Event: Comments on the downstream demand of copper and aluminum and the promotion of the resumption of work and production of the automobile industry chain: the superposition of epidemic control and transportation continues to be blocked, affecting the metal demand. With the continuous promotion of the resumption of work and production, the metal demand may be repaired.
As of April 15, 2022, the epidemic situation has not been significantly improved. In addition, the logistics and transportation in East China are still difficult and the transportation cost is soaring. The downstream enterprises of industrial metals are still facing the problems of shortage of raw materials and weak consumption, and the resumption of production progress is relatively slow. According to SMM, the operating rate of leading aluminum downstream processing enterprises increased by 1.2 percentage points to 67.8% month on month. The main reason is that the operating rate of aluminum profile enterprises rebounded, and the production of enterprises that stopped production in the early stage resumed, driving the overall operating rate to rise slightly, but the order increment was less than expected. According to SMM, the weekly operating rate of China’s main refined copper rod enterprises was 50.93%, up 8.78 percentage points from last week. The main reason is that some enterprises with passes can pick up goods in Shanghai port and central storage warehouse. The electrolytic copper inventory has been supplemented to some extent, and the shortage of raw materials has been alleviated. However, the high copper price is superimposed on the soaring transportation costs, and there is great pressure on downstream funds. At present, production is mostly determined by sales, consumption is weak due to the suppression of the epidemic, and new orders continue to decrease. The guidelines for epidemic prevention and control were issued, and the automobile industry in Jilin and Shanghai may resume production gradually.
According to first finance, since March, the epidemic has spread in Shanghai, Jilin and other places, and many car enterprises such as FAW, Tesla, SAIC and Weilai have reduced production and stopped production one after another. Auto suppliers such as Bosch, ZF and anbofu were also affected by the epidemic.
On April 16, the Shanghai Municipal Commission of economy and information technology officially issued the guidelines for the prevention and control of the epidemic situation of industrial enterprises returning to production and work, including the implementation of the main responsibility of enterprises, the implementation of site zoning and classification management, the strengthening of enterprise staff management, the strengthening of logistics management and epidemic prevention material reserve, and the preparation of emergency response plans and work support. The Ministry of industry and information technology dispatched the Shanghai front working group to ensure the smooth operation of the industrial chain and supply chain, and give priority to the resumption of work and production of 666 key enterprises in integrated circuit, automobile manufacturing and other industries. The “white list” includes SAIC, Tesla and 98 Shanghai auto parts suppliers.
In Shanghai, at present, FAW Group plans to feed back the situation of return to work on April 17, start the pressure test of return to work and production on April 18, and uniformly apply for the “white list” of return to work and production for subordinate enterprises. Tesla, Contemporary Amperex Technology Co.Limited(300750) and other enterprises said they were actively returning to work in accordance with the requirements of epidemic prevention and control. In Jilin, the automobile industry is an important pillar industry in Jilin Province, which has taken the lead in realizing the resumption of work and production. FAW resumed work in all five main engine plants in Changchun, FAW Hongqi Weishan plant, FAW Volkswagen and FAW Toyota all realized the offline of the whole vehicle, and FAW Pentium and Faw Jiefang Group Co.Ltd(000800) started production. BMW Brilliance Shenyang factory also resumed work on April 13.
Risk tip: the demand for new energy is less than expected, and the macro-economy fluctuates greatly
