Precious metals: gold prices are expected to remain strong against the background of geo crisis and upward inflation. ① Nominal interest rate: after the Federal Reserve raised interest rates for the first time, the US CPI in March was 8.5% year-on-year, a new high in more than 40 years. There is no suspense about raising interest rates by 50bp in May. The war situation in Wudong accelerated the return of the US dollar, and the 10Y US bond interest rate rose again by 11bp to 2.83%. The US dollar index broke through the 100 line for the first time since the epidemic; ② Inflation expectation: EU officials drafted a phased ban on Russian oil imports. Brent crude oil prices rebounded sharply to more than $100 / barrel. The implicit inflation expectation rose slightly by 2bp to 2.89% during the week. The strong rise of 10Y US bond interest rate led to a rise in real interest rate by 10bp to – 0.06%. After the inflation data were released, the gold price showed strong resilience, which proved that under the background of supply-demand mismatch caused by energy shortage, the Fed’s monetary policy has limited effect on the regulation of inflation level, and inflation expectation will still lead the gold price upward. In addition, Russia’s elite troops headed for Donbas, which caused the market to worry about the decisive battle in eastern Ukraine. Under the background of geopolitical crisis and rising inflation, the price of gold is expected to remain strong. It is suggested to pay attention to: Zijin Mining Group Company Limited(601899) , Shandong Gold Mining Co.Ltd(600547) , Chifeng Jilong Gold Mining Co.Ltd(600988) , Yintai Gold Co.Ltd(000975) , etc.
Base metal: the marginal improvement of logistics and the recovery of demand will bring the metal back to the warehouse in the peak season. (1) Copper: ① macroscopically, the CPI of the United States increased by 8.5% in March, a new high in more than 40 years, which promoted the transfer of market transactions from China’s epidemic to the energy supply crisis & inflation expectation. China’s standard cut of 25bp released a positive signal, and commodity prices are expected to remain high; ② In terms of supply, this week, the spot TC of copper concentrate officially exceeded US $80 / ton, the price of smelting and acid making rose to more than 900 yuan / ton, and the profit per ton of electrolytic copper of the smelter was as high as 3000 yuan / ton, attracting the smelter to maintain high operation rate. This week, the logistics control in Jiangsu and Zhejiang was slightly relaxed, the delivery of electrolytic copper in Shanghai increased, and the spot premium fell from a high level; ③ In terms of demand & inventory, since Wednesday, some warehouses in Shanghai have been able to pick up the goods with 24-hour nucleic acid, but the freight rate has increased by about 4 times compared with the previous period, and the downstream manufacturers maintain the rigid demand for procurement. Raw materials gradually arrived and downstream production recovered significantly. According to SMM research, the operating rate of China’s major copper rod enterprises was about 50.93% during the week, up 8.78 percentage points from last week. Due to the continuous accumulation of the epidemic for two weeks, the copper social inventory fell again from 11500 tons to 120000 tons this week, basically returning to the pre epidemic level. The end of April will usher in the peak season of traditional consumption. China’s RRR reduction will release a strong easing signal, and metal prices are expected to remain high and resilient; (2) Aluminum: ① price: Shanghai aluminum rose 0.11% to 21850 yuan / ton, LME aluminum fell 2.16% to 3299 US dollars / ton, and the premium of overseas aluminum basically ended; ② In terms of inventory: on Wednesday, the large exchange went to the warehouse from 16600 tons to 936800 tons, including 7800 tons to 608000 tons of LME inventory per week and 7600 tons to 299900 tons of SHFE inventory per week. According to Baichuan Yingfu, China’s social inventory increased from 16700 tons to 1098500 tons this week, with a decrease of 132800 tons compared with the same period last year, and China’s foreign aluminum inventory has slowed down slightly; ③ In terms of cost, the price of pre baked anode in the week was the same as that of last week, the price of alumina and power coal increased slightly, and the profit level of single ton electrolytic aluminum (self owned power plant) fell by 113.7 yuan / ton to 3486 yuan / ton in the week; ④ On the supply side: under the stalemate between Russia and Ukraine, the high energy prices in Europe have repeatedly restricted the resumption of production of European aluminum plants and threatened other production capacity to enter the queue of production reduction. LME inventory continued to decline to a very low level, forming an effective support for overseas aluminum prices. This week, China’s new resumption of production + production totaled about 120000 tons to 40.49 million tons, and the resumption of production trend will continue; ⑤ Demand: this week’s epidemic is still the core obstacle to demand recovery. At the same time, the rapid decline of aluminum price in the early stage leads to the untimely transmission of aluminum rod price. Some aluminum rod enterprises choose to stop production to reduce short-term losses. There are still great difficulties in the transportation of finished products in East China, and the extension of delivery time leads to the accumulation of finished product inventory. Although it is difficult for aluminum consumption to rebound sharply before the end of the epidemic, the early order squeeze will breed the phenomenon of retaliatory resumption of work and procurement in the downstream after the impact of the epidemic subsides. Suggestions and concerns include the following: the ‘ China Molybdenum Co.Ltd(603993) , Tianshan Aluminum Group Co.Ltd(002532) . Energy metals: the rise of raw materials squeezes the profits of salt factories, and the epidemic has impacted the shutdown of vehicle factories. The price is under periodic pressure. (1) Lithium: affected by the epidemic, Tesla, SAIC Volkswagen, Weilai, etc. have successively announced the shutdown, and the price of lithium salt is under pressure in stages. During the week, the price of electric carbon decreased by 37000 yuan / ton to 480400 yuan / ton, and the price of electric hydrogen increased by 15000 yuan / ton to 512300 yuan / ton. At present, the lithium salt reserve of most cathode material manufacturers is lower than the level of one month, and it is expected that cathode material enterprises may gradually usher in replenishment in late April; (2) Nickel: this week, SHFE nickel rose 5.15% to 229400 yuan / ton, nickel sulfate rose 1.31% to 50200 yuan / ton, the supply of pure nickel was tight, and the price rose. The price of pure nickel and nickel sulfate continued to hang upside down, which reduced the production willingness of nickel sulfate manufacturers. The epidemic situation led to the difficulty of picking up inventory in Jiangsu and Zhejiang market and the rise of freight charges, which further inhibited the enthusiasm of downstream production, and the profit space of downstream precursor factories was greatly compressed and there was a reduction in production; (3) Cobalt: China’s Electrolytic Cobalt fell 0.71% to 555500 yuan / ton, while cobalt sulfate remained stable at 119500 yuan / ton. Cobalt prices fell inside and rose outside, the prices of imported intermediate raw materials were high, and the profit margin of cobalt sulfate processing fell by 9.16% to 16000 yuan / ton during the week. It is suggested to focus on the following: ‘ Tibet Mineral Development Co.Ltd(000762) , Xiamen Tungsten Co.Ltd(600549) , Xtc New Energy Materials(Xiamen) Co.Ltd(688778) , Jl Mag Rare-Earth Co.Ltd(300748) .
Risk tips: the global economic recovery is less than expected, the global epidemic development is more than expected, political risks, etc.
