Precious metals: political conflict – “stagflation” pushed up the price of gold, and the decline of the stock market increased the enthusiasm for gold allocation. Gold: ① risk aversion: during the week, European and American countries and Russia frequently took economic and trade sanctions, which exacerbated the uncertainty of the market economy. In the middle of the week, the president of Ukraine said that he would consider making some compromises to end the war, and the prices of precious metals and crude oil fell sharply in the short term. At present, the conflict negotiation between Russia and Ukraine still faces many difficulties. The market will continue to trade the allocation value of gold under geopolitical conflicts, and the downward revision of global stock markets will further enhance the attraction of gold; ② Inflation expectations: US inflation data released this week is expected to show that CPI rose 7.9% year-on-year in February, the highest increase in nearly 40 years. Market concerns about economic “stagflation” have intensified. After the war between Russia and Ukraine raised doubts, the strong inflation data consolidated the market’s expectations for the fed to raise interest rates at its meeting on March 16. The first interest rate increase plan after the outbreak that may be announced in the United States next week is very key to the guidance of market sentiment. Gold is still one of the most effective assets to hedge the current downward pressure of global economy and potential inflation.
Base metals: lower prices stimulate downstream replenishment demand, and the global inventory of copper and aluminum resonates. (1) Copper: ① macroscopically, the US CPI rose 7.9% year-on-year in February, the highest increase in nearly 40 years, consolidating the Fed’s expectation of raising interest rates by 25bp next week; In February, China’s social finance scale was lower than expected, real estate continued to drag down China’s liquidity, and under geopolitical uncertainty, concerns about “stagflation” of the global economy intensified; ② In terms of supply, Rio Tinto’s Mongolian ot mine may affect the construction process due to its termination of all commercial relations with Russian enterprises. The mine is planned to put into operation 560000 tons in 2023, after purchasing fuel and other commodities from Russia; The current spot price of TC at the smelting end is slightly higher than the long single price of USD 65 / ton, the average sales price of sulfuric acid is around 550 yuan / ton, and the single ton profit level of the smelter is close to 1300 yuan, which is at a historically high level; ③ In terms of demand & inventory, the global copper Inventory (China social Treasury (including SHFE) + bonded + LME + Comex exchange) was 624600 tons, which was 2000 tons higher than that of last week. Among them, China’s social inventory decreased by 13300 tons and LME inventory increased by 4400 tons. After the sharp drop in copper prices this week, consumer demand was significantly released. This week, the operating rate of copper rods increased by 4.2% to 66.26%, and the spot price of domestic and foreign trade rose sharply at the same time. According to the feedback, China’s terminal demand is still supported. The accumulated reserves in the early stage are high, and the core is affected by the slowdown of downstream delivery of high copper price. Under the background of high inflation, the Fed is expected to continue to raise copper prices steadily. (2) Aluminum: ① inventory: 3541127600 tons were removed from the stock exchange on Wednesday, including 38200 tons of LME inventory. China’s social Treasury accumulated 19500 to 1156800 tons, and the accumulation rate continued to decline; ② Supply: electrolytic aluminum resumed production of about 200000 tons to 38.82 million tons this week, and there are still 930000 tons of production capacity to be restored. We expect that China’s reduced production capacity may be basically restored in March, and the corresponding operating capacity will gradually rise to 39.5 million tons. According to the current pace of resumption of work, the output of electrolytic aluminum in March is expected to be close to 3.02 million tons, basically the same as that of the same period last year; ③ Demand: the aluminum price showed a roller coaster market during the week. Under the law of “buying up but not buying down” in the industry, the procurement of downstream customers has not been repaired. The current round of upward factors of aluminum price covers the problems of Russia and Ukraine, which leads to the expected disturbance of raw aluminum supply. Under the condition that the conflict result is not clear, the trend of aluminum price is still obviously affected by risk events. Basically, the operating rate of aluminum profile, sector, strip and foil enterprises rebounded slightly during the week, which is more in line with the seasonal law, but the price decline still affects the willingness of downstream customers to pick up goods. With the approach of late March, under the condition of slight cooling of aluminum price, the willingness to start construction in the downstream will gradually appear, and the replenishment of storage in the midstream is expected to be fulfilled. Under the environment of superimposing overseas aluminum premium, China’s aluminum demand is expected to show an effective recovery scenario. Suggestions and concerns include the following: the ‘ China Molybdenum Co.Ltd(603993) , Tianshan Aluminum Group Co.Ltd(002532) .
Energy metals: the nickel price disturbed the callback of the energy metals sector, and the demand outlook remained unchanged. (1) Lithium: during the week, battery grade lithium carbonate increased by 10000 yuan / ton to 517500 yuan / ton, and the price growth slowed down slightly; In mid February, the production and sales of Shanxi Guoxin Energy Corporation Limited(600617) vehicles were 368000 / 334000 respectively, with a year-on-year increase of 2.0 times and 1.8 times. The demand prospect was good, and the profit space of battery grade lithium carbonate increased by 7800 yuan / ton to 299600 yuan / ton within the week; (2) Nickel: on Monday, LME nickel staged an epic short selling market. The nickel price rose from $30000 to the highest $100000. LME closed the board and suspended trading, and finally decided to cancel the validity of the transaction price of more than 55000. All positions were settled according to the original transaction price or the closing price of 50300 on March 7, 2022. With the landing of the event, SHFE nickel opened down continuously and finally unsealed at the price of 187000 / ton, returning to the price level before the rise, and the risk event basically landed. In the spot market, the internal and external price difference caused a nickel import loss of more than 40000 yuan / ton. The import of nickel raw materials such as MHP and high matte nickel were affected, exacerbating the tension on the supply side. With the stabilization of nickel price, the loss of hedging position of nickel enterprises decreases, the market operation returns to normal, and the demand for resumption of production and replenishment is expected to rebound; (3) Cobalt: China’s Electrolytic Cobalt increased by 1.36% to 566500 yuan / ton, cobalt sulfate increased by 3.0% to 122000 yuan / ton, nickel price fluctuated abnormally this week, and the downstream procurement of cobalt salt tended to be cautious. Affected by the rising cost of raw materials and the decline of subsidies, the growth rate of A00 new energy market is under pressure, and the internal resources of automobile enterprises may be inclined to models with higher profits. Ternary batteries are expected to meet new development opportunities. With the return of nickel price to rationality, the growth rate of lithium price slows down, the downstream pressure is relieved, or part of the suppressed demand is released, which is conducive to the long-term benign development of the industrial chain. It is suggested to focus on the following: ‘ Tibet Mineral Development Co.Ltd(000762) , Xiamen Tungsten Co.Ltd(600549) , Xtc New Energy Materials(Xiamen) Co.Ltd(688778) , Jl Mag Rare-Earth Co.Ltd(300748) .
Risk tips: the global economic recovery is less than expected, the global epidemic development is more than expected, political risks, etc.
