In China, the impact of the epidemic has intensified, the steady growth policy may speed up the force. In China, the impact of the epidemic has intensified, the production of some metals in the downstream has been reduced and stopped, the production orders have been postponed, and the stocks of various metals have accumulated to varying degrees. The overall stocks may still maintain the trend of accumulation before the inflection point of the epidemic. At the macro level, the steady growth policy may speed up its efforts. Premier Li Keqiang presided over a symposium of experts and entrepreneurs on the economic situation on April 7 and pointed out that policies and measures should be strengthened in advance and in time.
Overseas, after the Bucha incident on the situation between Russia and Ukraine, the negotiation progress between Russia and Ukraine reached a deadlock again, the attitude of Ukraine became tough, the uncertainty of the overseas situation increased again, the inflation expectation caused by supply chain problems is expected to rise further, and the prices of metals such as copper and gold are still strongly supported under the high inflation.
Industrial metals
Copper: LME Asia warehouse has a large number of warehouses, and China’s consumption is sluggish. On April 8, China electrolytic copper society warehouse accumulated 2600 tons compared with last week, of which Shanghai accumulated 45000 tons. The impact of the epidemic in East China has further intensified, the scale of production reduction and shutdown of downstream enterprises has expanded, and the operating rate of copper rods has significantly decreased by 15.21 percentage points to 42.15% month on month.
At present, the impact of the epidemic in China or the marginal reduction, the differentiation of internal and external supply and demand of electrolytic copper, and the formation of a certain repair to the internal and external price ratio in the short term. At the macro level, we need to continue to pay attention to the scale of the Fed’s table reduction in May and the impact of overseas geographical conflicts.
Aluminum: China’s short-term supply and demand mismatch continued. In terms of short-term callback of supply, the operating capacity of electrolytic aluminum increased by 1.352 million tons month on month in March to 40.073 million tons. In April, the supply side continued to resume production and speed up. Under the continuous epidemic situation, China’s supply and demand mismatch continued.
LME continued to destock to 615700 tons this week. IEA Member States announced the release of oil reserves. Overseas energy was tight, and the expected margin weakened. Aluminum price followed the short-term correction of crude oil. However, in the long run, there was still great uncertainty in overseas energy supply and demand, and aluminum price still had strong support under the background that LME inventory continued to be at a historically low level.
Zinc: the European inventory has reached a very low level, and the zinc price is expected to be strong. The LME inventory continues to be decontaminated. At present, it is less than 130000 tons, of which the refined zinc inventory in Europe is only 500 tons, which is the lowest level in recent years. Low overseas inventory drives the surge of European spot prices, and forms a strong driving force for futures prices. From the perspective of short-term operation, the contradiction of zinc price in Europe is still expected to be strong.
Precious metals
Gold: inflation expectations still drive gold prices upward. In terms of the situation in Russia and Ukraine, after the Bucha incident, the negotiation progress between Russia and Ukraine reached an impasse again, Ukraine’s attitude became tough, the uncertainty of the overseas situation increased again, the inflation expectations caused by supply chain problems are expected to rise further, and the gold price is expected to be strongly driven under high inflation.
Investment suggestion: it is suggested to pay attention to Yunnan Chihong Zinc & Germanium Co.Ltd(600497) , Henan Mingtai Al.Industrial Co.Ltd(601677) , Yunnan Aluminium Co.Ltd(000807) , Chifeng Jilong Gold Mining Co.Ltd(600988) , Shandong Gold Mining Co.Ltd(600547) .
Risk tips: Overseas geopolitical risks; Supply has increased more than expected; The demand is less than expected.
