European manufacturing PMI fell significantly, and energy and supply may put pressure on metal prices
Affected by the epidemic and geopolitical conflict, the PMI of global manufacturing industry in March was 54.1%, down 0.8% month on month, and that of European manufacturing industry was 55.3%, down 1.6% month on month. European and American sanctions against Russia increased, the shortage of raw material supply and high energy prices put pressure on metal prices, and LME aluminum, zinc and nickel inventories continued to decline. Metal prices generally fell this week, and LME copper fell – 0.09% to close at US $10344 / ton; LME aluminum fell – 2.26% to close at US $3372 / ton; LME lead fell – 1.61% to close at US $2410 / ton; LME zinc fell – 0.94% to close at US $4298 / ton; LME tin fell – 2.76% to close at US $43530 / ton; LME nickel rose 2.31% to close at US $33990 / ton. It is suggested to pay attention to Yunnan Copper Co.Ltd(000878) , Tongling Nonferrous Metals Group Co.Ltd(000630) , Zijin Mining Group Company Limited(601899) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Yunnan Aluminium Co.Ltd(000807) .
The high price of lithium and cobalt may stabilize the price of rare earth or provide support from the good demand
In terms of lithium, the prices of battery grade lithium carbonate and lithium hydroxide this week were the same as last week. According to the calculation of China Automobile Association, the sales volume of the automobile industry in March is expected to be 2.249 million, with a month on month increase of 29.5% and a year-on-year decrease of 11%. Affected by the economic situation and epidemic situation outside China, the release of lithium hydroxide production is blocked, the market supply situation continues to be tight, the short-term supply and demand ends will still support the lithium price to maintain a high level, and many enterprises continue to layout lithium mines on the resource side. In terms of cobalt, the price is still high, the sales volume of downstream applications decreases, and the overall demand weakens. In terms of rare earth, the price of rare earth continued to decline this week. CDB issued more than 100 billion yuan in the first quarter to support the green and low-carbon transformation of energy. The demand for downstream new energy vehicles and wind power may provide long-term support for the price of rare earth. It is recommended to pay attention to Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) , Zhejiang Huayou Cobalt Co.Ltd(603799) , Chengtun Mining Group Co.Ltd(600711) .
The national standing committee will strengthen the expectation of reducing reserve requirements and interest rates, and infrastructure investment is expected to drive long-term industrial metal consumption
On April 6, the national standing committee pointed out that monetary policy tools should be used flexibly and timely to increase support for the real economy and enhance the expectation of reducing reserve requirements and interest rates. On April 8, the Ministry of Water Resources said that the water conservancy development fund will reach 60.6 billion yuan in 2022, and infrastructure investment is expected to drive industrial metal consumption. In the short term, the epidemic situation in China has not eased. The transportation interruption has led to a dilemma in the transportation of raw materials and products, and the upstream demand continues to narrow. Copper on the Shanghai Futures Exchange rose 0.53% to close at 73520 yuan / ton this week; Aluminum fell – 4.04% to close at 21795 yuan / ton; Lead fell – 1.43% to close at 15500 yuan / ton; Zinc rose 0.74% to close at 27055 yuan / ton; Tin fell – 0.56% to close at 336640 yuan / ton; Nickel fell – 0.99% to close at 217320 yuan / ton. It is recommended to pay attention to Henan Mingtai Al.Industrial Co.Ltd(601677) , Tongling Nonferrous Metals Group Co.Ltd(000630) , Zhejiang Hailiang Co.Ltd(002203) , Yunnan Aluminium Co.Ltd(000807) , etc.
Concerns about the situation in Russia and Ukraine and rising inflation still prompted the market to increase gold investment
According to the data released by the World Gold Council, in March, the global gold ETF recorded a net inflow of 187.3 tons, the largest since 2016. The market’s concerns about the situation in Russia and Ukraine and inflation prompted capital to flow into gold. This week, spot gold in London rose 1.15% to close at 194693 US dollars / ounce, while the US dollar index rose 1.29% to close at 99.84; COMEX gold rose 1.39% to US $194560/oz this week, while Comex Silver Rose 1.02% to US $24.82/oz. Considering the expectation of interest rate increase and short-term high inflation, the price of gold may fluctuate.
Risk warning: Geopolitics, lower than expected downstream demand and repeated epidemic.
