Now almost all the economic data shows that China's economy has bottomed out signs of recovery, experienced the Second to the stock after the iron and steel production industries, is also the second bottom steel, iron and steel stocks overall remain low valuation.
Steel demand in early现曙光
The World Bank released its latest report that China's economy is expected to begin to recover this year, bottom in the middle of this year, and a full recovery in 2010.
First look at the macroeconomic data, January and February total fixed asset investment grew 26.2 percent year-on-year growth rate to continue to maintain a high level of investment shows the effect of 4 trillion has been initially apparent.
Another leading indicator of macroeconomic business degrees PMI has been rebound in March, and March PMI index for the 52.4 points, had 50 points on the boundary points above show that the economy has entered a phase of expansion. PMI new orders at the same time also for 2 months in the top 50 shows that enterprises operating rate has returned to normal.
Dongguan Securities analyst Liu Zhuo-ping industry believes that the apparent demand for the restoration of the lower reaches will be driving the demand for steel. Real estate sales during the first quarter "a rebound", the first three months of the national year-on-year sales growth of 8.22 percent, is the first time since the 2008 year-on-year rise in sales in March in which the ring than the increase of 20.9%. Although the inventory of real estate sales are still mainly digestive, but with the sustained pick-up in sales, real estate will increase capacity utilization, investment and new growth area will start to support the formation of iron and steel demand.
March auto industry sales growth 5.55%, the output reached 1.0954 million, has become the world's largest market. The first quarter of motor vehicle production reached 2,567,600, an increase of 3.88 percent, car sales growth in the automotive sheet metal, galvanized steel plates and steel bearing species brought about by the growth of demand, but also conducive to the stability of these species of iron and steel prices.
Machinery industry also emerged in February rebounded sharply, LIU Zhuo-ping that in the wake of the progressive economic incentives to implement, machinery industry will be able to maintain stable growth, the large-scale machinery and equipment production steady growth in steel demand to a certain degree of support, especially for container plate, boiler plate, special steel profiles and other species.
LIU Zhuo-ping believes that steel construction industry accounts for about 50% of the total, with 4 trillion of investment in infrastructure in the second quarter driven release, together with the machinery industry's demand for steel products to about 25%, the steel four现曙光quarter has been the revival of demand.
Bottom steel prices expected to rebound
Demand is driven, steel prices have also followed the second to the process of inventory of the bottom again, steel prices may have dropped to the point of which is a record low.
At present, steel is still slightly盘跌, the trend is still in the second bottom. I April 17 steel net steel index fell to 119.9 points, but the ring than the decline slowed down, pileare prices this week there was a marked pick-up. Bank of the securities industry analyst Xu Minle that the current market price of the factory and again close to the cost of steel, domestic producers to cut production in order to gradually allow the market to go back and re-balance at the end of the fragile state.
Xu Minle that, despite the rebound in steel prices has not yet started, the current steel prices can not be or have been in a stage or in the second quarter rebound in steel prices can still look forward to bottom. Pick-up in demand is one of the points, followed by the secondary steel industry once again into a bottom so that a comprehensive loss of status.
The first quarter of the entire amount of the loss may reach 60 billion yuan, a large-scale production of steel prices is inevitable once again, reduce output to ease supply under pressure, product inventory will be down, the last iron ore negotiations will gradually become clear worries the costs of steel prices lifted, the demand will be driven by the wishes of price increase in domestic large steel mills are expected to receive an increase in June may be the ex-factory price.
Joint metal analyst Zhang Ping told reporters, after last year's fourth quarter and first quarter of this year two of production to stocks, the high consumption of raw materials has been basically completed, and the majority of the company annual report has a lot of inventory provision for decline in value of preparation, in the downstream needs improvement, as well as the demand for the second quarter of the coming season, the profitability of steel companies is expected to pick-up in the bottom.
The valuation of shares the opportunity to appear hollow steel
This year, steel stocks has lagged far behind the trend in the market, but the fundamentals in the industry the second quarter is expected to improve the circumstances, the valuation is now the same steel plate at the end of history.
CITIC Securities analyst Zhou by industry that, from the valuation perspective, as a result of the early iron and steel stocks or not, the current industry average is still 1.45 times市净率still at the bottom of the region in history, and the A-share market is only half of the relative valuation . One of the leading advantages of the company's valuation市净率larger, Baosteel Group, Anshan Iron and Steel Company市净率are 1.14 times the current, at a historic low levels;市净率Magang 1.11 times.
Gold company in the recent research report, based on steel prices bottomed out, with the future demand is expected to pick up and pick-up, distribution of iron and steel stocks advanced. Front-line unit may be concerned about the Wuhan Iron and Steel Iron and Steel and Angang shares stake in second-line stocks to focus on iron and steel Hongxing and凌钢股份such JISCO.