Copper aluminum, cobalt lithium and precious metal sectors are recommended. This week (01.24-01.30), the Shanghai Composite Index fell 4.57%, the CSI 300 index fell 4.51%, the SW nonferrous index fell 4.53%, Comex gold fell 2.78% and silver fell 6.43%. LME prices of major industrial metals aluminum, copper, zinc, lead, nickel and tin changed by 1.24%, – 4.40%, – 0.81%, – 4.46%, – 8.20%, – 3.81% respectively; LME aluminum, copper, zinc, lead, nickel and tin in major industrial metal inventories changed by – 6.34%, – 9.67%, – 7.31%, – 1.81%, – 1.89% and 6.82% respectively.
Industrial metals: steady growth drives the rise of demand, and tight supply drives the rise of industrial metal prices. Core view: the Central Bank of China cut interest rates, made clear the credit easing policy, the US GDP data in the fourth quarter improved, and low inventories supported prices. In terms of copper, the Fed chairman was hawkish and suppressed copper prices during the week. Considering that China’s goal of stabilizing the economy boosted demand and copper inventories were at an all-time low, copper prices are expected to remain high or continue to rise. In terms of aluminum, the international energy crisis is fermenting, the output reduction of overseas aluminum plants is expected to continue, the resumption of production in some areas near the Winter Olympic Games slows down, the inventory is low and the accumulation range is small, and the aluminum price continues to rise. In terms of tin, there are still risks in the overseas supply chain, the supply of raw materials is tight, the demand is strong under steady growth, and the inventory remains low, pushing up the tin price. In terms of nickel, LME and Chinese inventories are at a low level. The Philippine government policy brings uncertainty to the supply of nickel raw materials, and the nickel price may continue to rise. Focus on: Zijin Mining Group Company Limited(601899) , China Molybdenum Co.Ltd(603993) , Shandong Nanshan Aluminium Co.Ltd(600219) , Yunnan Aluminium Co.Ltd(000807) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Sunstone Development Co.Ltd(603612) , Ye Chiu Metal Recycling (China) Ltd(601388) , Yunnan Tin Co.Ltd(000960) etc.
Energy metals: supply shrank before the holiday, and the gap between supply and demand supported the continued rise of lithium and cobalt prices. Core view: there is a strong demand for new energy vehicles. In January 2022, it is expected that the downstream orders will increase month on month, and the tight pattern of supply and demand will remain unchanged. In terms of cobalt, under the influence of the epidemic, the transportation period in Africa is prolonged, the shortage of raw material supply continues, the demand of downstream battery plants increases, and the global cobalt price runs at a high level. It is expected that the price may continue to rise under the tension of supply and demand. In terms of lithium supply, the centralized maintenance of some lithium salt plants in January led to a reduction in supply, and the logistics stagnated one after another near the Spring Festival. On the demand side, the downstream goods preparation before and after the festival is poor. It is expected that the demand for goods preparation after the festival is strong, and the price is difficult to stabilize or fall after the festival in previous years, which is expected to continue to rise. Focus on: Zhejiang Huayou Cobalt Co.Ltd(603799) , Ganfeng Lithium Co.Ltd(002460) , Tianqi Lithium Corporation(002466) , Yongxing Special Materials Technology Co.Ltd(002756) , Qinghai Salt Lake Industry Co.Ltd(000792) , Tibet Mineral Development Co.Ltd(000762) , China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) etc.
Precious metals: short-term inhibition of interest rate hikes, and there is still room for gold prices to rise under high inflation. Core view: the US CPI has reached a new high since 1982 and continues to be optimistic about the investment value of gold. The Fed meeting hinted that interest rates would be raised in March. Powell’s attitude was hawkish, raising interest rates or pushing up the US dollar to suppress the price of gold. The crisis in Ukraine promoted the rise of risk aversion or formed support for the price of gold. In the medium and long term, US inflation continues to rise, real interest rates are at historically low levels, and gold still has room to rise. Focus on: Chifeng Jilong Gold Mining Co.Ltd(600988) , Yintai Gold Co.Ltd(000975) , Zhaojin mining industry and Shandong Gold Mining Co.Ltd(600547) .
Risk warning: the recovery of demand is less than expected, the release of supply is more than expected, and the uncertainty of policy is increased.
