Industrial metals: internationally, the Federal Reserve further strengthens the expectation of raising interest rates in May, the US dollar may further strengthen, and industrial metals are under pressure. China’s “industrial operation monitoring report for the first quarter of 2022 (I)” pointed out that the rising price of raw materials combined with high shipping costs continued to put pressure on the profits of middle and downstream enterprises. In order to stimulate consumption, the central bank and the China Banking and Insurance Regulatory Commission jointly held a symposium on financial support for the real economy to further promote the promotion fee policy. The overall macro expectation remains optimistic, the future consumption growth can be expected, and the middle and lower reaches of industrial metals may pick up. It is suggested to pay attention to: Zijin Mining Group Company Limited(601899) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Shandong Nanshan Aluminium Co.Ltd(600219) , Western Mining Co.Ltd(601168) , Yunnan Tin Co.Ltd(000960) , etc.
Copper: supply is tight and copper prices remain high
This week, the global copper price remained high and fluctuated strongly. LME copper closed at US $10069 / ton, down about 2.55% during the week; Shanghai copper closed at 75010 yuan / ton, up about 1.12% during the week. On the supply side, there was news of shutdown from Peru copper mine, and LME copper inventory continued to maintain a relatively low level, supporting copper prices. China’s electrolytic copper supply remains tight, and the demand side is also weak due to capital pressure and the impact of the epidemic. Overall, the market trading may pick up with the downstream stock demand after the May Day holiday.
Aluminum: weak demand and slight fluctuation of aluminum price
This week, aluminum prices generally remained high and volatile. LME aluminum closed at US $3245 / ton, down about 1.65% during the week; Shanghai aluminum closed at 21920 yuan / ton, up 2.24% during the week. In terms of China’s fundamentals, on the supply side, the growth rate of China’s electrolytic aluminum slowed down in the second quarter, but the concentrated release of early production capacity may significantly rebound in April. In terms of circulation, the transportation is still affected by the epidemic, the arrival of goods in the warehouse is relatively small, and the downstream replenishment is active. The social inventory of electrolytic aluminum has decreased significantly, supporting the aluminum price. On the demand side, the start-up of China’s downstream processing enterprises decreased slightly, with large regional differentiation, and the overall spot market showed a mismatch between supply and demand. In terms of cost and profit, alumina at the raw material end of electrolytic aluminum in China rose slightly during the week, while other raw material ends operated stably. Overall, the steady growth policy may continue to drive demand, and the aluminum price may fluctuate strongly.
Tin: high profits may stimulate the increase of tin supply, and the tin price maintains a volatile trend
LME tin closed at US $42225 / ton, down about 2.71% from last week. Shanghai tin closed at 336300 yuan / ton, down about 0.87% from last week, and the overall tin price fell. In terms of China’s fundamentals, on the supply side, the large-scale import of mines from Myanmar has alleviated the shortage of mines in China to a certain extent. The superimposed tin price is at a high level. High profits have driven some tailings mining and waste tin recovery. The shortage of raw materials has improved significantly year-on-year, and the construction of smelters has climbed steadily. On the demand side, China’s epidemic continues, China’s overall export weakens, and the increment of photovoltaic installed capacity and new energy vehicles is still considerable. On the whole, if the subsequent high profits stimulate more marginal supply increment, China’s Tin inventory may show a shock recovery, and the tin price may move down.
Zinc: the overseas supply gap continued to expand, and the zinc price remained high and volatile
LME zinc closed at US $4393 / ton, down 0.82% from last week. Shanghai zinc closed at 28445 yuan / ton, up 2.15% from last week, and the zinc price remained high and volatile as a whole. Internationally, LEM inventory was 103300 tons, down 10.68% from last week, and Lun zinc inventory continued to go. According to SMM, in the overseas market, the electricity price in Europe remained high after a slight fluctuation, while there was no new news of resumption of production in the smelter, LME inventory continued to go, and there were many zinc ingot transfers in the Southeast Asian market due to the shortage of European supply side. In terms of China’s fundamentals, on the supply side, with the rise of zinc price, smelters have made profits in purchasing imported ore production, but the current spot inventory of imported ore is not enough to support the demand of refineries. According to SMM research, the output of the smelter cannot be released from April to May and will remain about 500000 tons. On the demand side, the epidemic situation will be controlled in the future, and the policy of superimposing promotion fees will be further promoted. The replenishment demand of downstream and terminals after resuming production can still be expected, and the zinc price may fluctuate strongly.
Energy metals: affected by the epidemic, China’s energy metals market still showed a pattern of weak supply and demand this week, but with the country’s steady growth and further promotion of consumption promotion policies, the macro expectation remains optimistic. During the week, the Ministry of energy and information technology issued the guidance on optimizing the proportion of low-carbon photovoltaic industry and promoting the development of low-carbon wind power industry. Macro policies will benefit the development of new energy and energy storage related industries, and will also stimulate the development of the energy metal industry as the upstream of the industrial chain. At the same time, the enterprises related to the new energy industry chain affected by the epidemic in the early stage have gradually resumed production, and the demand for energy metals may continue to improve. It is suggested to be followed by the following: followingthe following of the following: followingthe following of the following: followingthe following of the Zhejiang Huayou Cobalt Co.Ltd(603799) , Tengyuan cobalt industry, Chengtun Mining Group Co.Ltd(600711) , China Molybdenum Co.Ltd(603993) , Nanjing Hanrui Cobalt Co.Ltd(300618) , etc.
Lithium: spodumene prices rose sharply, and profits continued to transfer to the mine end
The price of battery grade lithium carbonate this week was 467000 yuan / ton, down 27000 yuan / ton from last week, down 5.47% month on month; The price of lithium hydroxide was 471500 yuan / ton, down 20000 yuan / ton from last week, down 3.97% month on month. The price of spodumene was 3455 yuan / ton, which continued to rise, up 7.1% from last week. The profit of lithium industry chain continued to transfer to the mine end. In terms of market performance, there are few transactions in the market of lithium carbonate this week, and most of the major upstream manufacturers have no quotation, but the expected price has been lowered. On the supply side, the import of lithium carbonate increased significantly in the first quarter, alleviating some supply pressure in China. At the same time, the output of lithium carbonate in Qinghai region of China resumed, and the supply may increase slightly this month. On the demand side, affected by the previous shutdown, the overall demand is weak due to the off-season superposition of 3C and other fields. From the marginal point of view, the pattern of increasing supply and decreasing demand of lithium salt has led to a slight decline in the price. This year, the increment of the mine end is limited. After the accelerated resumption of production of downstream new energy vehicles, it is expected to form a strong support for the demand for lithium salt, and the price of lithium salt is still expected to remain high.
Cobalt: the market demand is weak and the cobalt price fluctuates slightly
This week, the price of SMM electrolytic cobalt was 547 Sundiro Holding Co.Ltd(000571) 000 yuan / ton, slightly lower than that of last week. The price of cobalt intermediate products was $34 / pound, flat with that of last week. On the supply side, the customs data in March showed that a large number of cobalt intermediates and cobalt salts arrived in Hong Kong, and the import volume increased by 45% month on month. On the demand side, the demand for cobalt in the shipbuilding alloy and other markets has weakened and has not yet recovered. The shutdown of automobile enterprises affected by the epidemic has driven some precursor factories to reduce production in April. The market purchasing sentiment is not high. In order to reduce the inventory pressure, recycled material manufacturers ship at a low price, resulting in the decline of cobalt salt price. It is expected that the demand will recover after the epidemic is alleviated, and the cobalt price is expected to remain high.
Nickel: supply and demand are weak, and nickel prices remain high and volatile
LME nickel closed at US $33150 / ton this week, up 0.02% year-on-year. In terms of inventory, LME nickel inventory on Friday was about 72678 tons, an increase of 78 tons over last week, and SHFE electrolytic nickel inventory was 6890 tons, a decrease of 778 tons over last week. On the demand side, due to the upward price of Shanghai nickel, the increase of raw material cost is difficult to be transmitted to the terminal, the manufacturers’ purchase intention is weak, and the downstream production of alloy, battery and electroplating is reduced due to the high price of raw materials.
On the supply side, the import price difference has not been fully alleviated, the current import is still in a state of loss, and the operating rate of Chinese electrolytic nickel manufacturers is low, resulting in tight supply in the Chinese market. On the whole, the shortage of pure nickel supply leads to the continuous rise of Shanghai nickel price, the repair of internal and external price difference, the opening of import window may improve the supply shortage, and the short-term nickel price is expected to remain high and volatile.
Precious metals: the expectation of raising interest rates put pressure on precious metals, and the price of gold fell 2.26% this week
COMEX gold closed at $1932.5 an ounce this week, down 2.26% from last week. COMEX silver futures closed at $24.19 an ounce, down 6.46% from last week. At present, when the global inflation level remains high, the Federal Reserve, the European Central Bank and the Bank of England frequently release hawkish signals to the market. The market’s expectation of the Federal Reserve accelerating interest rate hike is rising. The US dollar index rose for three consecutive weeks, reaching a new high in the past two years, putting great pressure on the price of precious metals. On the other hand, the conflict between Russia and Ukraine continued this week. It is expected that the war will continue for some time, investors’ risk aversion is rising, and the demand for precious metals is increasing. In addition, at present, the US inflation is high, the global economic outlook is lowered, and the space for further decline of precious metal prices is compressed. Precious metal prices are expected to remain high in the short term.
Rare earth: the market activity has increased and the rare earth market has warmed up
This week, the rare earth market rebounded, and the price showed a rebound trend as a whole. According to Baichuan Yingfu, the light rare earth market has warmed up, praseodymium neodymium oxide has rebounded from the bottom, and the mainstream transaction price of praseodymium neodymium oxide has been raised to 8 Bestway Marine & Energy Technology Co.Ltd(300008) 40000 yuan / ton, up 1 Shenzhen Zhongheng Huafa Co.Ltd(000020) 000 yuan / ton compared with last week; The mainstream transaction price of praseodymium and neodymium metal market was raised to 1.02-1.04 million yuan / ton, an increase of 2 Fawer Automotive Parts Limited Company(000030) 000 yuan / ton compared with last week; The market price of medium and heavy rare earth products rebounded greatly. The quotation of terbium oxide rose to 14-14.2 million yuan / ton, and the mainstream transaction price of metal terbium market was raised to 17.6-17.8 million yuan / ton. On the demand side, the inquiry order of the magnetic material factory this week increased compared with last week, and mainly focused on rigid demand procurement. On the supply side, the start of imported Myanmar mines decreased, the raw ore supply was tight, the waste supply was slightly insufficient, the production capacity of light rare earth separation enterprises was limited, and the overall supply remained tight. It is expected that the price adjustment will be the middle note in the near future. But considering the rapid development of the downstream permanent magnet motors and new energy vehicles, the demand will increase in the long run, which will form a strong support for the rare earth market. It is suggested to pay attention to: China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Jl Mag Rare-Earth Co.Ltd(300748) etc.
Risk tips:
Metal prices fluctuated sharply, the demand for new energy fell sharply, and the macroeconomic performance was lower than expected
