outline
The metal industry has changed from a traditional cyclical industry to a growth industry. The structural change of industry attributes stems from the substitution of green energy for petrochemical energy and the rise of new energy industry chain.
The Chinese government’s continuous promotion of the achievement of the double carbon goal and the implementation of the Glasgow Joint Declaration on strengthening climate action between China and the United States will contribute to the continuous rise of the proportion of clean energy in the global energy structure, which will boost the structural expansion of photovoltaic, wind power, UHV, energy storage, hydrogen energy, new energy vehicles and other industries, So as to promote the long-term and systematic rise in the demand for green metals and new metal materials. During the period from the 14th five year plan to 2030, the continuous implementation of new green energy infrastructure will effectively promote the overall expansion of energy metal demand such as copper, aluminum, lithium, cobalt, nickel, rare earth, magnesium, antimony, platinum, palladium and molybdenum by 20% – 50%.
The metal supply side comes from China’s continuous elimination of backward production capacity, environmental protection improvement, double limit policy and production capacity transfer since 2015, which makes the overall industry supply enter a periodic slowdown stage. The trend of capital expenditure in the upstream, middle and downstream of the industry has weakened, the dominant inventory of various metal varieties in the industry has been at the bottom of history for a long time, the capacity structure of the industry entering the supply side has been re optimized, and the proportion of recycled metal supply is expected to continue to rise.
The marginal slowdown of supply growth in the metal cycle and the deterministic expansion of demand growth in the extended cycle mean that the pricing logic of the metal industry will change from cyclical to growth. This will contribute to the long-term improvement of industry profitability and the optimization of industry valuation level, and the strengthening of growth attributes will also weaken the disturbance of liquidity factors to the pricing of the metal industry.
Risk tip: the policy implementation was not as expected, the interest rate rose sharply, the inflection point of liquidity trading appeared, the inventory increased sharply and the spot discount enlarged, and the market risk sentiment accelerated to decline.
