Copper aluminum, cobalt lithium and precious metal sectors are recommended. This week (02.21-02.25), the Shanghai Composite Index fell 1.13%, the CSI 300 index fell 1.67%, the SW nonferrous index rose 2.13%, Comex gold fell 1.09% and silver fell 1.14%. Among the prices of major industrial metals, LME aluminum, copper, zinc, lead, nickel and tin changed by 2.33%, – 0.24%, 0.79%, 1.17%, – 1.10% and 0.29% respectively; LME aluminum, copper, zinc, lead, nickel and tin in major industrial metal inventories changed by – 3.08%, 1.08%, 2.28%, 5.94%, 3.89% and 4.85% respectively.
Industrial metals: China’s steady growth, combined with the impact of foreign geopolitical crisis, industrial metals fluctuated upward.
Core view: under the background of China’s steady growth, we should continue to be optimistic about industrial metal prices, and pay attention to the impact of the situation in Russia and Ukraine on metal prices. Aluminum: the resumption of work and production at the supply side has been steadily promoted, and the overall operating capacity has increased steadily; After the Winter Olympics, the downstream operating rate rises, the growth rate of aluminum ingot social inventory accumulation slows down, and the inventory inflection point may appear; The short-term decline in coal prices has put pressure on aluminum prices, but the Russian Ukrainian crisis has not been lifted, European energy prices have risen, overseas supply is tight, and aluminum prices will fluctuate at a high level. Copper: this week, the resumption of production of China’s downstream enterprises was relatively slow, the recovery process of consumption was slow, and the market inventory increased; The continued geopolitical tension abroad may disturb the copper supply side and support the upward trend of copper prices. Focus on: Zijin Mining Group Company Limited(601899) , China Molybdenum Co.Ltd(603993) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Yunnan Aluminium Co.Ltd(000807) , Shandong Nanshan Aluminium Co.Ltd(600219) , Sunstone Development Co.Ltd(603612) , Ye Chiu Metal Recycling (China) Ltd(601388) , Yunnan Tin Co.Ltd(000960) , etc.
New energy metals: limited supply and strong demand support the rise of lithium and cobalt prices. Core view: in January 2022, 313000 new energy passenger vehicles were insured, with a significant year-on-year increase of 114%. The downstream demand is strong, but the supply of raw materials is tight, and the metal price will continue to rise. Cobalt: affected by logistics, China’s Cobalt raw materials continue to be in short supply, electrolytic cobalt inventory is generally low, and the demand expectation in consumer areas such as new energy vehicles is optimistic, which promotes the upward trend of cobalt price.
Lithium: the supply of lithium raw materials is tight, the maintenance of lithium salt manufacturers is not over, the supply is reduced, the price of lithium salt is high, and the upstream and downstream game is heating up; However, the demand for batteries and downstream will be strong in the future, and the price of lithium will remain high. 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: the situation in Russia and Ukraine has a strong impact on the precious metal market and the price fluctuates sharply. Core view:
Under the conflict between Russia and Ukraine, market risk aversion supported metal prices. Although the Fed’s expectation of raising interest rates is expected to put pressure on gold prices, there is still room for upward prices. With the opening of the Russian Ukrainian war and the intensification of risk aversion in the market, the price of gold once rose to a high of $191090/oz, although it was under pressure and callback due to the expectation of interest rate increase by the Federal Reserve near the weekend; However, the geopolitical crisis has not been lifted. Meanwhile, the medium and long-term US inflation continues to rise, the real interest rate is at an all-time low, and there is still room for gold to rise. Focus on: Chifeng Jilong Gold Mining Co.Ltd(600988) , Yintai Gold Co.Ltd(000975) , gold mining industry and Shandong Gold Mining Co.Ltd(600547) .
Risk tips: the recovery of demand is less than expected, the release of supply is more than expected, the increase of policy uncertainty and geopolitical risks.
