Key investment points
[Key words this week]: the Fed minutes show that hawks are less than expected; The sales volume of electric vehicles in China in January exceeded expectations, with seasonal weakness month on month; The expansion rate of Yabao resources is lower than expected.
Market review: 1. In terms of small metals, the sales volume of electric vehicles in China increased year-on-year in January, the prosperity of the industry continued to rise, and the prosperity trend of cobalt, lithium and rare earth in the upstream of new energy vehicles was clear and continued to be optimistic: 1) enterprises that stopped production before the festival resumed production one after another, but the overall output increment was not obvious, the expansion speed of Yabao resources was lower than expected, and the price accelerated, This week, battery grade lithium carbonate increased by 15.6% month on month, and the price of electric carbon has risen to 440000-450000; 2) After the year, both alloy and magnetic materials were ready for mining, and lithium cobaltate enterprises began to replenish the warehouse. The supply of intermediate products was tight, and the price of cobalt accelerated upward. MB cobalt rose by 0.9% this week; 3) In terms of rare earth, the downstream actively inquired for orders after the festival, and the quotation of praseodymium and neodymium oxide rose 8.0% this week. 2. The year-on-year growth of China's CPI and PPI narrowed, and the growth of PPI fell to the lowest in six months. China has reduced the proportion of housing loans in many places, which has positive real estate sentiment and good demand for basic metals; The Fed did not release more hawkish signals in the FOMC meeting minutes, which was lower than market expectations: 1) base metals, LME aluminum and copper increased by 2.1% and 1.3% respectively; 2) The real yield of 10-year US bonds rose from - 0.51% → - 0.49%, and Comex gold closed at US $1899.8/oz, up 3.40% month on month. 3. A shares rebounded overall this week. Shenwan nonferrous metals index closed at 5775.50, up 5.31% month on month, outperforming the Shanghai Composite Index by 4.51 percentage points. The gains and losses of new metal and non-metallic materials, rare metals, gold and industrial metals were 6.74%, 6.29%, 4.69% and 1.64% respectively.
Macro "three factors" summary: the year-on-year growth of CPI and PPI in January in China fell; Fed minutes show "doves"; In February, the ZEW Economic Prosperity Index of the euro zone fell, and the epidemic cooled down. Specifically: 1) in China, the year-on-year increase of CPI and PPI in January fell. This week, China disclosed that the year-on-year increase of CPI in January was 0.9% (the previous value was 1.5%, the expected value was 1.07%), of which the year-on-year increase of non food CPI in the current month was 2.0% (the previous value was 2.1%); China's PPI in January was 9.1% year-on-year (the former value was 10.3%, the expected value was 9.2%), of which the non-ferrous metal mining and beneficiation industry was 11.1% year-on-year (the former value was 12.3%), and the non-ferrous metal smelting and rolling processing industry was 19.8% year-on-year (the former value was 20.0%). 2) In the United States, the quarterly adjustment of final PPI demand in January rebounded year-on-year. The quarterly adjustment of core PPI in the United States in January was 0.8% (the previous value was 0.4%) and 9.4% (the previous value was 9.3%) year-on-year; The final demand for PPI in the United States in January was 1.0% quarter on quarter (the previous value was 0.4%) and 9.8% year-on-year (the previous value was 10.0%); The total core retail sales in January were 3.75% quarter on quarter (previous value - 2.54%); In January, 117600 private residential units were started (the previous value was 120500 units); The number of initial claims for unemployment benefits disclosed this week was 248000, up 23000 month on month; The Federal Reserve released the minutes of its meeting in January. Although most policymakers believe that they support an interest rate increase as soon as possible and may accelerate the pace of policy tightening, they did not disclose the clue of whether to raise interest rates by 50 basis points in March, nor did they mention the possible time and scale of the reduction, and the wording is not as expected. 3) The euro zone ZEW Economic Prosperity Index fell in February, and the epidemic cooled down. The total assets of the European Central Bank this week were 86.52 trillion euros (the previous value was 86.30 trillion euros); In February, the euro zone ZEW Economic Prosperity Index was 48.60 (the previous value was 49.40); This week, the United Kingdom, Germany and France added 343534.4 cases of covid-19 on a daily basis, a decrease of 110713.8 cases compared with last week, and the epidemic has cooled down; Lian en, chief economist of the European Central Bank, said that on the issue of raising interest rates, the European Central Bank does not have to keep pace with the Federal Reserve, but the Federal Reserve will certainly have a significant impact on the economic situation. Under this impact, the European Central Bank will make its own decision. 4) The rhythms of various economies are different, but the decline direction of the global overall prosperity remains the same. In January, the global pmi51 4. It fell 2.9 month on month.
Base metals: the minutes of the Federal Reserve meeting were "mild", and the bullish sentiment of Chinese real estate boosted the price of base metals
During the week, the Fed did not release more hawkish signals in the FOMC meeting minutes, and market sentiment is expected to stabilize. The year-on-year growth of China's CPI and PPI narrowed, the growth of PPI fell to the lowest in six months, and the overall price of industrial products continued to fall. In addition, China has reduced the proportion of housing loans in many places, which is beneficial to the mood of real estate and the demand for basic metals. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by 1.3%, 2.1%, 1.9%, - 2.1%, 0.3% and 4.5% respectively this week.
1. For electrolytic copper, the overall supply and demand of fundamentals are weak, and the market still trades the logic of global low inventory. After the supply end of electrolytic copper in China is less than expected, it has raised concerns about the later supply and the accumulation expectation from February to march to a certain extent. On Wednesday, the social inventory of electrolytic copper was 199900 tons, and the weekly cumulative inventory was 22900 tons.
2. On the supply side of electrolytic aluminum, during the week, China's electrolytic aluminum plant mainly operated stably temporarily, the early resumption of production capacity increased steadily, the epidemic situation in Guangxi was well controlled, and the transportation of most aluminum plants resumed. On the consumer side, China's aluminum downstream processing enterprises started well during the week. Only Hebei, Shandong, Henan and other regions were delayed due to environmental protection policies and other reasons. This week, according to the market price of real-time raw materials, the real-time cost of electrolytic aluminum was 18399 yuan / ton, up 0.07% month on month, and the profit per ton of aluminum was 2868 yuan, down 4.69% month on month. This week, China's aluminum ingot inventory in eight places totaled 1039000 tons, and the weekly cumulative inventory was 90000 tons.
3. For zinc ingots, overseas, the geopolitical problems of Russia and Ukraine have led to the continuation of European energy problems, but the strong logic brought by natural gas is weakening; In terms of zinc in Shanghai, the zinc mine is tight as a whole, and the galvanizing enterprises basically resume production this week. However, considering the impact of environmental protection and the actual on-the-job situation of employees, the operating rate is generally low. This week, the total inventory of zinc ingots in seven places was 263700 tons, and the weekly cumulative inventory was 20400 tons.
Upstream lithium battery raw materials: the prosperity of the global new energy industry continues to rise, the electric vehicle market in China, the United States and Europe resonates, and the upward trend of upstream raw material prices continues to strengthen:
1. The sales volume of electric vehicles in China increased year-on-year in January: the production and sales of new energy vehicles in January reached 452 / 431000 respectively, with a year-on-year increase of 1.3 times and 1.4 times. Affected by seasonal factors, the month on month growth rate decreased by 12.6% and 18.6% respectively.
2. Lithium carbonate prices accelerated upward again. 1) On the price side, the price of battery grade lithium carbonate this week increased by 15.6% compared with last week, and the price of battery grade lithium hydroxide increased by 19.2%. Pilbara expects the long-term single price of 22q1 lithium concentrate to reach 2600-3000 US dollars / ton. 2) On the supply side, enterprises that stopped production before the festival resumed production one after another, but the overall output increment was not obvious. In January, China's lithium carbonate output was 16620 tons, with a month on month ratio of - 5.19%; In January, the output of lithium hydroxide was 16312 tons, with a month on month ratio of - 2.75%; 3) Lithium salt inventory: lithium carbonate inventory increased by 0.24% month on month from 4919 to 4931 tons; Lithium hydroxide inventory increased from 732 to 765 tons, up 4.51% month on month.
4) The expansion speed of Yabao resources is lower than expected. The output of Alb lithium salt in 2021 is 88000 tons. The company expects the sales volume to increase by 20% - 30% (105600-114400 tons) in 2022, and it is expected to reach 200000 tons in 2025, 21-25cagr is 23%, while the compound growth rate of demand side may reach 30% +.
3. With the tightening of raw materials, the price of cobalt may rise further. 1) On the price side, the quotations of MB cobalt (standard grade) and MB cobalt (alloy grade) increased by 0.9% and 0.9% month on month respectively, while China's metal cobalt and cobalt sulfate increased by 3.7% and 1.8% respectively. 2) On the demand side, alloy and magnetic materials will be available after the year, and lithium cobaltate enterprises will start to replenish the stock after the year. The demand for new energy is stable, the inventory of intermediate products remains low, the problem of shipping schedule delay still exists, and the short-term price is expected to rise further.
4. Reshaping the pattern of rare earth permanent magnet industry. 1) In the spot market, the downstream actively inquired for orders after the festival, and the quotation of praseodymium and neodymium oxide in China rose 7.96% to 1.085 million yuan / ton; In terms of medium and heavy rare earths, the prices of dysprosium oxide and terbium oxide increased by 2.6% and 7.1% respectively. 2) On the supply side, the output of praseodymium and neodymium oxide in China in January was 6052 tons, with a month on month increase of + 25.42% and a year-on-year increase of + 4.01%. 3) On the inventory side, the inventory of praseodymium and neodymium oxide increased from 3266 to 3400 tons, up 4.10% month on month.
5. Nickel: inventory is low and nickel price rises. 1) On the price side, the situation in Ukraine and Russia was tense, the market continued to destock, and the inventory of nickel raw materials in China was low. SHFE nickel closed at 176800 yuan / ton, up 1.76% month on month. 2) On the supply side, in January 2022, the actual output of ferronickel from China and Indonesia totaled 117500 tons, with a month on month increase of 6.1% and a year-on-year increase of 11.83%.
Investment suggestion: maintain the "overweight" rating of the industry
1. Base metals: China's economic work in 2022 is set to be "stable". Social finance greatly exceeded expectations in January. It is expected that the follow-up stable growth policy will be gradually introduced to support the confidence of base metal demand. However, from a global perspective, 1) changes in the structure before, during and after the epidemic of overseas economic demand, and 2) the tightening trend of overseas liquidity remains unchanged, which still suppresses the demand for base metals.
2. The upstream raw materials of new energy, such as lithium cobalt rare earth copper foil, aluminum foil and magnetic materials, are still strong in the short cycle, and the general direction of the medium and long-term three-year boom upward cycle will not change. The industrial boom is the most clear and firmly optimistic.
Core target: 1) new energy vehicle industry chain: Ganfeng Lithium Co.Ltd(002460) , Tianqi Lithium Corporation(002466) , Sinomine Resource Group Co.Ltd(002738) , Yongxing Special Materials Technology Co.Ltd(002756) , Sichuan Yahua Industrial Group Co.Ltd(002497) , Zhejiang Huayou Cobalt Co.Ltd(603799) , China Molybdenum Co.Ltd(603993) , China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Shenghe Resources Holding Co.Ltd(600392) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , Jl Mag Rare-Earth Co.Ltd(300748) , Earth-Panda Advanced Magnetic Material Co.Ltd(688077) , Jiangsu Dingsheng New Material Joint-Stock Co.Ltd(603876) , Nuode Investment Co.Ltd(600110) , Guangdong Jiayuan Technology Co.Ltd(688388) etc. 2) Base metal: Yunnan Aluminium Co.Ltd(000807) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Tianshan Aluminum Group Co.Ltd(002532) , Sunstone Development Co.Ltd(603612) , Zijin Mining Group Company Limited(601899) , Tongling Nonferrous Metals Group Co.Ltd(000630) etc. 3) Precious metals: Shandong Gold Mining Co.Ltd(600547) , Shengda Resources Co.Ltd(000603) etc.
Risk tips: macroeconomic fluctuation, import and environmental protection policy risk, gold price fluctuation risk, lower than expected risk of new energy vehicle sales, lower than expected risk of premise assumption of supply and demand calculation, etc.
