"New infrastructure" can drive steel demand growth directly geometry?

Compared with many worries about local government debt and investment returns driven by traditional infrastructure projects, there is a growing consensus that the government should focus on "new infrastructure" after the epidemic, which is becoming the new focus of domestic economic recovery."New infrastructure" includes seven major areas, including ultra-high voltage, new energy vehicle charging piles, 5G base station construction, big data center, artificial intelligence, industrial Internet, intercity high-speed railway and intercity rail transit."New infrastructure" to the domestic economy to promote the role is self-evident, the future steel industry can benefit from this investment hotspot geometry?

The reason why "new infrastructure" is called "new" is that it mainly serves the infrastructure of science and technology, compared with the traditional infrastructure such as "railway and highway".The comparable historical project of "new infrastructure" is the "national information highway" proposed by US President Bill Clinton in 1993, which carried out large-scale infrastructure construction in the field of information. This program had a very wide impact in the world and created the future glory of the us information economy.In the era of industrial economy, infrastructure construction is reflected in promoting the flow of physical resources and the integration of supply chain.In the era of digital economy, network equipment and facilities such as mobile communication, big data, artificial intelligence and data center facilities have become necessary and common infrastructures.

The "new infrastructure" proposed this time is broader in connotation and serves a wider range of objects.For example, 5G is for mobile communication, ultra-high voltage is for electricity, intercity high-speed railway and intercity rail transit are transportation, big data center is for the Internet, digital services, artificial intelligence, industrial Internet is a rich and diverse field.This may create a problem of having everything in it, but it also has to do with the word "new", because new things are always developing.

In 2019, relevant institutions sorted out the domestic PPP project library, and the total investment was 17.6 trillion yuan. Infrastructure construction was still the major part, with 7.1 trillion yuan accounting for 41% of the total investment.Real estate came in second with 3.4 trillion yuan, or 20 percent;"New infrastructure" is about 100 billion yuan, accounting for about 0.5% of the total.According to the statistics of the 21st century business herald, as of March 5, the list of future investment plans issued by 24 provinces and municipalities covered 22,000 projects with a total scale of 47.6 trillion yuan. The planned investment in 2020 is 8 trillion yuan, with "new infrastructure" accounting for about 10%.

During this outbreak, the digital economy has shown strong vitality, and a number of digital businesses such as cloud life, cloud office and cloud economy have become active, adding new impetus to the construction of "new infrastructure".After the epidemic on the economic driving considerations, "new infrastructure" will receive greater attention and greater investment, and placed more hopes for economic growth. 

The seven fields of "new infrastructure" are set to focus on digital economy and smart economy. The iron and steel industry as a whole will benefit from the new momentum and potential energy provided by "new infrastructure" and will evolve to a higher level. Meanwhile, it will also provide the necessary basic materials for "new infrastructure".

In order of steel strength of seven fields and steel materials, from high to low, they are intercity high-speed railway and intercity rail transit, ultra-high voltage, new energy vehicle charging pile, 5G base station, big data center, industrial Internet and artificial intelligence.

Intercity high-speed railway and intercity rail transit.According to the national railway "13th five-year plan", the operating mileage of high-speed railway is planned to be 30,000 kilometers by 2020.By 2019, the length of China's high-speed rail network will reach 35,000 kilometers, exceeding the target ahead of schedule.In 2020, China will invest 800 billion yuan in railways, and put 4,000 kilometers of new lines into operation, including 2,000 kilometers of high-speed lines. The focus will be on strengthening weak links and encrypting networks, which is basically the same as the intensity of investment in 2019.In the context of the basic formation of the national backbone network, the total length of urban rail will reach 6,730 kilometers in 2019, with an increase of 969 kilometers and an investment intensity of about 700 billion yuan.Driven by the enhanced policy of "new infrastructure", regional connectivity and encryption projects under the backbone network, namely intercity high-speed railway and intercity rail transit, will become the future construction focus.The more developed the region is, the more robust the demand will be. The follow-up regions will focus on the Yangtze river delta, the pearl river delta and the beijing-tianjin-hebei region, and the Yangtze river delta is the most important.According to the "Shanghai 2035" plan, "three 1000km" rail transit networks will be formed in the future, including urban lines, intercity lines and local lines.The 100 million yuan railway investment will consume 3.33 million tons of steel, and the 1 trillion yuan investment will drive up the demand for 33.33 million tons of steel.

Uhv.The sector is being driven largely by the state grid.It is now clear that the approval of seven uhv will be advanced in 2020.This piece of steel to pull the main manifestation is electrical steel.In 2019, the consumption of electrical steel was 9.79 million tons, up 6.6 percent year-on-year.Demand for electrical steel is expected to grow as a result of the subsequent uhv investment in the grid.

Charging piles for new energy vehicles.According to the development plan of new energy automobile industry, about 7 million charging piles will be needed in China in 2025 based on the ratio of vehicle piles to piles.The charging pile mainly includes auxiliary materials such as equipment host, cable and pillar.The cost of a 7KW charging pile is about 20,000 yuan, and the 120KW one is about 150,000 yuan. The amount of steel used for small charging piles is relatively small, and some steel used for supports will be used for large ones. 

5 g base stations.According to the China institute of information technology, China's investment in 5G network construction is expected to reach 1.2 trillion yuan by 2025.In 2020, the investment in 5G equipment will be 90.2 billion yuan, of which 45.1 billion yuan will be invested in main equipment and the rest will include auxiliary equipment such as communication tower masts.5G infrastructure is divided into two types: hongji station and micro-base station. The large outdoor tower is hongji station, which is also the focus of the current large-scale construction.The construction of hongji station consists of main equipment, power supporting equipment facilities, civil construction and so on. The steel involved is the machine room, cabinet, chassis, communication tower mast and so on. The amount of steel used for communication tower mast accounts for the majority.Microbase stations are mainly laid out in densely populated areas, with little steel.Therefore, 5G base station pulled steel consumption will not be too large.Roughly 5% of the base station investment requires steel, and an increase of about 50 billion yuan in the consumption of steel driven by 5G trillion yuan of investment.

Big data center, artificial intelligence, industrial Internet.Hardware input is mainly machine room, server, etc., compared with the other four fields directly use less steel. 

Although the amount of steel used in the seven fields varies from strength to strength, the large proportion of rail transit in the construction of new infrastructure investment will drive the consumption of steel will be very obvious.According to the list of investment projects published by guangdong province, 1,230 key construction projects with a total investment of 5.9 trillion yuan and 868 preliminary projects with an estimated total investment of 3.4 trillion yuan will be built in 2020.The new infrastructure is exactly 1 trillion yuan, accounting for 10 percent of the 9.3 trillion yuan overall investment plan.

In general, the total investment of intercity rail transit and urban rail transit is 906.9 billion yuan, accounting for 90% of the total investment. The investment scale of 90% is just in the field with high steel density, and the number of 39 projects is far more than the sum of other fields.In addition, according to the national development and reform commission, the approval of intercity and urban rail transit projects has exceeded one trillion yuan.The field is expected to be the focus of new infrastructure investment in terms of size and quantity.

Therefore, "new infrastructure" is not only an opportunity for the steel industry to improve its quality and efficiency, but also a new growth point for steel demand.