The allocation value of gold and metal resource products increased. The food price index released by the food and Agriculture Organization of the United Nations rose 13% month on month and 34% year-on-year in March. Since the middle of 2020, the FAO’s global price index has increased by about 75%, exceeding the level during the global food crisis in 2008 and 2011. The prices of global food, energy and resource products have risen sharply, superimposed on the repeated conflict between Russia and Ukraine and covid-19 epidemic, as well as the upside down of us two-year and 10-year US bond yields. The market began to worry about the risk of economic stagflation and even recession. The defense function of gold and metal resource products has been strengthened step by step. It is suggested to allocate leading enterprises of gold and metal resource products with good growth.
Copper and aluminum wait for the recovery of demand under the easing of the epidemic. SHFE aluminum price fell 4% to 21730 yuan / ton, with an average gross profit of 4180 yuan / ton, narrowing the profit margin. According to wind data, aluminum ingot inventory increased by 13000 tons to 1023000 tons. The downstream aluminum processing center was frequently disturbed by the epidemic, the operating rate decreased, the transportation of aluminum ingots was limited, the pace of electrolytic aluminum to the warehouse slowed down, and the aluminum price fell under pressure. In the short term, the epidemic situation in China may be the main interference factor of aluminum price. Superimposed with the resumption and acceleration of electrolytic aluminum production in Southwest China, the transportation is still affected by the epidemic situation. It is expected that there will be a certain accumulation pressure on the short-term aluminum ingot inventory; Considering that the current slowdown in downstream construction is mainly due to the impact of the epidemic rather than the decline in real demand, and there are many backlog orders of processing enterprises, with the gradual easing of the epidemic, downstream processing enterprises are expected to usher in a centralized resumption of production. With the advent of the peak consumption season, the demand side will continue to support the upward trend of aluminum prices. The US Federal Reserve is worried that the copper price will rise to RMB 6.47 million tons after the financial crisis, which is expected to support the copper price rise of RMB 6.47 million tons. However, it is expected that the US Federal Reserve will increase the price of copper to RMB 7.37 million tons, which will bring about a certain decline in the price of copper.
Lithium price correction and stabilization are more conducive to the repair of sector valuation. This week, the price of lithium carbonate in Wuxi fell by 3.73% to 439000 yuan / ton, the price of battery grade lithium carbonate in Baichuan fell by 0.005% to 517400 yuan / ton, the price of spodumene rose by 0.3% to 2782 dollars / ton, and the prices of lithium hydroxide and industrial grade lithium carbonate remained unchanged at 4975 yuan / ton and 493900 yuan / ton respectively. The maintenance of lithium carbonate supply end was completed this week, and the production of superimposed salt lake was gradually resumed, with the operating rate increased by 0.5pct to 45.79% and the output increased by 0.5% to 4236 tons; The maintenance of some lithium hydroxide manufacturers was not completed, and the operating rate decreased by 2.4pct to 49%. However, the new capacity of some manufacturers was released, and the overall output increased by 8.36% to 4278 tons. The capacity expansion progress of global lithium resources is slightly higher than expected. The caucar í – olaroz Salt Lake project has been completed by 85%, and the commissioning is expected to start in the second half of 2022. MRL and ALB decide to accelerate the restart of wodgina spodumene project phase II, and it is expected to produce the first batch of lithium concentrate in July 2022; At the same time, phase I is progressing smoothly. It is expected that the first batch of lithium concentrate will be produced in May 2022, which is earlier than that in the third quarter of the original plan; The capacity of each phase is 250000 tons / year, with 6% lithium concentrate. In addition, mtmarion mine announced capacity expansion, and it is expected that the output of lithium concentrate will increase from 450000 tons to Shanghai Pudong Development Bank Co.Ltd(600000) tons in April 2022; At the same time, phase II is expected to reach a mixed concentrate capacity of 900000 tons per year by the end of 2022 (about Shanghai Pudong Development Bank Co.Ltd(600000) tons of 6% lithium concentrate). On the whole, the expansion progress of the resource side exceeded expectations, which can alleviate the tight supply of lithium ore in the third quarter to a certain extent. On the demand side, the sales volume of new energy vehicles continued to grow strongly in the first quarter, and the second quarter was still the off-season of traditional consumption, providing a rare correction window for the price of lithium salt. At present, the lithium carbonate contract in Wuxi has been corrected. However, at present, the inventory of the industrial chain is low, and the third quarter is the peak consumption season of new energy vehicles. The demand for reserve stock in the industrial chain is still strong, so the space for correction of spot price is limited. We believe that the high operating trend of lithium price remains unchanged, but the short-term slight correction and stabilization of lithium price can provide power for the repair of sector valuation.
After the festival, the rare earth market price was weak and stable. The price of praseodymium and neodymium oxide fell by 1.10% to 895000 yuan / ton, and the price of heavy rare earth remained basically unchanged. Affected by the epidemic, the logistics and transportation are blocked, the output of some magnetic material enterprises in the south is reduced by about 30%, there are few upstream and downstream transaction orders, and the market wait-and-see mood is strong.
Rising stagflation risk supports precious metal prices. SHFE gold rose 0.69% to 398.98 yuan / g, and SHFE silver rose 0.7% to 5074 yuan / kg; The real yield of us 10-year Treasury bonds rose 26pct to – 0.15%; SPDR’s gold position was 1090 tons and SLV’s silver position was 17600 tons, basically the same as last week. At present, precious metals are still mainly affected by geographical conflicts and the expectation of interest rate increase by the Federal Reserve in the short term. The rising risk of medium and long-term stagflation and the subsequent expectation of US economic recession may continue to support the upward trend of precious metal prices. Russian Ukrainian relations reversed again. Zhou zhongzelenski changed his mouth to join NATO. At the same time, NATO continued to provide military assistance to him, and the demand for risk avoidance in the market increased again; According to the minutes of the Federal Reserve’s meeting in March, most participants believed that it was more appropriate to shrink the table by US $95 billion a month. The minutes of the meeting were generally hawkish, but precious metals performed strongly, mainly due to the upside down superposition of the yield of us 2-10-year US bonds, repeated disturbance of the epidemic, increasing expectation of market recession and strong support for precious metal prices.
Investment suggestions: in the context of the “double carbon” goal, pay attention to the historic investment opportunities of new energy and new materials, and focus on new energy metals with strong demand and weak supply pattern and new metal materials benefiting from industrial upgrading and domestic substitution. The strong constraints on the supply of metal resources caused by long-term low capital expenditure will support the high operation of non-ferrous metal prices in the next few years. At the same time, with the upward inflation expectation and the continuous easing of China’s monetary policy, non-ferrous metal resource enterprises will usher in investment opportunities for value revaluation. Lithium suggests paying attention to Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) , Chengxin Lithium Group Co.Ltd(002240) , Sinomine Resource Group Co.Ltd(002738) , Yongxing Special Materials Technology Co.Ltd(002756) , etc; It is suggested to pay attention to Poco Holding Co.Ltd(300811) , Lizhong Sitong Light Alloys Group Co.Ltd(300428) , Guangdong Haomei New Materials Co.Ltd(002988) , Guangdong Hoshion Aluminium Co.Ltd(002824) , Jiangsu Pacific Quartz Co.Ltd(603688) , Ningbo Boway Alloy Material Co.Ltd(601137) , etc. for new materials; Titanium suggests paying attention to Baoji Titanium Industry Co.Ltd(600456) , Sichuan Anning Iron And Titanium Co.Ltd(002978) , Western Metal Materials Co.Ltd(002149) , etc; It is suggested to pay attention to Sino-Platinum Metals Co.Ltd(600459) , Chifeng Jilong Gold Mining Co.Ltd(600988) , Yintai Gold Co.Ltd(000975) , etc. for precious metals; For industrial metals, it is suggested 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) , Sunstone Development Co.Ltd(603612) , etc.
Risk factors: the downstream demand has fallen more than expected, the supply side constraint policy has shifted, and China’s liquidity easing is less than expected; The US tightened liquidity more than expected; Metal prices fell sharply.
