The steel industry has reached a high level of profitability in history

Chart Graph domestic and foreign steel price trend began in May 2009, in the downstream demand, led by the international and domestic steel prices ended three consecutive months of decline in trend, began to rebound. According to the calculation of securities analysts in the capital, the total cash procurement of raw materials, sales of finished products and no inventory of steel mills, has reached a high level of history, if the production and inventory of raw materials to take into account the appreciation of the current steel industry's higher profitability.　　Based on this background, analysts optimistic about the first recovery of the long material companies, such as Army Day Steel, Tang steel shares and emerging casting pipe. For international steel prices, CRU's global steel price index rose 2.8% last week, while the myspic Composite (China steel price) index rose 1.22% last week. Last week's Myspic (China steel price) composite index was only below the year's maximum value of 3.5%.　　As infrastructure demand continues and real estate investment improves, analysts expect steel prices to enter the boom cycle in the three quarter. The rebound in the price of steel in the international market, as well as tax rebates, will reproduce China's export prices, and analysts expect China's steel exports to rise gradually. 　　Data showed that steel exports in June were 1.43 million tonnes, the highest level in nearly 3 months. Capital Securities analyst projections, completely in the spot way to purchase raw materials, sales of finished products and no stock of steel mills last week, the increase in the production of tons of iron, the current long-term profit is close to the highest level of history, sheet profit is in the historical value of slightly higher level.　　If the value of finished goods and raw material inventory is taken into consideration, the current level of profitability of the steel industry should be higher. From the breakdown of varieties, due to the long material, plate production space in the later release of differences, is expected to low supply, high demand situation will ensure the first recovery of long materials.　　It is reported that the release of long-term production will be limited by the existing capacity, the probability of large growth in the future is small, and plate follow-up will face greater supply pressure, and plate export dependence is far greater than the long material. As of Friday, the days of steel plate and the market to eliminate small profit rolling PB ratio of 0.55, compared to the historical low point of 20.35%, compared with the historical median of 10.71%. Analysts believe that the steel stocks relative to the market PB at least to return to the historical median level, bullish will take the lead in the recovery of long material companies, such as Army Day Steel, Tang steel shares and emerging casting pipe. (Jing)