Precious metals: the US dollar index peaked and fell, and the geopolitical & stagflation risk provided long-term support for the gold price. Gold: ① nominal interest rate: both the US dollar index and US bond interest rate weakened during the week. The yield of 10-year US bonds fell 15bp to 2.78% from 2.93%. Gold hit the support level of US $1800 / ounce and rebounded to the bottom. In the future, with the decline of US inflation and the improvement of employment, 10Y US bonds may have peaked by 3%, and the upward range is limited, which partially alleviates the pressure above the gold price. ② Inflation expectation: implicit inflation expectation within the week was – 14bp to 2.55%, inflation expectation peaked and fell, and the real interest rate was – 1bp to 0.23%. The crude oil commodity chain is still greatly affected by geopolitics, with repeated outbreaks in some regions, the global economy may face stagflation risk, and the price of precious metals is resilient. 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.
Industrial metals: the reduction of LPR catalyzes the rebound of copper and aluminum prices, and the valuation of industrial metals in the real estate chain is facing revision. (1) Copper: ① macroscopically, the high level of US dollar and US debt fell, the national mortgage interest rate was lowered by 35bp, which opened the prelude to stable growth confidence. The subsequent recovery of real estate and infrastructure consumption is worth looking forward to; ② In terms of supply, China’s centralized maintenance still interferes with supply. Recently, the import price comparison has been repaired rapidly, the import window has been opened, and the inventory in the bonded area has been in a net inflow state for three consecutive weeks, which verifies the strong supply and demand structure of China; ③ In terms of demand & inventory, according to SMM research, the operating rate of copper enterprises increased by 2.06% to 65.69% this week, and the operating rate continued to repair. The 5-year LPR was lowered by 15bp. It is expected that the improvement of consumption month on month will lead to the upward repair of metal prices. The upward repair range needs to be verified by tracking the operating rate, orders and other high-frequency data of copper enterprises. (2) Aluminum: ① in terms of cost: the net profit per ton of prebaked anode increased by 9 yuan / ton to 1698 yuan / ton, the price of thermal coal increased from 831 yuan / ton to 838 yuan / ton, the price per ton of alumina decreased slightly during the week, and the profit level of single ton of electrolytic aluminum (self owned power plant) increased by 561.9 yuan / ton to 2215 yuan / ton during the week; ② Supply: at present, China’s operating capacity is 40.546 million tons, with an operating rate of 87.67%. Due to the shutdown accident of aluminum plant, the supply side decreased slightly this week; Sweden and Finland officially announced that they would apply to join NATO, and the negotiations between Russia and Ukraine stalled, which once again triggered overseas energy concerns. The price of natural gas rose, the production capacity in Europe has been reduced, and it is difficult to resume production. LME aluminum inventory continued to drop, and the price of external aluminum led the rise; ③ In terms of demand & Inventory: the epidemic situation in Shanghai is facing a substantial improvement. The repeatability of the epidemic situation has affected some parts of Henan to a certain extent. Waste aluminum is limited, the substitution of primary aluminum is increased, and the improvement of consumption is accelerated month on month. China’s industrial support policies and LPR reduction have made the market’s expectations for the recovery of later consumption better, the overseas supply gap continues, and the aluminum price is easy to rise but difficult to fall in the short term. Suggestions and concerns include the following: the ‘ China Molybdenum Co.Ltd(603993) , Tianshan Aluminum Group Co.Ltd(002532) etc.
Energy metals: EV’s resumption of work and production has been steadily promoted, and the demand and valuation of energy metals are up for repair. (1) Lithium: this week, the price of battery grade lithium carbonate increased by 962 yuan / ton to 476400 yuan / ton, and battery grade lithium hydroxide (micro powder) was the same as last week at 494800 yuan / ton. ① Cost: this week, the price of spodumene increased by 500 US dollars / ton to 4350 US dollars / ton (CFR, excluding tax), and the profit space of battery grade lithium carbonate decreased by 22500 yuan / ton to 169300 yuan / ton. The profits of the industrial chain continue to transfer to the resource side, and the profit space of the smelter continues to be compressed. ② In terms of supply, the output of lithium carbonate this week was 5220 tons, up from + 110 tons last week. Lithium resources were tight, the increment of manufacturers at the mine end was limited, and the production capacity at the salt lake end was saturated. Although the supply was slightly relieved, the large manufacturers mainly maintained long-term cooperative customers, and there were basically no export retail orders and large shipments on the market. The leading manufacturers that reduced the amount of maintenance in the early stage gradually recovered. This week, the output of lithium hydroxide was 4116 tons, with a month on month increase of + 607 tons. ③ In terms of demand & Inventory: the edge of anti epidemic is better, Saic Motor Corporation Limited(600104) has achieved continuous and stable production, and Tesla has reached the full production level of a single shift. In April, affected by the epidemic, the production and sales of the industry bottomed out, and many places began to introduce subsidy policies to promote automobile consumption. The EV supply chain system ushered in the upward repair of domestic demand. In May, mainstream cell factories began to raise the battery production target, with a month on month ratio of + 4.5% / + 2gwh. Affected by the epidemic, the replenishment period of cathode material factory has been postponed. At present, the inventory has bottomed out. With the recovery of industrial chain demand, a large amount of replenishment demand is gradually ushered in. Although the output of lithium carbonate and lithium hydroxide increased this week, the demand margin was better, and the inventory was basically stable. On the whole, the tight supply situation in the medium term still exists. (2) Nickel: SHFE nickel rose 4.52% to 212800 yuan / ton this week, and the price of nickel sulfate was the same as last week at 43500 yuan / ton; The price of high nickel iron fell 0.93% to 1600 yuan / nickel during the week; Cngr Advanced Material Co.Ltd(300919) announced this week that it plans to invest and build 120000 tons of nickel pyrometric high matte nickel project in Indonesia. The supply of intermediate products is becoming more and more abundant, the production cost of nickel sulfate is declining, the economy of nickel bean production of nickel sulfate is declining, and the output of nickel sulfate is low under the pressure of profit. Downstream precursor enterprises are waiting for the price correction to purchase on demand, and the price reduction attitude is obvious. Due to the impact of the epidemic, the consumption and output are still slowly repaired, and the demand for nickel sulfate has not been significantly improved. (3) Cobalt: as of Friday, China’s Electrolytic Cobalt fell 2.91% to 500000 yuan / ton, and cobalt sulfate fell 4.85% to 98000 yuan / ton during the week. After excluding cobalt raw materials this week, the profit margin of cobalt sulfate processing decreased by 1400 yuan / ton to -62100 yuan / ton during the week. The output of cobalt sulfate has declined for four consecutive weeks, and the decline in profits has led enterprises to choose to reduce the load of devices or shut down for maintenance. Poor digital consumption leads to no recovery in procurement. Recently, precursor enterprises mainly consume inventory and reduce outsourcing. 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) , etc.
Risk tips: the global economic recovery is less than expected, the global epidemic development is more than expected, political risks, etc.
