The control of the epidemic is weakened, and steady growth is renewed. Industrial production activities have gradually recovered from the suppression of the epidemic, and the steady growth policy is expected to be further promoted. SMM survey data show that the resumption rate of 666 key enterprises in Shanghai exceeds 90%, and Shanghai clearly wants to promote the resumption of work and production in three stages, and will accelerate the full resumption of work and production after June 1. On the 20th, the people’s Bank of China announced the latest phase of LPR. The LPR over 5 years was 4.45%, down 15 basis points from the previous month. At present, more than 99% of individual housing loan interest rates are linked to the LPR over 5 years. This reduction will help reduce the pressure on Residents’ housing loan interest, stabilize investment and consumption expectations, promote the steady and healthy development of the real estate market and support economic recovery.
Pay attention to electrolytic aluminum enterprises with abundant hydropower capacity and resource guarantee; Copper price fundamentals are expected to remain supportive. The price of aluminum rose to 20885 yuan / SHFE ton. According to wind data, aluminum ingot inventory decreased by 37000 tons to 943000 tons. According to Baichuan Yingfu, the operating rate of aluminum sector, strip and foil increased by 0.14pct to 35.91% this week, and the operating rate of aluminum rod was the same as that of last week. With the easing of the epidemic in East China, the operating rate of downstream processing enterprises continued to rise. This week, the European Commission on environment, public health and food safety (envi) voted to approve the carbon border regulation mechanism (CBAM). Compared with the carbon tariff scheme proposed last year, cban shortened the transition period of carbon tariff to two years, and included indirect emissions (emissions from purchased electricity) into the scope of taxation. Electrolytic aluminum, as a high carbon emission industry, is expected to continue to improve the energy structure with the further tightening of European carbon policy. In terms of fundamentals, with the gradual improvement of the epidemic situation in East China, the demand of downstream processing enterprises gradually recovered, and the removal of aluminum ingots from the warehouse continued; On the raw material side, Indonesia, China’s top three bauxite importer, announced that it would ban bauxite export this year, tightening the supply of raw materials and heating up is expected. Overall, with the acceleration of the pace of resumption of work and production in East China, the demand side of electrolytic aluminum has gradually improved; The supply of bauxite in Indonesia may disturb the raw material end, and the further tightening of EU carbon policy will also continue to guide the improvement of electrolytic aluminum energy structure. It is expected that with the continuous recovery of demand, the aluminum price center is expected to rise. Under this background, electrolytic aluminum enterprises with hydropower capacity and abundant resource guarantee will benefit for a long time. SHFE copper price rose 1% to 71840 yuan / ton. LME + SHFE inventory increased by 1000 tons to 279000 tons. With the acceleration of the resumption of work and production in East China and the gradual recovery of downstream processing demand, the fundamentals of copper prices are expected to remain supported.
Lithium prices have shown signs of stabilization and recovery. This week, the price of lithium carbonate in Wuxi sector increased by 3.7% to 448000 yuan / ton, the price of carbon in Baichuan electricity increased by 0.2% to 476400 yuan / ton, the price of spodumene increased by 13% to 4350 US dollars / ton, and the industrial carbon and lithium hydroxide maintained 452500 yuan / ton and 490900 yuan / ton respectively. This week, the operating rate of lithium carbonate increased by 2.15pct to 54.18% month on month, and the output increased by 2.15% to 5220 tons; After the overhaul of the large lithium hydroxide plant, the operating rate increased by 17.29pct to 48.36% and the output increased by 17.30% to 4116 tons. However, due to the limited supply of resources, the operating rate is still less than 50%. On the demand side, some small and medium-sized cathode manufacturers have just needed to purchase lithium carbonate in small quantities due to the low inventory in the early stage and the gradual improvement of the epidemic situation in Jiangsu and Zhejiang. In addition, due to the strong price of lithium hydroxide and the continuous rise of spodumene price, some high nickel material plants and causticization plants have increased industrial carbon preparation. Sqm released a quarterly report this week. The sales volume of lithium salt in the first quarter was 38100 tons, a year-on-year increase of 59%, and the selling price was 38000 US dollars / ton. It is expected that the sales volume will exceed 140000 tons in 2022. In addition, Pilbara will hold the second lithium concentrate auction of the year on May 24, and the auction price may affect the subsequent trend of lithium price. This week, the equity auction of snowway mining fell on the 21st, with a transaction price of 2 billion yuan, superimposed with a delivery Commission of 60 million yuan and the corresponding debt of 850 million yuan, winning 54.29% of the equity cost of snowway mining, reaching 2.91 billion yuan. Snowway owns the exploration right of delarumba lithium ore, with the ore volume of delarumba of 24.924 million tons and the lithium oxide grade of 1.18%, which is converted into lce72.5% 30000 tons, the high price transaction reflects the expectation of high prosperity in the lithium market. Lithium prices have shown signs of stabilization and recovery. We expect lithium prices to run at a high level under the background of booming supply and demand. Expectations tend to be consistent, and the repair of sector valuation will continue.
Rare earth prices continued to rise under the support of costs. The price of praseodymium and neodymium oxide increased by 1.64% to 930000 yuan / ton. Under the influence of the epidemic, Myanmar’s imported mines have decreased, and the supply of light rare earth mines in the north is OK. However, due to the strict environmental protection control in Jiangxi and other regions, the mining of medium and heavy rare earth mines in the south is relatively tight. At present, the production of waste separation plant has been reduced and stopped due to the insufficient supply of raw materials. The waste is high and hard to find in stock, and the cost is supported by the price of rare earth. The price of rare earth is expected to rise, and the resumption of production in Shanghai is expected.
The upward trend of precious metals is gradually confirmed. SHFE gold rose 0.3% to 397.32 yuan / g, and SHFE Silver Rose 1.6% to 4723 yuan / kg; The real yield of us 10-year Treasury bonds fell 1PCT to 0.23%; SPDR’s gold position increased by 7 tons to 1063 tons, and SLV’s silver position decreased by 200 tons to 17500 tons. The price of precious metals continued to fluctuate this week, and the hawks of the Federal Reserve continued to disturb the market sentiment, but the data released within the week showed that the economic inflection point may be gradually confirmed: the consumer confidence index of the University of Michigan and the manufacturing index of Philadelphia in the United States were significantly lower than expected in April, while the number of people asking for unemployment benefits in the United States was higher than expected, indicating that the confidence of U.S. economic demand was insufficient, and the economic inflection point may be gradually confirmed; In other regions, Sri Lanka defaulted for the first time in the history of sovereign debt due to high inflation and sharp currency devaluation, suggesting that inflation has a significant impact on emerging economies. It is expected that the current high inflation rate will be difficult to solve in the short term, and there is a marginal decline in economic growth. If the marginal decline rate of economy is faster than the decline rate of inflation, the global economy may gradually evolve to stagflation, and the upward trend of precious metal prices will be confirmed.
Investment suggestions: in the context of the “double carbon” goal, pay attention to the historic investment opportunities of new energy and new materials, and focus on new energy metals with strong demand and weak supply pattern and new metal materials benefiting from industrial upgrading and domestic substitution. The strong constraints on the supply of metal resources caused by long-term low capital expenditure will support the high operation of non-ferrous metal prices in the next few years. At the same time, with the upward inflation expectation and the continuous easing of China’s monetary policy, non-ferrous metal resource enterprises will usher in investment opportunities for value revaluation. Lithium suggests paying attention to Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) , Chengxin Lithium Group Co.Ltd(002240) , Sinomine Resource Group Co.Ltd(002738) , Yongxing Special Materials Technology Co.Ltd(002756) , etc; It is suggested to pay attention to Poco Holding Co.Ltd(300811) , Lizhong Sitong Light Alloys Group Co.Ltd(300428) , Guangdong Haomei New Materials Co.Ltd(002988) , Guangdong Hoshion Aluminium Co.Ltd(002824) , Jiangsu Pacific Quartz Co.Ltd(603688) , Ningbo Boway Alloy Material Co.Ltd(601137) , etc. for new materials; Titanium suggests paying attention to Baoji Titanium Industry Co.Ltd(600456) , Sichuan Anning Iron And Titanium Co.Ltd(002978) , Western Metal Materials Co.Ltd(002149) , etc; It is suggested to pay attention to Sino-Platinum Metals Co.Ltd(600459) , Chifeng Jilong Gold Mining Co.Ltd(600988) , Yintai Gold Co.Ltd(000975) , etc. for precious metals; For industrial metals, it is suggested to pay attention to Yunnan Aluminium Co.Ltd(000807) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Western Mining Co.Ltd(601168) , Zijin Mining Group Company Limited(601899) , Sunstone Development Co.Ltd(603612) , etc.
Risk factors: the downstream demand has fallen more than expected, the supply side constraint policy has shifted, and China’s liquidity easing is less than expected; The US tightened liquidity more than expected; Metal prices fell sharply.
