全球钢铁价格和成本的挤压现在可见一斑.docx

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1、EquitiesEurope including UK SteelCarsten Riek Analyst +44-20-7568 1823Andreas Bokkenheuser Analyst +1-212-713 9516Cleve Rueckert Analyst +1-212-7134913Yong-Suk Son,CFA Analyst +82-2-3702 8804Amit Rustagi Analyst +91-22-6155 6052James Brennan-Chong Analyst +61-2-9324 3623Global Research 13 February 2

2、019UBS Global Steel Meltdown #13Global steel price-cost squeeze now visibleLast leg in the cycle? Profit warnings for FY19 now the norm not the exception The current results season revealed that steel companies globally recognise the price- cost squeeze in 1H*19 (ArcelorMittal, USX, Nucor, Voestalpi

3、ne.). In particular, those with no vertical integration have profit-warned in recent weeks. Due to iron ore supply issues (link), iron ore prices gained c$20/t, while global steel prices remained largely unchanged in January, suggesting that steel margins are getting squeezed at least until 2Q19, in

4、 our view. However, there are early signs of a silver lining for the steel industry: steel scrap prices in Turkey are on the rise, gaining $44/t year-to-date. Rising steel scrap prices are usually an early indicator of improving steel prices. We also noticed the first attempts of steel mills to rais

5、e prices, which usually stop the steel price fall. However, should steel scrap prices continue to rise post Chinese New Year, as steel companies are likely to look for alternatives to high-priced iron ore, there is a chance steel prices might rebound, even though that is not currently our base scena

6、rio.Steel margins down globally as raw materials and steel prices decoupleSteel prices (HRC) in Europe (-$5/t m/m), China (-$4/t m/m) and the US (-$20/t) continue to fall, and are now at $566/t, $536/t and $816/t, respectively. Coking coal prices went down 4% m/m to $190/t, while Iron ore prices jum

7、ped 10% m/m to $76/t in January, leading to dip in steel margins globally. Steel price differentials between the US and China remained high as steel prices in both regions continued to fall. The price differential between the EU and China also remained high at $109/t for the same reason.Inventories:

8、 On the rise in the EU and China; down in the USEU steel inventories went up 4% y/y in Dec, while shipments went down 9% y/y; pushing up the l/S ratio by 14% y/y to 3.65 months in Dec18. US inventories went down 4% y/y in Dec18; shipments remained flat, also pushing down the l/S ratio by 4% y/y to 2

9、.33 months. Traders* Inventories in China rose 7% y/y in late January 19.Recommendations of the UBS steel teamWe prefer POSCO, Tata Steel, Bluescope and Voestalpine, while we see most risk in Gerdau, USIM, SSAB and AK Steel.Figure 1: UBS steel stock preference(Q200%170%140%110%80%50%20%-10%-40%-70%-

10、100%cooor!N soEBUAa _ Go -I SA 8Vss 忠S Euwo _&SMS lssEnc一-co一 EpunNH ozs-co doos n-CQ ocoBIBI & 8sod 。8+s Upside DownsidePTBaseSource: UBSeThis report has been prepared by UBS AG London Branch. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 28. UBS does and seeks to do business with co

11、mpanies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Figure 20: USA: y/y growth

12、 rates - Jan 16-Nov 18Source: Car Association, Central Bank, WSA, Datastream, UBSFigure 21: China: y/y growth rates - Jan16-Nov18Jan-16 Jun-16 Nov-16 Apr-17 Sep-17 Feb-18 Jul-18Steel Consumption Car registrationIP ConstructionSource: Car Association, Central Bank, WSA, UBSFigure 22: China: Macro Ind

13、icators points towards robust property market, Infra FAI and autos remains weakFigure 23: China manufacturing PMI up 10bps m/m in Jan19, while Steel PMI went up 590bps m/mJan-16Apr-16 Jul-16 Oct-16 Jan-17Apr-17 Jul-17 Oct-17 Jan-18Apr-18 Jul-18 Oct-18 Jan-19 Manufacturing PMIdiffusion IndexChina Ste

14、el PMISource: CIEC, China Auto market, NBS, Bloomberg, UBSeChina Demand IndicatorNov-17Dec-17Jan-18Feb-18Mar-18Apr-18 May-18Jun-18Jul-18 Aug-18 Sep-18 Oct-18 Nov-18Dec-18Manufacturing PMI diffusion Index51.851.651.350.351.551.451.951.551.251.350.850.250.049.4Caixin Manufacturing PMI50.851.551.551.65

15、1.051.151.151.050.850.650.050.150.249.7Caixin Services PMI51.953.954.754.252.352.952.953.952.851.553.150.853.853.9China Steel PMI53.150.250.949.550.651.750.651.654.853.452.052.145.245.6China GDP estimates % change y/y6.9%6.8%7.3%6.8%7.0%7.2%7.0%6.7%6.7%6.8%6.6%6.6%6.4%6.6%Industrial Production Chang

16、e y/y6.1%6.2%7.2%6.0%7.0%6.8%6.0%6.0%6.1%5.8%5.9%5.4%5.7%Fixed asset Investment % change y/y6.3%7.2%7.9%7.1%5.9%3.9%5.7%3.0%4.3%6.1%8.1%7.8% -53.4%Infrastructure FAI % change y/y16%7%11%6%6%-1%-1%-5%-6%-2%6%4%8%Real estate Development FAI % change y/y5%5%10%11%10%10%10%13%9%9%8%9%0%PassengerVehicle

17、sales % change y/y0%0%12%-9%5%12%9%3%-5%-5%-12%-13%-16%-16%Property Starts % change y/y19%9%3%18%3%20%15%29%27%20%15%22%20%Property Sales % Change y/y5%6%4%3%-4%8%4%10%2%-4%-3%-5%1%Land Sales % change y/y43%12%-1%3%-8%14%21%32%45%16%12%8%Construction Index5%5%6%5%4%2%2%2%5%7%7%6%5%Tieri residential

18、prices,y/y1%1%0%0%-1%-1%-1%0%0%1%1%1%1%3%Tier 3 residential prices, y/y7%7%7%7%7%6%6%6%7%8%9%10%11%11%Source: NBS, UBS researchWhats priced into steel equities?Based on EBITDA/t pricing, ThyssenKrupp (401% upside), Aperam (93% upside) and ArcelorMittal (90% upside) screen favourably as they have the

19、 most upside to our long-term and normalised EBITDA/t assumptions. On the other hand, Nucor (35% downside) and Usiminas (56% downside) are least preferred.Figure 24: Implied EBITDA/t vs. Long term EBITDA/tSBUE一 Sfl 00nN Enc一 nep0 oco soEBUAa -CD Ns。84ss-isdoosnm ogssn一ISWINaGosel一1s而punAI -Els xow。l

20、u SSAII1Long term EBITDA/t ()Figure 26: Potential Upside /(downside)ImpliedEBITDA/t ()Long term EBITDA/t ()Upside/ (Downside) to LT EBITDAThyssenKrupp26130401%Aperam25093%ArcelorMittal9690%Outokumpu26583%S+B16352%Salzgitter6346%POSCO11431%Acerinox26529%voestalpine21413%Severstal13912%Hyundai Steel90

21、7%Tata Steel1064%NLMK1092%China Steel830%US Steel4137-11%JSW Steel130113-13%Bluescope steel8269-16%SSAB10285-17%CSN228186-18%Steel Dynamics145110-24%AK Steel7352-29%Gerdau7554-29%Ternium193132-32%Nucor10468-35%Usiminas10144-56%Source: UBS estimates%80%6040%20o% o-2o%,JoorlNEn 一 E 一 nep0SOEBUAQ -co N

22、s。8VSS_CD xo。 008 d患 6ZCUS 8+sFldEnxolno cu左w-0布 Eed4 ddruyu SSAqlSource: UBS estimatesUBS GobaLSteel MeKdown #13 13 February 2019Global steel valuation tableFigure 27: India, South Korea and Europe most compelling valuation wise, while LATAM is expensiveMkt Cap(USD mn)UBS PT LocalCCYStock PriceLoca

23、l CCYUBS RatingEV/EBITDA2019e 2020e 2021 eP/E 2019e 2020e 2021eP/BV 2019e2020e2021eROE (%) 2019e 2020e2021eNet Debt to EBITDA 2019e 2020e2021eEV/IC2019e 2020e 2021eROIC (%) 2019e 2020e2021eEuropeArcelorMittal22,20223.019.2Neutral4.54.14.08660.50.50.56%8%8%1.11.00.90.60.60.69% 10% 10%Salzgitter AG1,4

24、4930.523.7Neutral5.04.44.09760.40.40.34%5%6%(0.4) (0.5) (0.8)0.60.60.55%6%7%voestalpine AG5.04241.025.3Buy5.55.34.78860.70.70.610% 10% 11%2.32.11.80.90.80.89%8%9%SSAB3,32533.033.8Sell5.55.04.81212110.60.60.65%5%5%1.31.00.70.60.50.56%6%6%ThyssenKrupp10,10927.014.3Buy10.38.27.89652.41.81.327% 33% 29%2

25、.61.91.61.41.31.29% 11% 11%Klockner6998.66.2Buy8.95.24.033850.50.50.41%6%9%2.01.20.70.70.60.63%8% 11%Schmolz+Bickenbach AG5341.000.57Buy5.04.94.67660.60.50.58%9%9%2.12.22.00.80.80.78%9%9%Average42,8276.15.35.09760.50.50.57%8%8%1.61.31.10.80.80.78% 10% 10%IndiaTata Steel7,919675488Buy5.06.05.85760.80

26、.70.716% 12% 12%3.43.73.51.00.90.915% 11% 11%JSW Steel9,304290272Neutral5.96.96.591091.91.61.424% 17% 17%2.32.92.91.61.51.321% 16% 16%Average17,2225.56.56.27981.41.21.120% 14% 14%2.83.23.21.31.21.118% 14% 14%Asia ex-JP/CN/INDPOSCO18,851410,000265,500Buy4.03.73.57660.40.40.47%7%7%1.00.80.50.70.60.610

27、% 10% 10%China Steel12,72625.925.5Neutral10.2 10.18.42020211.21.21.26%6%6%3.43.23.21.31.41.16%6%6%Hyundai Steel5,85460,00050,100Buy5.95.65.38880.40.40.45%5%5%3.43.02.80.70.60.65%6%6%BlueScope Steel4,68416.8012.23Buy3.74.13.86760.90.80.714% 11% 12%(0.3) (0.7) (1.3)1.01.01.021% 18% 21%Average42,1156.1

28、5.95.31111110.70.70.77%7%7%1.91.71.40.90.90.89%9% 10%RussiaNLMK14,50324.024.2Neutral6.25.55.310992.42.32.124% 26% 25%0.30.20.12.32.32.229% 32% 33%Severstal12,86917.015.8Buy5.95.75.58884.54.24.055% 56% 55%0.70.91.13.33.02.647% 43% 39%Average27,3726.15.65.49983.43.23.038% 40% 39%0.50.50.62.82.62.437%

29、37% 36%LATAMGerdau6,77410.015.5Sell (CBE)7.56.85.7151291.01.00.97%8% 10%2.52.01.41.01.00.99% 10% 12%CSN3,6148.39.9Sell7.77.26.6141181.71.51.313% 14% 16%4.33.83.12.12.12.219% 21% 24%Ternium6,25235.031.9Neutral3.94.03.391080.90.80.711%8% 10%0.50.30.10.90.90.817% 15% 17%Usiminas3,2366.59.6Sell5.76.14.9

30、121380.80.70.77%6%8%1.31.10.60.90.80.810%9% 12%Average19,8766.15.94.9121281.11.00.99%9% 11%2.01.71.21.11.11.114% 13% 16%North AmericaAK Steel Holding Corp9372.53.0Sell6.86.14.97532.61.61.052% 38% 38%2.82.21.41.31.31.311% 14% 19%Nucor Corp19,50859.061.6Neutral6.16.34.91113111.71.51.415% 12% 14%0.0 (0

31、.4) (0.9)1.81.71.622% 20% 25%Steel Dynamics Inc8,83135.537.0Neutral5.56.86.8913141.71.51.421% 12% 11%0.20.0 (0.3)1.81.61.626% 18% 17%United States Steel Corp4,08122.022.8Neutral (CBE3.13.22.95650.80.80.717% 13% 14%0.50.4 (0.1)0.90.80.819% 17% 19%Average33,3575.66.05.21012101.61.41.318% 13% 14%0.2 (0

32、.1) (0.5)1.61.61.523% 19% 22%Global Average5.95.95.3101091.51.31.217% 15% 16%1.51.41.21.41.41.318% 17% 18%Source: UBSeFigure 28: Global valuation table continuedSource: UBS estimatesCapacity (mn t)EV/t ( /t)EBITDA/t ( /t)EV ( mn)EBITDA ( mn)Europe201920202021201920202021201920202021201920202021Thyss

33、enKrupp151,1451,1261,12611213614417,176 16,891 16,8911,682 2,047 2,165Voestalpine91,0671,0249862011982169,0728,7078,3821,711 1,685 1,834ArcelorMittal13222622622150555629,815 29,851 29,2166,663 7,268 7,383SSAB94193963747679783,6833,4863,288672691690Salzgitter74114013838291962,9602,8902,756592659693Av

34、erage654635618104112118Russia & CISNLMK1875774973812413814313,323 13,180 12,9822,186 2,424 2,519Severstal139871,0291,02916918319212,688 13,221 13,2212,167 2,349 2,464Average872889883146160167IndiaTata Steel2769670269712911712018,971 19,128 18,9953,527 3,200 3,261JSW Steel1877481279212311412713,936 1

35、4,624 14,2502,220 2,050 2,288Average735757744126116123Asia ex-JP/CN/INDPOSCO4559957454514915515526,911 25,793 24,4806,683 6,964 6,968China Steel111,6821,6841,37816516716318,869 18,889 15,4621,856 1,876 1,832Hyundai Steel2359256653810010110113,554 12,951 12,3112,279 2,316 2,318Bluescope steel58218218

36、212202002184,2234,2234,2231,132 1,026 1,120Average924911821158156159LATAMGerdau263923793605256649,9949,6599,1921,334 1,415 1,624CSN51,7391,7391,7392272402659,3019,3019,3011,213 1,286 1,417Ternium116475905471671491687,1166,4936,0211,841 1,640 1,851Usiminas104143973977265813,9293,7673,773683619765Aver

37、age798776761130128144North AmericaNucor271291251241921253,4843,3743,346509555684Steel Dynamics111,5771,4591,33425723227317,352 16,054 14,6772,832 2,554 2,998Ak Steel108477967951541161178,4737,9577,9531,540 1,162 1,167United states Steel (X)172692562568781894,5814,3604,3601,486 1,369 1,514Average7066

38、59627129112126Global Average781771742132131140Regional trends and stock preferencesEuropeDemand trends: Ells apparent steel consumption in Nov*18 went up by 9.7% y/y to 15.2m t. Among the major steel-consuming sectors, Construction grew by 2% y/y in Nov18, while Autos remained weak (-8% y/y). France

39、 (-15% y/y) and Germany (-7% y/y) saw the largest declines in auto registration during Nov19. In terms of manufacturing, IP in the EU region went down 2.2%, with Germany (- 500ps m/m) recording the highest decline in IP during Nov18.Steel price trends: Average HRC prices in Europe went down by $5/t

40、m/m to $566.5/t in Jan*19. Average rebar prices for Jan*19 went up by $6/t m/m to $636.5/t.Net trades: EU net steel imports in Nov18 totalled 0.7m t. Imports went up 19% y/y to 2.43m t, while exports went down 21% y/y to 1.7m t.Potential triggers: Steel imports safeguard measures (Feb19).Stock Recom

41、mendation: Among the EU steel stocks, we prefer ThyssenKrupp, Voestalpine and Schmolz+Bickenbach, with SSAB being the least preferred.Figure 29: Steel demand trendsSteel ConsumptionIPCarregistration ConstructionSource: Eurofer, Car Association, WSA, Central banksHRC prices $/t Rebar $/tSource: SBB, CRUFigure 31: EU steel tradeExportsImportsNetExports/(Imports)Source: EuroferFigure 32: Regional order of preference190%150%110%