Category: Money tips Release Date: 2007-05-21
Investment Points
Stainless steel price increases this year, particularly February 12 the company raised prices and hot rolled stainless steel sheet prices, were up 800 yuan / ton and 200 yuan / ton, the high profitability of the company.
2006 World steel consumption increased by 14%, while the historical growth rate of 6% in general, China's stainless steel production increased 60%, Europe, the Americas are all growing more than 10%.
2006 apparent consumption of stainless steel in China grew by 14%, the steel consumption growth over the same period was 1.5 times that of stainless steel export 900 thousand tons, accounting for 18% of current production of stainless steel, an increase of 122%. But China remains a net importer of stainless steel, imports of domestic consumption accounted for more than 40%. Adjustment of export tax rebate policy has little effect on the TISCO.
Of stainless steel consumption due to the diversification and consumption in China has entered a period of rapid growth in consumption of stainless steel. As income levels increase, China's stainless steel consumption room is great. TISCO far-sighted investment in the new one just to meet peak consumption of stainless steel.
With the commissioning of new projects and up to production, TISCO stainless steel into the performance of fast-growing channel. Performance of the company in 2006 is expected to 0.90 yuan in 2007, 1.63 yuan in 2008, 2.09 yuan. Earnings per share in 2006 compared with 2005 growth of 50%. Is expected in the next 2 ~ 3 years performance of the company to maintain more than 50% growth.
According to projected profitability of existing products and new projects are all to benefit, the company earnings per share will exceed 3 RMB. Taiyuan Iron and Steel Group's Plans for 2007 sales revenue 80 billion yuan, profit 6 billion yuan.
We maintain the company a "buy" investment rating, price of 25 yuan to maintain the company's goals. There are currently 50% or more.
Taiyuan Iron and Steel Price Adjustment in February
Hot-rolled plates which rose 200 yuan / ton
TISCO on February 12 order issued in March prices of hot rolled, and its "TISCO January 24 order issued in February panel products pricing policy," based on the 1549 unit price increases 150-240 yuan / ton, the current Q2353. 0mm thermal volume ex-factory price of 3670 yuan / ton, 5.5mm hot-volume ex-factory price of 3530 yuan / ton; 2250 units in 1549 based on the unit is less than the width of 1100mm increase 400 yuan / ton, less than 1250mm increase 60 yuan / ton greater than 1800mm increase 50 yuan / ton.
Stainless steel was up 800 yuan / ton
The stainless steel prices was in December last year to the current steel market prices in 2000 ~ 3000 yuan / ton, after a price adjustment, the current TISCO 1.0mm304 cold-rolled stainless steel prices reached 37.5 thousand yuan.
Stainless steel prices rise high
By the rising costs driven, stainless steel prices are rising. February 13, TISCO, Baosteel and other enterprises of the stainless steel prices rising, the rate of increase of 800 yuan / ton to meet the strong demand for stainless steel and respond to rising nickel prices. Over the past are worried about the shrinking of consumption of stainless steel price situation is not happening. And the international steel market, demand is very strong, the development of China's stainless steel to create a favorable external conditions.
The Taiyuan Iron and Steel product prices will benefit the company's profitable growth. It can be resolved for the stainless steel in nickel prices caused by rising cost pressures.
World stainless steel rapid growth - Europe and the United States more than 10% of
Global stainless steel increased by more than 14%
2006 Global stainless crude steel production reached 27.8 million tons, up 14%, usually annual growth is 5%. Which the European stainless steel production increased by 12%; the U.S. stainless steel production from 2005 of 220 million tons to 2.55 million tons. Stainless steel increased by 15% in Asia, especially China stainless steel production reached 5 million tons, is the world's increase in production than any other country. South Korea and China Taiwan have no growth. The Japanese market due to strong market demand for an increase of 2.7%.
A sharp increase in nickel prices, driven by sharp rise in steel prices, but also no signs of weakness in steel prices, most recently in Europe, the Americas continued to show rising trend of stainless steel prices. Times of high nickel prices, stainless steel, stainless steel high-consumption is driving the growth of important reasons.
China has become the world's largest stainless steel producing and consuming countries
Chinese stainless steel production increased by 68%
Stainless Steel Association, according to statistics, in 2006 China's crude steel production reached 5.3 million tons, an increase of 2.14 million tons, an increase of 68%, ranking first in the world. Cr-Ni steel (300 Series) 3.304 million tons, accounting for the total output of 62.36%; Cr steel (400 Series) 1.185 million tons, accounting for the total output of 22.34%; Cr-Mn steel (200 Series) 81.1 million tons, accounting for the total Yield 15.3%; absolute volume grew by 6 million tons year on year the proportion has dropped 8 percentage points.
State-controlled enterprises produced 2.876 million tons, an increase of 962,000 tons, an increase of 50%; joint venture production of 17. Million tonnes, increase of 17.2 million tons; private enterprises to produce 2.252 million tons, an increase 81% increase of 1.006 million tons.
Domestic steel, 4.508 million tons of crude steel to form more than last year 1.84 million tons, an increase of 69.17%. One plate 3.476 million tons, 685,000 tons long products, seamless pipe 316,000 tons, the other 31,000 tons.
Chinese stainless steel exports increased by 122%
In 2006, China imported 2.501 million tons of stainless steel, down 20.13%; exported 904,000 tons, an increase of 122.64%. Domestic stainless steel to meet the domestic market, further increase the degree of self-sufficiency rate of 60% over last year increased by 10 percentage points. Cold-rolled wide plate self-sufficiency rate of 85%, 14 percentage points higher than last year.
But we should see that our country is still a net importer of stainless steel, and steel imports in domestic consumption in China accounted for more than 40%.
Per capita consumption of stainless steel up to international standards
China's apparent consumption of stainless steel in 2006 the amount of 5.95 million tons more than last year increased by 73 million tons, up 14%.
Stainless steel per capita consumption reached 4.6 kilograms or more, out of the Third World, more than the United Kingdom.
China Stainless Steel with international comparative advantage in
In recent years, the rapid development of the domestic stainless steel production capacity. Particular, since 2005, the domestic hot-rolled stainless steel with an annual capacity of 100,000 t and above-scale enterprises total production capacity of new production capacity 10 million t, accounting for one-third of the global stainless steel production capacity, production accounted for 20% of the world.
Chinese stainless steel production and consumption of rapid growth, will fundamentally change the pattern of the world's stainless steel industry. We believe that China will increase its stainless steel production capacity will not impact on stainless steel market. The main reason is:
Stainless steel consumption of China and the world has entered a new long-term consumption of the peak
Since the world's consumption of stainless steel consumption is twice the rate in 2006, is the world's steel output growth to reach 14%. Meanwhile, China's steel consumption growth as the world's big, with the economic level of increased stainless steel consumption will continue to grow rapidly. Although since 2000 the average annual growth in consumption of stainless steel more than 50%, as China's stainless steel consumption of the base increases, the growth rate declined, but an annual increase of steel consumption in China is expected to reach 100 to 200 million tons. And as China's stainless steel to improve international competitiveness, China's steel exports, as well as directly with machinery and metal products exports, indirect exports, both for the Chinese steel enterprises to provide a favorable market space. TISCO Stainless Steel plans to export volume is expected to double compared with 2006.
China Stainless Steel cost competitive
Along with pioneering the field of stainless steel consumption, and raising the level of equipment and technology, to enhance the competitiveness of enterprises in China of stainless steel to provide the conditions on the one hand, TISCO, Baosteel's stainless steel production equipment is a new kind of improved equipment, with technical level advanced; the other hand, the investment cost of production equipment from 20 years ago, the construction of the whole process from steelmaking to the cold-rolled stainless steel business is about 2000 U.S. dollars / t capacity, down to about 1000 U.S. dollars / t capacity can be that TISCO, Baosteel of similar new equipment, the cost of investment is less than 20 years ago, the cost of similar enterprises to invest as much as 50%. This is to improve the cost competitiveness of the domestic stainless steel provides the objective conditions.
Coupled with China with comprehensive resources, and developing countries of human, management and other cost advantages, TISCO commissioning of new projects will be able to produce cost-effective products, in product quality and cost with international competitiveness.
China is the world's largest stainless steel market
With the continuous economic development and people's living standards, China's stainless steel consumption to grow rapidly. Currently, China's stainless steel consumption accounting for about a quarter of the world's stainless steel consumption. Close to the market from industry to serve the market start, China is developing a strong competitive advantage of stainless steel, one of the countries and regions.
The export tax rebate policy adjustment on the stainless steel is less
Recently been subjected to China's foreign trade surplus is too large, as well as the impact of increased foreign trade friction, reduce China's steel export tax rebate rate of a loud voice, as a pre-policy adjustments, last year China has steel export tax rebate rate from 11% to 8%, billet not only abolished the export tax rebate was also imposed 10% tariff, but we believe that lower Chinese steel export tax rebate is a general trend, but the steel export tax rebate to reduce the possibility of a small small, mainly because China's consumption of stainless steel in 40% from abroad , the domestic stainless steel production enterprise is import substitution, it should encourage Chinese steel enterprises. And producers of stainless steel raw materials required for nickel and chromium are mainly imported from abroad, more of China's steel enterprises and processing enterprises.
Future
With the use of the continuous development of stainless steel, stainless steel, purpose and use of the continuous expansion of machinery industry in the future, automobiles, locomotives, light rail, shipbuilding, energy, petrochemical and power industry sectors, consumer appliances, IT, communications, consumer electronics industries, as well as traditional construction and other industries for the consumption of stainless steel has provided a broad space for.
Taiyuan Iron and Steel in 2006 through targeted acquisition of additional assets of the Group, of which 1.5 million tons of stainless steel construction in September 2006 was put into production, which marks the TISCO to become the world's largest stainless steel producer. TISCO new projects on stream, will allow the company achieved economies of scale, comprehensive access to the international industrial chain, to become an international stainless steel company leading enterprises.
The company has strong strategic planning capacity, from the reserves of land, large-scale investment to purchase the world's most advanced large-scale stainless steel production equipment, these far-sighted investment in the new one just to meet peak consumption of stainless steel. We believe that with the commissioning of new projects and up to production, the company's continued growth in profitability will be in the channel. Performance growth in 2006 is mainly due to acquisition of the company's overall listing of the Group of assets, 2007 and 2008 will be the company's new projects are put into production, and up to the effectiveness of the golden age.
According to the company to disclose information, the project put into operation goes smoothly, the product yield and product quality continues to increase.
In 2006 the company achieved sales income of 51.8 billion, profit 4.5 billion. The main products of its millions of tons of steel annually mark a breakthrough, reaching 1.11 million tons, exports more than 200,000 tons. This marks the Taiyuan Iron and Steel Group has become the world's largest production capacity, process technology and equipment of the most advanced stainless steel business.
Taiyuan Iron and Steel Group plans to be completed in 2007 sales of 80 billion yuan, profit of 6 billion yuan. Sales and profit growth significantly higher than in 2006.
According to the profitability of existing products, our preliminary calculations, the company put into operation the new projects are all put into production, the company is expected to more than 100 billion yuan in sales and profits would surpass 100 billion, earnings per share are expected to exceed 3 yuan / share.
New projects will be gradually put into operation, and up to capacity development of the company has provided a new growth engine.
China's ratio of 22% chromium stainless steel, while the Taiyuan Iron and chromium stainless steel is higher than the national average by half, while the chromium stainless steel at a high level of profitability of its tons of steel.
TISCO since 2004 to increase the proportion of production of stainless steel 400 system since 2006 has maintained its stable production. 2006 TISCO full annual 1.11 million tons of stainless steel, chrome steel in which a total production of 370,000 tons, chrome steel than the accumulated 33% over the previous year an increase of 7.8%.
TISCO since the second quarter of 2004 and began work on chrome steel annealed by the ability of the middle years, in ensuring that the existing 30 normal bell-type annealing furnace annealing produced the same time, is stepping up its new stainless steel hood-type annealing furnace of intense construction works , the new 29 stainless steel hood-type annealing furnace is expected to be completed in October of this year, will further enhance the Department of Taiyuan Iron and Steel 400 stainless steel annealing ability to respond effectively to alleviate bottlenecks in chrome steel annealing effects of chromium steel production capacity to be further released.
With 1.5 million tons of new steel project put into production, and raise the degree of market recognition, TISCO will further increase the proportion of chromium stainless steel.
Moreover, from the current development trend of stainless steel, in response to high nickel prices, steel producers on the one hand should be dedicated to developing low-end product markets, to develop market demand for (low-nickel, nickel-free type), the performance but also with the 304-phase comparable to stainless steel; the other hand, vigorously develop the high-end product areas, such as the automotive-grade stainless steel and so on. At present, China is still kind of high-value-added products need to rely on imports to meet demand.
In the current situation of nickel cost remains high, the foreign steel producers to develop a series of alternative materials, such as D-7, D-11, 315J1 steel, and other new species, the domestic stainless steel producers are also conscious of the increased 400 system production ratio, thereby reducing procurement costs to meet the actual needs of the downstream consumer.
