The central economic work conference set the tone of steady growth, and US inflation continued to reach a new high. On December 10, the central economic work conference was held to establish the main policy tone of steady growth next year, and correct the deviation of energy policy in the early stage. The goal of steady growth in 2022 requires a more active fiscal policy. When real estate suppresses credit expansion, a prudent monetary policy may be more active. In November, China’s financial data continued to hover at the bottom. The year-on-year growth rates of M2 and social finance stocks were 8.5% and 10.1% respectively, From December 6 to 7, reserve requirements and interest rates were continuously reduced (on December 6, the central bank announced that it would comprehensively cut the reserve requirement by 50 basis points from December 15, and cut the interest rate of agricultural refinancing and small refinancing by 25 basis points from December 7) or it will push the financial data upward in the next two months. We believe that under the situation that China may face the risk of falling exports and the correction of China’s real estate policy next year, the recovery of real estate sales and the increase of new infrastructure are expected to become the key to stabilize the economy We should support and drive the demand for metal commodities to return to the potential demand growth level. Overseas, concerns about the new variants of covid-19 have been greatly alleviated; The US Non seasonally adjusted CPI reached 6.8% year-on-year, a new high in 1982, but the impact of inflation expectations on metal prices in the short term has been fully priced.
Aluminum prices have risen steadily, industry profits have continued to improve, and copper supply and demand remain relatively weak. SHFE aluminum prices rose 0.6% to 18760 yuan / ton. According to wind data, the national aluminum ingot inventory continued the downward trend, and the social inventory of electrolytic aluminum decreased by 3.6% to 921000 tons. The current aluminum price continues to fluctuate around the central price of 18600 yuan / ton and is not affected by the decline in the price of raw materials. It shows that the downstream has accepted the current electrolytic aluminum price. The average profit of the electrolytic aluminum industry has quickly turned positive and maintained an upward trend since the end of November. According to our calculation, the average net profit of the current electrolytic aluminum industry is about 1146 yuan / ton. Considering that there is still no sign of relaxation at the current electrolytic aluminum supply end, the pace of removing aluminum ingot inventory from the warehouse continues, the starting rate of downstream aluminum rods and aluminum cables continues to rise, and there is still strong support for aluminum fundamentals, it is suggested to pay attention to electrolytic aluminum enterprises that benefit from the decline of raw materials and the significant recovery of profits under the background of stable aluminum price. SHFE copper fluctuated in a narrow range this week, up 0.43% to 69530 yuan / ton. The continuous reduction of reserve requirements and interest rates under the central steady growth policy formed a great support for the expectation of copper demand. The epidemic fermentation in Inner Mongolia and the Yangtze River Delta interfered with both supply and demand. On the one hand, it limited the import of copper concentrate and electrolytic copper in the north. On the other hand, the implementation of epidemic prevention policies in Zhejiang affected the demand of downstream processing plants and the expectation of copper products. However, the expectation of China’s steady growth policy, the extremely low inventory of exchanges outside China and the release of backlog demand in the early stage of China’s marginal shift of real estate policy jointly support the copper price. We believe that the arrival of the off-season has not changed the situation of low inventory in the industry, and the copper market pattern will still fluctuate around 70000 yuan / ton.
The upward trend of lithium price is definite and long-term. This week, the price of lithium carbonate in Wuxi increased by 10.39% to 255000 yuan / ton, the price of industrial carbon and electric carbon in Baichuan increased by 3.49%, 3.34% to 207500 yuan / ton, the price of lithium hydroxide maintained 202900 yuan / ton, the price of spodumene increased by 0.43% to 2315 dollars / ton, and the price of lithium accelerated in an all-round way. Affected by the power and gas restriction in Qinghai and the shutdown and maintenance of some manufacturers in Jiangxi and Sichuan, the operating rates of lithium carbonate and lithium hydroxide decreased by 2.20% and 7.44% to 50.6% and 59.3% respectively month on month; The output decreased by 2.21% and 7.42% month on month to 4294 and 4118 tons respectively. This week’s lithium hydroxide inventory increased significantly month on month. On the one hand, due to the manufacturer’s stock demand at the end of the year, on the other hand, it is mainly due to the strong market demand, and traders are reluctant to sell. However, lithium carbonate inventory continued to decline. According to the China Automobile Association, the output of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in mid November was 457000, a year-on-year increase of 131% and a month on month increase of 15%; The sales volume was 450000 vehicles, with a year-on-year increase of 125% and a month on month increase of 17%. The production and sales of new energy vehicles continued to grow faster than expected. In terms of installed capacity, the installed capacity of ternary battery reached 9.2gwh in November, with an increase of 58% and 33% respectively on the same and month on month basis; The installed capacity of lithium iron phosphate battery reached 11.6gwh, with a month on month increase of 145% and 37% respectively. The rapid increase of lithium iron phosphate installed capacity has accelerated the price rise of lithium carbonate. The lithium price has fully entered the third wave of accelerated rise stage. With the continuous warming of the peak season of new energy vehicles in the fourth quarter, the upsurge of goods preparation at the end of the year will drive the lithium price to continue to accelerate the rise. At the same time, we expect that the supply and demand of lithium resources will continue to be in short supply in 2022, and the price rise is expected to exceed 300000 yuan / ton. It is suggested to focus on undervalued enterprises with rich lithium resources reserves and benefiting from the rise of lithium price, or enterprises with marginal growth of lithium resources.
High level stability of rare earth and magnetic materials. After the metal praseodymium and neodymium rose to 1 million / ton, the supply side is still relatively tight, and manufacturers and traders are reluctant to sell; The downstream magnetic material manufacturers’ fear of high and wait-and-see mood increased, resulting in the overall stability of rare earth prices. Nd-Fe-B has a strong price under the support of cost. After two years of continuous cost oppression and “elimination”, major manufacturers gradually realize downward cost transmission through new order pricing, and the demand in high-end fields will become the support of industry growth.
Us CPI hit a new high in November, so we need to pay attention to the resolution of next week’s interest conference. SHFE gold closed at 368.5 yuan / g, basically the same as last week. SHFE silver fell 1.3% to 4697 yuan / kg, and the real yield of us 10-year Treasury bonds rose 0.12% to -0.96%; SPDR’s gold position was 982.64 tons, a decrease of nearly 1.74 tons compared with the beginning of the week, and SLV’s silver position was 17000 tons, an increase of 10000 tons compared with the beginning of the week. In the middle of the week, the price of precious metals was affected by the central bank’s increase in the foreign exchange deposit reserve ratio, the RMB plunged against the US dollar, and the US dollar’s strong precious metals fluctuated downward; Over the weekend, the annual CPI rate of the United States in November recorded 6.80%, a new high in nearly 40 years. The price of precious metals jumped and the dollar index fell. However, the record inflation data exacerbated the market expectation of raising interest rates. It is necessary to pay close attention to the resolution of the interest rate meeting next week.
Investment suggestion: in the context of the “double carbon” goal, pay attention to the historic investment opportunities of new energy and new materials, Focus on new energy metals (lithium cobalt nickel rare earth) with strong demand and weak supply pattern and new metal materials benefiting from industrial upgrading and domestic substitution. Lithium is recommended to pay attention to Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) , Yongxing Special Materials Technology Co.Ltd(002756) , Chengxin Lithium Group Co.Ltd(002240) , Jiangxi Special Electric Motor Co.Ltd(002176) ; new materials are recommended to pay attention to Guangdong Haomei New Materials Co.Ltd(002988) , Henan Liliang Diamond Co.Ltd(301071) , Guangdong Hoshion Aluminium Co.Ltd(002824) , Jiangsu Pacific Quartz Co.Ltd(603688) , Ningbo Boway Alloy Material Co.Ltd(601137) ; titanium is recommended to pay attention to Baoji Titanium Industry Co.Ltd(600456) , Sichuan Anning Iron And Titanium Co.Ltd(002978) Etc; It is suggested to pay attention to Chifeng Jilong Gold Mining Co.Ltd(600988) , Yintai Gold Co.Ltd(000975) etc. for precious metals; For industrial metals, it is recommended to pay attention to Yunnan Aluminium Co.Ltd(000807) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Western Mining Co.Ltd(601168) , Zijin Mining Group Company Limited(601899) , Lizhong Sitong Light Alloys Group Co.Ltd(300428) , Sunstone Development Co.Ltd(603612) , etc.
Risk factors: the downstream demand fell more than expected, the supply side constraint policy turned, and China’s liquidity easing was less than expected; The United States tightened liquidity more than expected; Metal prices fell sharply.
