美國(guó)鋼鐵業(yè)2020年展望

1、Equity Research Americas | United StatesUS Steel SectorUS Steel Sector2020SteelOutlook-EAFCloneWarstoDrive MajorRebalancingofUSSupplyCurve;Fade the1QRallyasPriceDeckLoweredSteel | Sector ReviewUSHRCPriceRallytoLasttill1Q-20: Milloutagesandrestockinghavedrivenasharp recovery in HRC prices back to $57

2、0/ton from the recent low of $470/ton in October. Lead times have extended into January for HRC and scrap prices are expected to rise on tight winter supply and solid demand. The shutdown of MTs #3 Indiana Harbor blast furnace removes 1mt of sheet from the market which helps. We see US HRC prices re

3、aching $575/ton in 1Q-20 before falling in 2H-20 as BRS ramps up Phase II, JSW more fully optimizes their asset base, and imports rise (at $575/ton HRC the spot arb to global HRC = $175/ton). In 2Q-21 Steel Dynamics (3.0mt), Nucor (1.4mt), and BlueScope (0.9mt) will all ramp up brand new state of th

4、e art EAFs to win share from higher cost suppliers. We forecast $475/ton HRC in 2022; the Sheet Tsunami year.China2019DemandhasSurprisedtoUpsideYetMarginsareCollapsing: Chinese apparent demand for steel is up 8% YTD. However, HRC export margins have been negative to breakeven the past three months w

5、hile domestic margins have fallento$30/tonne, the lowest level on trailing 3mo basis since early 2017. The Platts China Steel SentimentIndexfellto8ptsinNovember(nearrecordlow)whiletheChinaSteelPMIvalue reached 41 in October, the lowest reading since it reached 37 in November 2015.Imports,BigRiver,an

6、dJSWallSupplySideRisksfor2020: Theglobalsteelmarket is in recession with certain regions such as Brazil and EU experiencing margin pressure similar to 2015/16. China and India are also now slowing and flat rolled data in the US over the past two quarters showing clear negative apparent demand growth

7、. US long productshavebeensupportedbystableprivateconstructionandsolidpublicinfrastructure growth. CS estimates US flat rolled demand for 2019 to be lowest in past six years.We estimate 20% of Total Integrated Capacity Needs to Close: AKS / MTshut3.0mt of capacity in 2019 (Ashland idled in 2015). We

8、 estimate an additional 5.0-6.0mt of capacity needs to exit the US market to allow for cumulative EAF capacity growth of10.2mt2017-2021. Importshareisalreadyathistoriclowsanddemandgrowthisweak; thussupplysiderebalancingmustcomefromhighcostproducers. WeseeHRCpricesin the$425-475/tonrangefor12monthsto

9、effectuatesupplycurveadjustment.Notethat ouranalysisexcludesJSWPhaseII,potentialBRSTexassite,andStelcorampviaexcess LEWhotmill/HamiltonBF. USflatrolledmarketisestimatednear55-60mtinsize.Best Investment Ideas: Outperform rated NUE and CMC has significant leverage to public infrastructure spending, wh

10、ich is accelerating rapidly. We also see strong tailwinds to fabrication margins during 2020 as lower rebar and 2019 contract resets both drive improvement. NUE / CMC have best medium term FCF profiles as well. Underperform rated X and AKS are most at risk from supply side rebalancing as well as sec

11、ular ROIC pressure in auto and high financial leverage. X operates 10 BFs compared to AK at 2 and MT at 6. Via BRS acquisition X is materially increasing HRC exposure and financial leverage which view as negative. STLD is rated Neutral on valuation.ResearchAnalystsCurt Woodworth, CFA212 325 5117 HYP

12、ERLINK mailto:curt.woodworth curt.woodworthJitendra Pandey212 325 3728 HYPERLINK mailto:jitendra.pandey.2 jitendra.pandey.2DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: C

13、redit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that couldPrice Outlook SummaryFigure1:CreditSuisseQuarterlyU.S.SteelPriceDeckandWorldExportPricesNew CS Deck20171Q18 2Q18 3

14、Q18 4Q1820181Q19 2Q19 3Q19e2019e1Q20e 2Q20e 3Q20e 4Q20e2020e2021e2022eFlat Rolled ProductsHot Rolled Sheet$/st621751881885795828693617570520600575550543530550500475Cold Rolled Sheet$/st8178861000995902946818770733693754720695688675695630605Hot Dipped Galv$/st88810101120111510151065930900855813875840

15、815818805820755730Plate$/st687817937962978923950843705630782667692700680685860830Long ProductsRebar$/st548639692705705685703687645610661620623607590610650650Wire Rod$/st585660785805805764795750725730750720720720720720700680Merchant Bar$/st629645720760760721745730715715726700700700700700680660Structu

16、ral Beam$/st694730830860840815840832743693777740740740740740760740Raw MaterialsBusheling Scrap$/lt346369389397385385365312275250300280285282275280270260Shredded Scrap$/lt292338370350352352330293263233280262270267260265250240Iron Ore (62% fe)$/mt5766636567657895100909185808075807065Pellet Premium$/mt

17、455858586159676856385740454550454850Prem LV HCC$/mt213229196187213206208203165150182165165165165165175175US Coking Coal$/st95100100100100100115115115115115105105105105105100100Source: Bloomberg, AMM, Credit Suisse estimatesSep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

18、Aug-20 Sep-20 Oct-20 Nov-20 Dec-20Flat Rolled ($/st)Long BeamWorld Prices ($/st)HRCUS Premium Scrap ShreddedBushelingSep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20Flat Rolled ($/st)Long BeamWorld Prices ($/st)HRCUS Premium Scrap Shredd

19、edBusheling6080909090909070707070Metal Spreads Rebar BeamSep-19 Oct-19Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20Jul-20 Aug-20 Sep-20Oct-20 Nov-20 Dec-20 294444444354354504504Source: Bloomberg, AMM, Credit Suisse estimatesLongLongValuation / New Capacity SnapshotFigure3:NewFlatRolledandL

20、ongProductCapacityGrowthinUnitedStates*CAPACITYCAPACITY-New/RestartsUS Steel US SteelJSW Steel RiverBig River Nucor BlueScopeSteel Dynamics Commercial Metals Liberty HouseProjectA B Phase I Phase IIMill Mill Micro MillMicroMillRebar Micro Mill Restart of wire rod millType LocationBOF BOF EAF EAF EAF

21、 EAF EAF EAF EAF EAF EAF EAFGranite City, Illinois Granite City, Illinois Mingo Junction, Ohio Osceola, Arkansas Osceola, Arkansas Ghent, Kentucky Delta, Ohio Southwestern USA Durant, Oklahoma MissouriFloridaS Mtpy51.60.350.350.350.75Capital ($mn) ProductFlat Rolled1900StartDateAnnouncedOct-18 HRCNo

22、v-18HRCDec-16HRC Oct-19 Nov-18 Nov-17Mar-18WireRodSummary of EAF GrowthTotalEAFFlat10.1TotalEAF1.8EAF Mingo Junction, Ohio BOF Ontario, CanadaEAF Brownsville, TexasPotential Capacity Growth (USA)StelcoRestart NewEAFFlatMillFlat*Note MT and Ternium will ramp combined hot mill capacity of 6.0 in Mexic

23、o in 2020. Source: Company data, Credit Suisse estimatesNucor Corporation Steel Dynamics, Inc.Graftech International Ltd. United States Steel Corp. Commercial Metals Co.Stelco Holdings Inc.AK Steel Holding Corp.6.3x19.2x7.7x11.6%1.9%Average2.9%2.9%2.4%1.5%2.3%0.0%0.0%5.8%-4.5%15.3%-17.4%11.6%-27.1%-

24、8.9%Nucor Corporation Steel Dynamics, Inc.Graftech International Ltd. United States Steel Corp. Commercial Metals Co.Stelco Holdings Inc.AK Steel Holding Corp.6.3x19.2x7.7x11.6%1.9%Average2.9%2.9%2.4%1.5%2.3%0.0%0.0%5.8%-4.5%15.3%-17.4%11.6%-27.1%-8.9%7.8x7.1x5.7x10.7x5.1x5.1x9.8x7.8x7.4x6.3x9.6x5.1

25、x54.1x8.0 x7.0 x5.9x5.5x6.2x6.8x6.4x5.8x9%-10%-42%-63%$8$1.00$55.92$33.35$14.13$13.79$20.94$10.80$2.71N N XAKS202120202019Div. YieldFCF Yield 2020EV/EBITDAEVMkt CapUpsideTPPriceRatingTickerSteel SectorAluminum SectorTickerRatingPriceTPUpsideMkt CapEVEV/EBITDAFCF Yield 2020Div. Yield201920202021Arcon

26、ic, Alcoa ConstelliumARNC AACSTM$30.96$20.44$14.09$36$13,404$3,793$1,935$17,785$4,774$4,3557.7x3.0 x7.0 x2.4x6.7x7.8%8.5%2.2%0.4%0.0%0.0%6.9x6.2x5.4xKaiser Aluminum Corp.KALUN$108.77$1123%$1,727$1,9298.8x7.5x5.6%2.2%Average6.6x5.8x18.2x6.0%1.3%Mining SectorTickerRatingPriceTPUpsideMkt CapEVEV/EBITDA

27、FCF Yield 2020Div. Yield201920202021Freeport-McMoRan Teck Resources LtdFirst Ltd. Turquoise Resources Cleveland-CliffsWarrior Met Coal Inc. Largo ResourcesRamaco Resources Inc.TRQ.TOLGO.TOMETCN NNR $11.66$21.12$12.58$0.62$9.82$8.25$19.90$0.91$3.40$1.60$1.40$7-6%3%158%106%9.9x3.3x6.8x3.3x3.8x2.6x-1.7

28、%-6%3%-134%-4%1.7%0.9%0.0%0.0%5.7%2.9%0.0%0.0%0.0%8.2x24.3x5.5x13.0 x4.9x9.7x2.0 x8.5x2.3x14.3x13.6x2.3x3.3x2.7x3.1x2.9x2.4x1.7x1.6x1.3xAverage8.4x6.0 x5.4x13.9%2.8%Source: Company data, Bloomberg, Credit Suisse estimatesCurrentMarket View RestockTrade OnUS HRC prices are surging higher as scrap rec

29、overs and the supply chain needs to restock material ahead of seasonal demand growth in 1Q-20. The rally in the HRC market will continue into 1Q in our view as integrated mills keep furnaces down and the removal of 1.0mt of volumefromMTIndianaHarborsupportsthemarket. However,therestockwillfadelateri

30、n1Q as supply ramps up and imports become a risk factor as prices above $550-600/ton opens the arb. While demand has been weak the critical issue in the US is supply. AISI data shows the US on pace to produce 97mt of steel in 2019, the highest level in over seven years.Imports for HRC should rise gi

31、ven only 4% of demand is now seaborne sourced. Weak demand in Europe and especially Turkey should limit US scrap exports and depress scrap prices relative to mid-cycle. BRS Phase II and JSW optimization are major supply hurdles for 2020.WeseemajornewhotmillcapacityinMexico and renewed efforts from C

32、anada to also createpressure.Figure5:Canada&MexicoFillImportVoidfromSeaborneFigure6:USHRCDemandGrowthNegativeMostof2019Canada / Mexico HRCImportShareUS HRC Demand Growth (y/y80%70%60%5%Canada & Mexico as % of Total HRC Imports50%0%Canada & Mexico as % of Total HRC Imports40%30%20%-5%-10%10%0%Jan-13J

33、an-14Jan-15Jan-16Jan-17Jan-18Jan-19-15%Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19Figure7:SpotHRCMetalSpreadsareNearLongTermMedianValuesUS$/s

34、tUS HRC METAL SPREAD ($/ST) US HRC METAL SPREAD ($/ST) 10 YR MEDIAN ($/ST)EAF Metal Spreads Below LTMeanfor17ConsecutiveChina550500450Overthepast10yearsmetalspreadhas averaged$330/tonandthuswithscrapat$220/ton, HRC below $550/ton makes sense with new cost curve clearing dynamics.400350300250200150Ja

35、n-10Jan-11Jan-12Jan-13Jan-14Jan-15Jan-16Jan-17Jan-18Jan-19Source: AMM, Bloomberg.US Flat Rolled Demand is Now inRecessionUS commercial construction is solid and the US SAAR for 2019 estimated at 17mt is a good level. Yet HRC recently traded as low as $475/ton HRC. So what gives? AISI data below show

36、s a sharp decline in US sheet demand for 2019, with total market forecast to fall 6%. Destocking has clearly impacted this figure but real demand is undeniably weak. For prices, simplyput,thecostcurveshiftedlowerfromlowerscrappricesandtheeliminationofhigher cost import and integrated supply and low

37、cost EAF capacity took its place.Figure8:StelcoDrivingCanadaCRCShareHigherFigure9:USCRCDemandhasBeenSharplyNegativeYTDCanada / Mexico CRCImportShareUS CRC Demand Growth (y/y)60%15%10%5%0%30%0%-5%-10%-15%Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18

38、 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19Feb-18 Mar-18 Apr-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Jun-19 Jul-19 Aug-19Sep-19Source: DOC.Source: AISI, DOC.Figure10:2019SheetDemandEstimatedtoDecline6%toReachLowestinPas

39、tSixYearsNewEAFConstructionPredicated onDemandGrowthandImportShareGainsLikelyOptimisticGivenLateStageofCycle/NearRecordLowImportShare 22232121222222 12121111121211 14151314151513 1415131415151325272524252524 Imports %12%16%16%13%9%11%9% %13%21%22%19%21%17%14% Y/Y Demand %1%10%-10%-2%2%0%-4%0%7% -10%

40、5%7%-3% -10%CoatedCoated OCTG 18181818181918 3311222 3454543 342133321232223232321 6742555Imports %14%20%20%19%21%18%15% %54%58%63%49%64%58%58% Y/Y Demand %0%9%-2%2%1%0%-5%-2%14% -49% -35% -10%-6%MerchantMerchant Total Sheet 24252222242424 545550525455 27292625 27292625272726 61676162646460Imports %

41、11%15%16%12%9%10%8% %13%18%19%16%16%14%12% %0%10%-13%-2%5%1%-4%1%9%-8%1%4%0%-6%Source: Company data, Credit Suisse estimates2020 Outlook First Wave of Tsunami HitsUS HRC prices should recover modestly in 1H-20 as seasonal demand recovery and some restocking drive prices back to $575-600/ton, up from

42、 the current level of $500/ton. Big RiverPhaseIIisforecasttoaggressivelyrampvolumein2H-20withverylowincrementalcosts as they leverage existing footprint. Unless the US industrial economy accelerates meaningfully, theadditional1.5mtparateofHRCsupplyintothemarketcoupledwithamoreoptimizedJSW Mingo Junc

43、tion, will likely see US HRC prices retest the $475/ton level. US Steel is likely to announce shutdown of at least two blast furnaces in 2020 (Granite City and potential at Great Lake) however, net supply reductions from integrated mills appearsunlikely. Withmuteddemandlevelsandexpectationsforloweri

44、ronoreprices,US and Turkey scrap prices are expected to remain below 10 year median values and thus allow US minimill producers to retain decent margins.Figure11:CreditSuisseHRCSupplyMapandNewCapacityScheduleMtUS HRC Supply Curve2019e2023*2023*ExpansionVolume$mm$/tonStart UpNucor1 EAF at Gallatin1.4

45、6504641H-21Steel Dynamics4.06.96.32 EAF - Greenfield3.01,8006002H-21US Steel2 BOF at Granite City2.2n/a2H-18ArcelorMittal1 BOF at Indiana Harbor(1.1)4Q-19AK SteelAshland (shutdown)(1.5)4Q-15Big RiverPhase II1.61,1006882H-21BlueScope North Star2.02.92.81 EAF1.01H-22JSW1 EAF Restart1.55003331H-19Impor

46、ts (60% Canada/Mexico) Structural Low PointStelco - Market Share Creep1 BOF - Remains idle2.010050n/aNLMKMT Calvert1.00.70.7California Steel / UPI2019e and 2023Scenarios2737332018A MerchantMarket272023e29TimelineTimelineforCapacityNew Supply 2018-1920202021New Supply 2022-23Vol Notes3.6 X, JSW I1.6

47、BRS II5.4 STLD, NUE, BlueScope?/ Potential Restarts2.0 STLC - Hamilton-5.0 Integrated5.6NewSupplyNetShutdowns*Supply based on 95% utilization on new EAFsand no change to 2019e production levelTotal SheetSupplyGrowth10.6*Based on 2.0% HRC demand CAGR 19-23 /assume imports of 3.0mt which balance mkt.S

48、upply Model Assumptions:Greenfield EAF mills operate at 75% utilization 2019 EAF output flat2023 BOF output cut by 25% (ie 60% utilization) JSW remains a wild card for 2020 in our view as the EAF and hot mill at Mingo Junction are further optimized as part of a $500mm capital investment. JSW stated

49、in late September its intention to achieve 3mt of capacity at Mingo and is currently evaluating a Phase II expansion for $250mm that would add a second EAF to the site, to leverage the full 3.0mt of the hot strip mill capacity. WhileJSWdidnotreceiveatariffexemptionforimportedslab,thereremainsthepote

50、ntial for JSW Mingo to feed slab to increase HRC tonnage into the US market. We estimate JSW Mingo has been operating only near 50-65% utilization during 2H-19.Theperiodfrom2021-2023islikelytobetitled the“EAFCloneWars”asnewminimillsenter themarketwithmoreadvancedcapabilities/ lower costs than legacy

51、assets.2021Outlook All Bets are Off in 2H-21In mid-2021, Nucor Gallatin and Steel Dynamics plants will begin to ramp. The SDI plant is unique in that despite having to electric arc furnaces, the plant will operate a single, very large caster. To optimize the caster and also to not prolong what is al

52、most inevitably going to be a significant structural oversupply condition in the US hot rolled sheet market, SDI is expected to ramp up to full 3.0mt capacity as soon as possible.TheNorthStarplantownedbyBlueScopeisalsosettoadd1.0mtofnewcapacitybyendof 2021 via a new SMS single strand thin slab caste

53、r. JSW could also fast track a second EAF atMingobyendof2021butsuchplansarestillbeingevaluatedbythecompany.How will Chess Board Look in 2023 or 2024? If the Big River ramp up will serve as any guide, the new EAFs set to enter the market will likelybeoperationallyreadytoproduceatcapacitybyearlytomid-

54、2022andweexpectat least an 18 month severe “price recession” to force a permanent rebalancing of the US steel supply curve. Thus, it stands to reason the new normal S/D picture and mid-cycle market clearing price wont be evident until 2024. T Thecompaniessettoenterthemarketwithnewplantsareclearlyban

55、kingonstronger demandlevelsandhopefullyaquickexitbyhighcostintegratedmillsasthe“writingis plastered all over the walls” per one OEM we spoke with. WewouldarguethatUSSteelsrelativeexpensiveacquisitionofBigRiverSteelisaclear markerofwhatCShastermedthe“ifyoucantbeemjoinem”dynamicsatwork.Figure12:Since2

56、013EAFProductionHasRisen9mtvsLossof2mtforBOFsMt20132014201520162017201818 vs 13United StatesAK Steel-28%ArcelorMittal12.012.612.31%US Steel-28%Total US31.129.926.425.025.926.0-16%CanadaDofasco - Mittal-42%Lake Erie WorksStelco2.02.12.2201%Algoma2.02.12.2201%Total Canada23%Total Mexico5.04.

57、34.3-16%Total North Amercia41.742.037.736.237.037.1AISI Steel Production899787869096US BOF Production US EAF Production-29% EAF63%65%65%67%68%68%Source: AISI.Evaluating the “At Risk”LandscapeData provided by AIST (American Iron Steel Technology Institute) shows operating metrics for all North Americ

58、an blast furnaces and the trends have been very clear. We would argue that smallerfurnacesandthosethatservicepredominatelyspot/energymarketsaremostlikelyto fall off the US supply curve as new EAF mills come knocking at their door.Itsalmostimpossibletopredicthowthiswillallplayoutgivenpotentialdemandc

59、yclesand/or capital investment timeline shifts. Note that in one quarter, US Steel was able to eliminate$500mm from its capital spending budget for 2020. What appears clear thus far is the minimills are not blinking but MT and AKS both shutdown blast furnaces officially in 2019.The rebalancing proce

60、ss is expected to be painfulasintegratedmillswillnotfadequietly into the background and as was evident in 2015-16cansurviveforperiodsoftimeina$400/ton HRC environment.Figure13:SummaryofUnitedStatesBlastFurnaceProductionbyCompanyBOF production (mt)201320142015201620172018United StatesBFAK SteelAshlan