【出版时间及名称】：2010年3月中国钢铁行业研究报告
        【作者】：野村证券
        【文件格式】：pdf
        【页数】：42
        【目录或简介】：
Action
We remain Bullish on the China/Taiwan steel sector and expect higher raw
materials costs to translate to higher steel prices, backed by strong investment and
a consumer boom. Maanshan remains our top BUY. We believe that the market is
over-concerned about cost pressure, which will be largely offset by price rises.
􀁡 Catalysts
Stronger-than-expected demand growth; faster steel price rises; favourable policy;
increasing inflation concerns; price movement in raw materials.
Anchor themes
Government spending on infrastructure, part of the migration of industry inland,
together with new housing supply and auto/white goods sales, are likely be the
main drivers for steel consumption in 2010F. We believe concerns regarding
slowing demand owing to tightening are overdone.
Cost increase to be largely offset by
price increase
􀁣 Higher iron raw material costs to be offset by higher steel prices
Nomura’s metals and mining team raised price assumptions for iron ore and coking
coal. We are now looking for 2010-11F iron ore contract prices to rise by 70% and
15% y-y (previous 30% and 10%), respectively, and coking coal price to go up by
71% and 18% (previous 40% and 25%) in the respective years. However, we
expect the impact to be largely offset by higher ASP (up by 10% and 40% y-y in
FY10-11F). We therefore only trimmed our FY10-11F forecast by 1% to 6%.
􀁤 Strong demand to push up steel ASP
We remain Bullish on the steel demand outlook, supported by tightening supplydemand
balance. In addition to demand from emerging markets such as China, we
also expect inventory re-stocking take place in the US and Europe on an improving
economic outlook. We therefore expect benchmark HRC (hot rolled coil) prices to
rise by an average of 28% and 9% in 2010F and 2011F, respectively.
􀁥 Consolidation to characterise the market in the Year of Tiger
Consolidation, a trend in play for the roughly the past two years, will become even
more important this year. While we do not expect consolidation among Chinese
steel producers to lead to any significant supply discipline in the near-term, unless
complicated tax and political issues are resolved, we believe there will be much
M&A activity in 2010F (though mostly on the Group/Parent level). How effective
these mergers are will depend on details of the yet-announced steel industry policy.
􀁦 Investment summary
We remain Bullish on the steel sector in Greater China. Our top pick remains
Maanshan, while Angang, BaoSteel and China Steel all remain BUYs. Price
targets are unchanged, since our price targets are based on P/BV for FY10F, and
this is largely unaffected by the minor earnings adjustments.