External metal commodities: (1) economic operation continued to improve: during the Spring Festival (January 28-February 4), overseas economies continued to repair after the epidemic. In January, 467000 non-agricultural employment in the United States increased, better than the expected increase of 125000; Affected by the favorable economy and the hawkish attitude of the Federal Reserve, the ten-year US bond interest rate increased by 15bp to 1.93% from 1.78%, and the US dollar index fell under pressure by 1.87 to 95.34. (2) The overall price of external metal showed strong resilience. The recent monthly contract of London futures exchange was US $9875 / ton for copper (+ 3.99%), US $3087 / ton for aluminum (+ 0.88%), US $22920 / ton for nickel (+ 3.34%), US $3615 / ton for zinc (- 0.14%), US $2210.5 / ton for lead (- 1.76%) and US $43100 / ton for tin (+ 3.36%). (3) In terms of inventory, except for LME tin, the external disk showed a trend of destocking, and the logic of low inventory price support continued.
In terms of overseas non-ferrous sector: (1) in terms of Hong Kong non-ferrous sector, under the background of global QE exit, the “oasis” effect of RMB assets is prominent. In addition to solid metal commodity prices and better than expected production and operation performance, Hong Kong non-ferrous sector recorded an increase in almost all sectors, including Ganfeng Lithium Co.Ltd(002460) (+ 5.7%), China Molybdenum Co.Ltd(603993) (+ 5.6%), Jinchuan International (+ 4.5%), China Hongqiao (+ 3.9%) Aluminum Corporation Of China Limited(601600) (+ 3.7%) led the increase. (2) In the overseas market, the metal mining sector also performed well, with Alcoa (+ 11.9%), Aluminum Corporation Of China Limited(601600) (+ 7.5%), Vale (+ 6.2%), Barrick gold (+ 3.4%) and BHP Billiton (+ 3.1%) leading the gains.
In terms of overseas lithium sector: during the Spring Festival, the target of overseas & Hong Kong lithium sector generally rose, Ganfeng Lithium Co.Ltd(002460) H shares rose by 5.7%, and avz and Piemonte lithium rose by more than 10%. (1) Under the influence of the outbreak of the epidemic & labor shortage, the lithium production in Australia is generally lower than the market expectation. Due to the delayed commissioning of the improvement project and labor shortage in the industry, the Q4 output of Pilbara decreased by 2.7%, and the Q4 output of Marion under mineral resources decreased by 3% due to the impact of the epidemic. (2) Under the high boom of the industry, the financing construction process of green space projects has generally accelerated. Piedmontlithium announced the development plan for 2022; Huayou’s acquisition of Arcadia project under Prospect resources will be further promoted. PSC will hold a shareholders’ meeting on February 25 to vote on the transaction. It is expected to complete the transaction from the end of the first quarter to the beginning of the second quarter of 2022.
Lithium sector: during the Spring Festival, the external lithium sector performed strongly, looking forward to the opening performance of A-Shares after the festival. The process of global electrification is accelerating, while the production capacity of ores and salt lakes outside China is concentrated and the spot supply is limited, resulting in labor shortage due to the superposition of overseas epidemics. The lithium mine supply in Australia is lower than expected, the supply and demand structure continues to be tight, the lithium resource premium increases, the lithium salt price is expected to remain high, and the profits of the production chain will continue to be transferred to the upstream. It is prudent to assume that the average tax price of lithium salt in 22 years is 250000 yuan / ton (currently close to 400000 yuan / ton), and the average PE of the sector in 22 years is expected to fall back to the undervalued level of about 20x. The high-quality target with the advantage of resource end guarantee and supply & rapid and large capacity is expected to continue to lead the industry. It is suggested to pay attention to: Tibet Mineral Development Co.Ltd(000762) , Ganfeng Lithium Co.Ltd(002460) , Tianqi Lithium Corporation(002466) , Qinghai Salt Lake Industry Co.Ltd(000792) .
Copper sector: weak US dollar & low inventory supports the strong resilience of copper price. LME copper rose 3.99% to US $9875 / ton this week as Fed officials poured cold water on investors who were enthusiastic about radical interest rate hikes, easing concerns about a major blow to economic growth and adding to the weakening US dollar. Despite the significant slowdown in downstream construction during China’s Spring Festival holiday, LME inventory still recorded a sharp decline, which is the most beneficial factor for fundamentals. On the whole, copper is still one of the metal varieties with the most smooth logic of low inventory. After the festival, on the one hand, we should pay attention to the interference of the US interest rate hike on copper prices. In addition, the driving effect of infrastructure, power grid and other sectors on copper consumption in spring is also particularly critical. It is suggested to pay attention to: Zijin Mining Group Company Limited(601899) , China Molybdenum Co.Ltd(603993) , Jchx Mining Management Co.Ltd(603979) , China’s nonferrous mining industry.
Aluminum sector: the Winter Olympics & environmental protection inspection restricts the resumption of production progress, and the low inventory supports the strong performance of aluminum price. The resumption of electrolytic aluminum production stalled during the Spring Festival. The Winter Olympic Games and environmental protection inspection are still the factors restricting the resumption of electrolytic aluminum production. Overseas, Russia and Ukraine temporarily cease fire after the Paris talks, but the European energy crisis has not been alleviated. With the continuous rise of natural gas and electricity prices, the scale of production reduction may be further expanded, and the rate of overseas inventory removal may be accelerated. The current LME inventory level has fallen below 800000 tons, the lowest level since 2007, which is in line with our pre holiday weekly report’s judgment that “there is a possibility of continuous reduction of global apparent inventory during the Spring Festival”. Under the situation of low inventory and weak supply, if the inventory falls again in the first quarter, the aluminum price may rise strongly again. We still need to pay attention to the possibility that energy transformation and the mismatch between new demand brought by carbon neutralization and upstream supply will continue to drive up prices. It is suggested to pay attention to: Henan Mingtai Al.Industrial Co.Ltd(601677) , Shandong Nanshan Aluminium Co.Ltd(600219) , Sunstone Development Co.Ltd(603612) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Tianshan Aluminum Group Co.Ltd(002532) , Aluminum Corporation Of China Limited(601600) , Yunnan Aluminium Co.Ltd(000807) .
Risk tips: the global economic recovery is less than expected, the global epidemic development is more than expected, political risks, etc.
