel export policy and the prospects for the iron and steel companies have become more optimistic.

From the point of view of actual operations alone, the deep-seated business of the company is in a backward position in the industry: In the first three quarters of this year, Shandong Iron and Steel suffered a net loss of 991 million yuan again. According to Wind statistics, 42 listed steel companies have achieved profitability in the first three quarters of last year, with a profit ratio of more than 70%, a total profit of 11.276 billion yuan, and 12 loss-making steel enterprises. Shandong Steel and Chongqing Iron and Steel and Bayi Steel have become losses. The first three.

However, the company announced a fixed-term plan last weekend: It is planned to sell at a price of no less than 1.81 yuan per share, with no more than 2.762 billion shares in non-public offerings, and the total amount raised shall not exceed 5 billion yuan. The indirect controlling shareholder Shansteel Group will subscribe for not less than 10% of the additional issuance shares. The issuance of approximately 5 billion yuan in additional funds will be used to increase capital for the construction of the Rizhao Iron & Steel Boutique Base Project. Due to the large amount of fixed increase, the company seems to have a lifetime before the scene.

However, the reporter learned from Wuhan Iron and Steel Co., Ltd. [-2.20% fund research report] and Baosteel Group, respectively, that the more favorable policy expectations are the main reasons for the recent surge in the overall oscillation of the steel plate stocks. Some people believe that due to excess capacity, the Chinese steel industry has been a bear market for three consecutive years, and some government departments are developing policies to encourage export. In the past, because the price of Chinese steel was generally lower than the international price by 10% to 30%, the major Chinese companies are familiar with the Chinese policy of "based on the supply of domestic, appropriate bilateral and multilateral trade," and do not encourage exports. However, the overcapacity situation has caused a shift in the orientation of steel policies.

In addition, the reporter learned from the real estate and household electrical appliance companies in Guangdong Province that there has been a partial warm-up in both markets: During the peak season, some home appliance companies have cleared their inventory, and their raw material purchases have increased by more than 50%. The data on real estate transactions in many cities has increased significantly, and the number of new housing starts has increased. In China's steel industry, more than 40% of finished products are used in the above two industries.

In addition, the speed of approvals for various projects in the country has recently accelerated. Certain infrastructure projects, including the expansion of railways and airports, have released certain signs of “steady growth” and help boost confidence in the steel market.

The spot price of Guangzhou Iron and Steel has rebounded slightly since October, but it is basically in a state of oscillation and there has been no significant decline. My steel network, Shao Shaojuan, inferred that although the “bear market” pattern of steel prices has not changed, steel companies have the opportunity to emerge from the predicament. Steel listed companies with fixed-income and asset restructuring projects deserve investors' attention in the short-term.