[Key words this week]: the Russian Ukrainian crisis continues to push up the price of bulk commodities with oil as the core; The two sessions emphasized steady growth, encouraged the consumption of new energy vehicles, and continued to promote carbon neutralization and peak carbon; Sqm expects the sales volume of 140000 tons in 22 years, a year-on-year increase of + 40%; The Ministry of industry and information technology stressed that China's lithium resources are independent and controllable, and the development of China's lithium resources may be accelerated.
Market review: 1. In terms of small metals, the sales volume of overseas electric vehicles in February increased significantly month on month, and the industry boom continued to rise. The boom 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 reached production one after another, but the overall output increase was not obvious. The Ministry of industry and information technology stressed that China's lithium resources were self-contained and controllable, and battery grade lithium carbonate rose 5.6% month on month this week, The price of electric carbon has exceeded 500000; 2) In terms of rare earth, the supply and demand also remained unbalanced, and the quotation of praseodymium and neodymium oxide rose 0.5% this week. 2. China's "government work report" puts forward a growth target of about 5.5% and makes all-round efforts to stabilize growth; During the week, the conflict between Russia and Ukraine stimulated risk aversion in Europe. European and American financial sanctions against Russia and export restrictions led to a surge in bulk prices represented by energy: 1) base metals, LME, aluminum and copper increased by 13.6% and 7.5% respectively; 2) The real yield of the ten-year US Treasury bond rose from - 0.57% → - 0.93%, Comex gold closed at US $1966.6/oz, up 4.19% month on month, and sshfe gold closed at 394.64 yuan / g, up 0.82% month on month. 3. A shares fell overall this week. Shenwan nonferrous metals index closed at 584193 points, down 0.96% month on month, outperforming the Shanghai Composite Index by 0.85 percentage points. The rise and fall of industrial metals, gold, rare metals and new metal and non-metallic materials were 3.46%, - 1.55%, - 2.49% and - 4.69% respectively.
Summary of macro "three factors": China's "government work report" put forward a growth target of about 5.5%, and made further efforts to stabilize growth in an all-round way. PMI of global manufacturing industry generally rebounded in February. Specifically: 1) China's official manufacturing PMI rose in February. This week, it was disclosed that China's official manufacturing PMI in February was 50.2 (the previous value was 50.1, expected 49.8), Caixin manufacturing PMI in February was 50.4 (the previous value was 49.1), and Caixin service PMI business activity index in February was 50.2 (the previous value was 51.4). 2) In the United States, the manufacturing PMI of ISM rebounded in February, and the number of new non-agricultural employment rebounded in February. The manufacturing PMI of the United States in February was 58.6 (the previous value was 57.6), and the non manufacturing PMI in February was 56.5 (the previous value was 59.9); This week, it was disclosed that the number of ADP employees in February increased by 0.37% quarter on quarter (the previous value was 0.40%); In February, 678000 non-agricultural jobs were added (the previous value was 467000). 3) In February, the manufacturing PMI in the euro zone fell slightly and the epidemic warmed up. It was disclosed this week that the manufacturing PMI in the euro zone in February was 58.2 (the previous value was 58.7 and the expected value was 58.4), and the service industry in the euro zone in February was 55.5 (the previous value was 51.1 and the expected value was 55.8); In January, the PPI in the euro area was 30.6% year-on-year (the former value was 26.3%, the expected value was 26.9%) and 5.2% month on month (the former value was 3.0%, the expected value was 2.3%); In January, the unemployment rate in the euro zone increased by 6.8% (the previous value was 7.0%, and the expected value was 7.0%); This week, the United Kingdom, Germany and France added 3083870 cases of covid-19 on a daily basis, an increase of 220300 cases on a month on week basis, and the epidemic is heating up. 4) Overall, the global manufacturing industry recorded pmi53.2 4. Up 2.0 month on month; Here we maintain the judgment that the global economy has entered the downturn stage.
Base metals: European and American sanctions have caused energy impact, and China has strengthened all-round efforts to stabilize growth
During the week, the current conflict between Russia and Ukraine continued. At the same time, Europe and the United States opened financial sanctions against Russia, and the transportation between Russia and Europe was blocked. Many uncertainties led to the soaring price of bulk commodities led by energy. In China, the fifth session of the 13th National People's Congress was held in Beijing. In the government work report, it stressed that all-round efforts should be made to stabilize growth, "strive to stabilize the macro-economic market" and "maintain the economic operation within a reasonable range". Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by 7.5%, 13.6%, 3.7%, 12.8%, 7.4% and 20.3% respectively this week, and the price rose as a whole. (for the specific impact of the conflict between Russia and Ukraine on non-ferrous metals, please refer to our previous metal observation "how does the geographical conflict between Russia and Ukraine affect non-ferrous metals?"
1. For electrolytic copper, the overall fundamentals remain strong at home and weak at home. Overseas, the output of refined copper in Russia accounts for only 4% of the world. In the short term, it will have more impact on the transportation to Europe, and the overall shortage of overseas supply will be difficult to ease; In January, Chile's total national output fell by 7% to 42.57 million tons, raising the market's expectation of a reduction in copper supply. In China, after the return of the Spring Festival, Chinese consumption continued to improve, and downstream orders were relatively light. On Wednesday, the social inventory of electrolytic copper was 216900 tons, and the weekly cumulative inventory was 7500 tons.
2. For electrolytic aluminum, the supply side will resume production and speed up in China within a week. On the consumer side, the downstream construction of Chinalco has warmed up slightly, the regional environmental protection control in Henan and Hebei has been slightly relaxed, and some enterprises have increased production, but at the same time, the high aluminum price has restrained some downstream construction. According to the market price of real-time raw materials, the real-time cost of electrolytic aluminum this week was 17770 yuan / ton, down 0.15%, and the profit per ton of aluminum was 3770 yuan, up 13.07% month on month. This week, China's aluminum ingot inventory in eight places totaled 1.12 million tons, and the weekly cumulative inventory was 21000 tons.
3. For zinc ingots, overseas, the geopolitical problems of Russia and Ukraine led to the soaring energy prices in Europe, pushing up the production costs of European zinc smelters and dispelling the market's expectation of the short-term resumption of production of European refineries; In terms of Shanghai zinc, downstream enterprises are generally wait-and-see, Chinese consumption continues to be difficult to improve, downstream consumption shows a declining trend, and high prices further restrict China's consumption. The total inventory of zinc ingots in seven places this week was 284200 tons, and the weekly cumulative inventory was 0700 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 upward trend of industry prosperity remains unchanged. 1) The two sessions proposed to continue to encourage the consumption of new energy vehicles, and it is expected that the sales of electric vehicles in China will continue to increase; 2) The sales volume of overseas new energy vehicles increased month on month: in February, the sales volume of electric vehicles in the United States was 59468, with a month on month increase of + 11%, a year-on-year increase of 106%, and the electrification penetration rate was 5.7%. Six European countries sold 114900 vehicles in February, a year-on-year increase of 28% and a month on month increase of 6%.
2. The price of lithium carbonate has accelerated upward again, and the development of lithium resources in China may be accelerated. 1) On the price side, the price of battery grade lithium carbonate increased by 5.6%, exceeding 500000 yuan / ton, the quotation of battery grade lithium hydroxide increased by 9.7%, and the quotation of spodumene increased by 3.8%. 2) Lithium salt inventory: lithium carbonate inventory decreased by 0.97% month on month from 4947 to 4899 tons; The inventory of lithium hydroxide decreased from 773 to 741 tons, down 4.14% month on month. 3) The Ministry of industry and information technology stressed that China's lithium resources are independent and controllable, and proposed to moderately accelerate the development progress of China's lithium, nickel and other resources, improve the recycling system of power batteries, strengthen China's resource guarantee, and focus on meeting the production needs of power batteries. China's lithium raw materials are in short supply and highly dependent on foreign countries. 65% of lithium raw materials need to be imported. The development of Jiangxi lithium mica, Sichuan lithium mine and Qinghai Tibet Salt Lake in China may be accelerated.
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 2.9% and 2.9% month on month respectively; China's metal cobalt, cobalt sulfate and cobalt trioxide rose 0.6%, 3.0% and 1.6% 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. According to the Department of raw materials industry of the Ministry of industry and information technology, in view of the continuous rise and high market prices of rare earth products, the rare earth office interviewed key rare earth enterprises such as China rare earth group, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) group and Shenghe Resources Holding Co.Ltd(600392) company to promote and improve the pricing mechanism of rare earth products and jointly guide the return of product prices to rationality, We believe that: 1) at present, the investment opportunities of rare earth sector should pay more attention to "quantity" rather than "price". The return of price to rationality and avoiding large fluctuations are conducive to the sustainable growth of downstream applications. Only in this way can the high profit and high growth of rare earth enterprises be sustainable; 2) The two sessions stressed that we should continue to promote carbon neutralization and carbon peak, promote energy conservation and carbon reduction in iron and steel, nonferrous metals, petrochemical, chemical industry, building materials and other industries, and further stimulate the demand for rare earth permanent magnets. Under the current supply and demand pattern, rare earth prices do not have the risk of falling sharply, and the return of prices to rationality does not mean that rare earth prices should be reduced significantly.
5. Nickel: the situation of tungsten in Russia is tense, and the price of nickel 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 188400 yuan / ton, up 6.97% month on month. 2) On the demand side, the output of stainless steel crude steel in China in February 2022 was 2.5148 million tons, a year-on-year decrease of 63000 tons and a year-on-year growth rate of - 2%. In January 2022, China's crude stainless steel output was 2.3892 million tons, a year-on-year decrease of 379400 tons, with a year-on-year growth rate of - 13.7%. 3) On the supply side, Russia is the main nickel producer. In 2021, Russia's nickel output was 250000 tons, accounting for 9%. At present, the supply of nickel at home and abroad remains tight. With the gradual upgrading of Russia Ukraine relations, the expectation of US financial sanctions against Russia is intensified, which has a certain impact on the supply of nickel.
Investment suggestion: maintain the "overweight" rating of the industry
1. Base metals: China's economic work in 2022 is set to be "stable". It is expected that the follow-up steady growth policies will be introduced continuously to support the confidence of base metal demand. However, from a global perspective, 1) changes in the structure before, during and after the outbreak of overseas economic demand, and 2) the tightening trend of overseas liquidity remains unchanged, which still suppresses the demand for base metals. In the short term, there is no doubt that the supply uncertainty caused by the conflict between Russia and Ukraine will have a direct impact on bulk commodities, and the sector will continue to be strong before the uncertainty between Russia and Ukraine.
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 continues to be firmly optimistic.
Core marks: 1) core marks: 1) new energy vehicle industry chain: 1) new energy vehicle industry chain: 1) new energy vehicle industry chain: 1) new energy vehicle industry chain: (1) 1) that '' '''\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\, 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.
