Key investment points:
Steel:
The procurement volume of thread snails this week was – 7.74% month on month and – 33.49% year on year; The output of thread / wire rod / medium thickness / hot rolling / cold rolling was + 1.57% / + 2.85% / + 1.37% / + 2.71% / + 2.23% month on month; Blast furnace / electric furnace capacity utilization ratio month on month + 1.46pct / + 0.05pct; The total of social storage and factory storage was + 0.55% month on month and – 0.02% year on year; The steel price index fell slightly month on month; The gross profit of the four varieties of steel decreased month on month. In the short term, the rigidity under the dual carbon target of the supply side is obvious, and the downstream demand of the demand side is weak. Industries begin to enter the accumulation stage. Under the hedge of stable economic policy in 2022, they will resume work after the Spring Festival or in advance. It is necessary to pay attention to the improvement brought by the marginal change of demand brought by the policy next year.
Industrial metals:
The current price of LME copper / the current price of Yangtze nonferrous copper this week was + 1.15% / + 0.04% month on month; LME aluminum current price / Changjiang nonferrous aluminum current price – 1.47% / + 1.39% month on month. The global epidemic eased this week, and the optimistic market sentiment led to the recovery of copper and aluminum prices. Near the Spring Festival, the downstream demand of copper and aluminum weakened and entered the accumulation stage. The Ministry of supply end industry and information technology set that the production capacity will only be reduced but not increased next year. In 2022, the fundamentals are expected to improve under the hedging of stable economic policies, and the downward inflection point of the industry may appear. It is necessary to pay attention to the promotion of policies.
New energy metals:
In terms of lithium, the price of lithium carbonate this week was + 8.82% month on month; The price of lithium hydroxide was + 3.58% month on month. In terms of cobalt, this week’s 1# cobalt price was – 0.62% month on month. The supply and demand of raw materials in the upstream of new energy continues to be tight, and the lithium center is expected to continue to rise driven by the replenishment of downstream enterprises.
Rare earth:
The price of praseodymium and neodymium oxide / dysprosium oxide / terbium oxide this week was + 0.59% / 0.00% / + 0.90% month on month. Under the dual carbon target, the state has issued energy-saving motor policies to stimulate the demand for rare earth permanent magnet. At the same time, the demand space for magnetic materials is broad under the new energy revolution. It is expected that the price center of rare earth permanent magnet materials may continue to rise under the tight supply and demand.
Investment advice
Iron and steel: it is recommended to pay attention to Baoshan Iron & Steel Co.Ltd(600019) (600019. SH), Beijing Shougang Co.Ltd(000959) (000959. SZ) with low energy consumption per ton and strong cost control ability; Zhejiang Yongjin Metal Technology Co.Ltd(603995) (603995. SH), Citic Pacific Special Steel Group Co.Ltd(000708) (000708. SZ) in special steel field; At the same time, the Ministry of water resources pointed out that according to the requirements of properly advancing the policy, focusing on improving the river basin flood control project system and implementing major national water network projects, giving full play to the important role of water conservancy in stabilizing investment and expanding domestic demand, and benefiting the pipeline steel, it is suggested to pay attention to the pipe company Xinxing Ductile Iron Pipes Co.Ltd(000778) (000778. SZ).
Industrial metals: it is recommended to pay attention to the lithium battery copper foil manufacturer Guangdong Jiayuan Technology Co.Ltd(688388) (688388. SH). New energy metals: it is recommended to pay attention to Ganfeng Lithium Co.Ltd(002460) (002460. SZ) and Tianqi Lithium Corporation(002466) (002466. SZ) under the expectation of lithium price rise.
Rare earth sector: it is recommended to pay attention to China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) (600111. SH), China Minmetals Rare Earth Co.Ltd(000831) (000831. SZ), Henan Shenhuo Coal&Power Co.Ltd(000933) (000933. SZ) under the expectation of rising price center.
Risk statement
Raw material price fluctuation risk, lower downstream demand than expected risk, covid-19 epidemic spread than expected risk.
