Key investment points:
The meeting of the Political Bureau boosted confidence and optimistic about the demand for non-ferrous metals. On April 29, the Political Bureau of the CPC Central Committee held a meeting. The meeting called for strengthening macro policy adjustment, stabilizing the economy, striving to achieve the expected goal of economic and social development throughout the year, and maintaining the economic operation within a reasonable range. The meeting timely boosted market confidence, accelerated the implementation of steady growth policies or further boosted the demand for related metals in infrastructure, manufacturing and other fields.
Metal industry
Copper: China’s consumption has improved significantly, and the internal and external price comparison has been significantly repaired. China’s social copper inventory decreased by 16700 tons to 110600 tons month on month, and the pace of destocking has further accelerated. In terms of downstream, the weekly operating rate of refined copper rods has been continuously repaired to more than 60%. Most copper rod enterprises in Jiangsu, Zhejiang and Anhui have resumed normal production, and wire and cable orders need to be further improved. Overall, there are significant signs of recovery in China’s downstream consumption of refined copper. China’s fundamentals are stronger month on month, and the internal and external price comparison continues to repair. Spot imports have turned into profits on April 29. With the accelerated recovery of the epidemic, China’s demand is expected to enter the accelerated start-up stage.
Aluminum: the profit of electrolytic aluminum has dropped, and the consumption in the downstream will be further improved. On April 28, the social inventory of electrolytic aluminum in China went to the warehouse from 34000 tons to 987000 tons month on month, which is partly caused by the downstream goods preparation before the festival. On the whole, the operating rate of downstream aluminum sector, strip and profile has not increased further. In terms of supply, affected by the periodic decline of aluminum price, the profit of electrolytic aluminum fell to less than 3000 yuan / ton, and the absolute value is still at a relatively high level. The rhythm of resumption of production of Chinalco continues, and the inflection point of fundamentals remains to be further strengthened after the accelerated recovery of the epidemic.
Zinc: the support logic of continuous cost reduction of inventory outside China continued to deduce. On April 29, LME refined zinc inventory went to the warehouse from 7900 tons to 95400 tons, including 375 tons in Europe; China’s social refined zinc inventory has gone from 6500 tons to 277100 tons. The operating rate of die-casting alloy in the downstream has been slightly repaired month on month. The production of galvanizing is still limited due to the impact of terminal and logistics.
Overseas, the electricity price of Belgium, Germany, France and other countries remained above 200eur / MWh at the end of April, and the cost support logic continued to deduce. At the same time, the spot premium of refined zinc in Europe continued to remain high, the spot shortage situation remained unsolved, and the zinc price is expected to remain strong.
Precious metals
Gold: in the short term, pay attention to the interest rate increase range of the Federal Reserve in May. The interest rate meeting of the Federal Reserve in May is gradual. Last week, the gold price fell to a certain extent, and the ETF position decreased in the short term. In the short term, pay attention to whether the interest rate increase range this week is higher than expected. In the long term, under the background of unresolved inflation, gold still has long-term allocation value.
Investment suggestions: policies related to steady growth may be implemented at an accelerated pace, and infrastructure boosting and real estate stabilization will further stimulate the downstream demand for copper, aluminum and zinc industrial metals; If the disturbance at the overseas supply side continues, the non-ferrous metal fundamentals may continue to improve. 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
