Industrial metals: abroad, the Fed’s expectation of raising interest rates as early as or in March this year may continue to heat up. The inflation data in January “burst the table” again. The Fed said it expected to raise interest rates three times this year, but tended to raise interest rates four times. In China, the increment of social financing scale in January was 6.17 trillion yuan, 984.2 billion yuan more than the same period last year, exceeding market expectations. The steady growth policy may promote the demand for industrial metals. It is suggested to pay attention to: Zijin Mining Group Company Limited(601899) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Shandong Nanshan Aluminium Co.Ltd(600219) , Western Mining Co.Ltd(601168) , Yunnan Tin Co.Ltd(000960) .
Copper: the Fed’s expectation of raising interest rates increased, and copper prices continued to fluctuate at a high level
Copper prices fell 0.46% weekly. In the macro aspect, the US economic data performed well, and the CPI data in January reached a new high, the global inflation pattern continued, the market raised the Fed’s expectation of raising interest rates, boosted the rise of the US dollar index, and the copper price was under pressure. However, China’s social finance exceeded expectations in January, and the demand for industrial metals may continue to increase under the steady growth policy. From the perspective of fundamentals, on the supply side, according to SMM, Las bambas copper mine may stop production before February 20, 2022 due to protests and road blockade. The copper mine is the ninth largest copper mine in the world, with an annual production capacity of about 400000 tons of copper. In addition, the processing fee of copper concentrate increased in January 2022, and the TC price increased slightly from US $0.93/t to US $63.83/t in January. Under the background of stabilizing and increasing the demand for copper in the new energy market, it is expected that the demand for copper infrastructure will also increase rapidly.
Aluminum: the overseas energy crisis restricts imports. The epidemic situation in Guangxi, China affects the commencement of aluminum plants and the outward transportation of alumina, and the aluminum price is strong
At present, the overseas energy crisis is still continuing. The production capacity of European electrolytic aluminum has been reduced by more than 800000 tons, the overseas aluminum price remains high, and the spot premium of European electrolytic aluminum is 455 US dollars / ton. The import window of electrolytic aluminum continues to close, and the import volume of electrolytic aluminum in China is limited. Superimposed on the impact of the epidemic situation and environmental protection in China, the outward transportation of alumina in Guangxi is blocked, alumina enterprises in Shanxi, Shandong and Henan have reduced production to varying degrees, and the operation of electrolytic aluminum production capacity is insufficient, resulting in the slow recovery of electrolytic aluminum production capacity in China and significant support for aluminum price at the supply end. On the consumer side, the social finance data in January exceeded expectations, which is expected to improve the resilience of aluminum consumption under the steady growth policy. In the short term, China may usher in the recovery of seasonal demand after the festival, and the aluminum price is expected to be strong. On the inventory side, the import of electrolytic aluminum was lower than expected, resulting in the low level of China’s inventory. This week, the social inventory of SMM China’s electrolytic aluminum was 950000 tons, 84000 tons more than that on Monday, and the overseas LME aluminum inventory increased to 875000 tons, with a weekly increase of 12.87%. The increase was mainly concentrated in Pakistan and Singapore, or the retention of aluminum ingots due to high sea freight, or the dominance of local invisible inventory, It is difficult to alleviate the current tight supply and demand of electrolytic aluminum in China in the short term. Judging from the profit per ton of electrolytic aluminum, the profit per ton is 4611 yuan / ton.
Tin: resonance between supply and demand, strong shock of tin price
LME tin closed at US $43800 / ton, up 1.62% from last week. With the advent of the peak production season, the downstream start-up has gradually increased, and the demand is expected to rise. In addition, due to the impact of the epidemic in Guangxi, the supply of tin ore and other raw materials has been slightly weakened recently, resulting in the limited production of smelting enterprises, and the production scheduling of most refineries has not been normal. In terms of inventory, LME tin inventory is 2470 tons, with a month on month decrease of 1.01%. Under the resonance of supply and demand, tin prices are still supported.
Zinc: the inventory fell month on month, and the zinc price may continue to rise after the downstream resumption of work
LME zinc closed at US $3656 / yuan, up 1.12% from last week. Basically, the inventory of Lun zinc this week was 151900 tons, down 1.97% on a weekly basis. The high electricity price in Europe led to a reduction in production at the overseas smelting end. Although the downstream enterprises have resumed work and production one after another, the market transaction is light, mainly the outbound storage among traders, and the overall situation of weak supply and demand is maintained. At present, China’s monetary policy is loose, the real estate industry may show signs of recovery, and China’s infrastructure demand is expected to continue to drive the rise of zinc prices.
Energy metals: the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles made a good start in mid January 2022, and the demand for energy metals may continue to increase. It is suggested to pay attention to: 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) , Sinomine Resource Group Co.Ltd(002738) , Sichuan Yahua Industrial Group Co.Ltd(002497) , Suzhou Ta&A Ultra Clean Technology Co.Ltd(300390) , Chengxin Lithium Group Co.Ltd(002240) , Zhejiang Huayou Cobalt Co.Ltd(603799) , Chengtun Mining Group Co.Ltd(600711) , China Molybdenum Co.Ltd(603993) , Nanjing Hanrui Cobalt Co.Ltd(300618) etc.
Lithium: the downstream demand is strong, and the price of lithium continues to rise
Lithium prices continued to rise this week. Battery grade lithium carbonate was 392000 yuan / ton, with a weekly increase of 7.7%, and battery grade lithium hydroxide was 326500 yuan / ton, with a weekly increase of 9.4%. On the supply side, according to SMM, lithium salt manufacturers entered the shutdown and maintenance period in January 2022, and the supply decreased significantly; The new production line is still in a climbing period with limited supply increment. In that month, China’s lithium carbonate output was about 18844 tons, a month on month decrease of 8% and a year-on-year increase of 48%; The output of lithium hydroxide was about 16146 tons, with a month on month decrease of 6% and a year-on-year increase of 35%. According to the customs network, the import volume of lithium carbonate in December 2021 was 7228 tons. Due to the epidemic and the shortage of shipping capacity, the import volume in the first quarter may be lower than expected. At present, the supply side is still tight, the nationalization proposal of Chile adds uncertainty to the supply of resources, the downstream demand of new energy may continue to be large, and the lithium price still has the power to act.
Cobalt: the import of cobalt raw materials is limited, and the price of cobalt rises slightly
The price of electrolytic cobalt in China this week was 514000 yuan / ton, up 3% month on month. On the raw material side, the world’s top mines have production plans in 2022, of which Glencore’s guided output is 45000-51000 tons. However, the container problem is prominent, the pressure of maritime transport capacity is still on, and the shipping schedule of cobalt raw materials is limited. At the smelting end, during the Spring Festival, most enterprises consider planning the few raw materials in their hands for production after the year, superimposing the existing Spring Festival holiday policy, and most enterprises choose to have a holiday. According to SMM prediction, the cobalt salt output may decrease by 11% month on month in February, and the supply at the smelting end may continue to be tight. On the demand side, the ternary demand is relatively strong and is still climbing month on month. According to Rongzhi nonferrous metals, China’s ternary precursor output was 63800 tons in January 2022, an increase of 4.68% month on month. After the resumption of work in the Spring Festival, the output of some enterprises returned to the normal level, and the output may increase slightly in February. The demand for new energy vehicles may continue to increase in large quantities, the demand for 3C has increased steadily, the tension on the supply side has not been significantly improved, and the cobalt price may still be supported.
Nickel: low inventory stack strengthens demand, and nickel price may remain high
Nickel prices were strong this week, with LME nickel prices of US $23235 / ton, up 1.37% on a weekly basis. At present, the global nickel inventory is 94200 tons, which is at a historical low. The downstream is gradually started after the festival, and the demand for new energy is considerable. The demand of industries such as stainless steel and alloy is also rising steadily. Supported by fundamentals, the nickel price remains high in the short term. The high matte nickel products in Qingshan Park, Indonesia continue to be delivered during the Spring Festival and will be delivered to customers soon. At present, due to the shortage of nickel sulfate raw materials and difficult profitability of smelting enterprises, the supply pressure of ternary precursor nickel raw materials may be relieved to a certain extent after the high volume of nickel matte.
Precious metals: the situation in Russia and Ukraine is heating up again, and the price of gold has increased significantly
COMEX gold closed at $1860.6 an ounce this week, up 2.86% from last week. The US economic data performed well. According to the latest data of the US Department of Commerce, the US GDP growth rate in 2021 was 5.7%, and the non farm employment data in January exceeded market expectations. The number of initial jobless claims last week was 223000, a decrease of 16000 compared with the previous week, the third consecutive week of decline.
The Fed maintained hawkish remarks, adding that the year-on-year increase of CPI in January announced this week expanded to 7.5%, higher than market expectations, and the year-on-year increase of core CPI was 6%, both of which had the largest increase since 1982. Inflation concerns intensified, the US dollar index rose, and gold prices were under pressure. However, the situation in Russia and Ukraine warmed up again this week. Driven by risk aversion, gold prices rose significantly.
Rare earth: there is a strong demand for procurement in the market after the festival, and the price of rare earth is expected to continue to rise
After the Spring Festival, the demand for wind turbines, new energy vehicles and other terminal fields is strong, and the orders are increasing. According to SMM, the orders of magnetic materials enterprises are full. The first batch of rare earth quotas in 2022 have been announced before the festival. The orderly release of rare earth quotas may alleviate the tension between supply and demand to a certain extent. The total amount control index of rare earth quotas is relatively stable this time, and the growth rate is lower than that of last year. Among them, the index of mineral products was 100800 tons, an increase of 16800 tons over the same period last year, a year-on-year increase of + 20%, and the growth rate fell by 7.27pct year-on-year. The index of smelting separation products was 97200 tons, an increase of 16200 tons over the same period last year, a year-on-year increase of + 20%, and the growth rate fell by 7.56 PCT year-on-year. At the same time, on the premise that the downstream procurement is just needed and the upstream supply is difficult to increase, the supply and demand gap in the rare earth market expanded in the first quarter, and the prices of mainstream rare earth varieties such as praseodymium and neodymium rose after the festival. It is expected to further benefit from the increase of smelting enterprises’ profit and the increase of high price quota. It is suggested to pay attention to: China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Jl Mag Rare-Earth Co.Ltd(300748) , etc.
Risk tips:
Metal prices fluctuated sharply, the demand for new energy fell sharply, and the macroeconomic performance was lower than expected
