Core view
\u3000\u30001. The price of zircon sand continues to rise and is currently at an all-time high. Since 2021, the price of zircon sand has entered an upward channel. According to wind data, as of May 19, 2022, the price of zircon sand was 20000 yuan / ton, with a year-on-year increase of 65.7%, 19.0% since the beginning of the year and 104.6% since 2021. The long-term demand for new materials in the downstream is clear, driving the continuous growth of the demand for quartz sand. According to Baichuan Yingfu, the apparent consumption of zircon sand in China in 2021 was 1.642 million tons, a year-on-year increase of 15.0%. Zircon sand is the raw material of zirconium series new materials such as zirconium oxychloride, zirconium dioxide and zirconium silicate. It is mainly used in ceramics, casting, refractories and other fields. Ceramic materials are the main application fields of zircon sand. Among them, advanced ceramic materials are widely used in aerospace, mechanical engineering, auto parts, military, biomedicine and other fields. According to wind data, the export volume of China's ceramic products in 2021 was 18.65 million tons, a year-on-year increase of 5.5%. In the future, with the further development of advanced ceramic materials, the demand for zircon sand is expected to continue to increase. Import dependence is high, and the supply pattern is tight for a long time. China's self-sufficiency capacity of zircon sand is relatively limited. According to Baichuan Yingfu, China's import volume of zircon sand in 2021 was 1285000 tons, and the output was 372000 tons. About 78.3% of the consumption needs to be met by import, which is highly dependent on import. RBM, one of the world's largest zirconium mines, had a great impact on the global zirconium supply after it stopped production due to the riots in South Africa last May. Although production has resumed at present, the global supply and demand pattern of zirconium is still relatively tight. In addition, China's Zircon sand production capacity is less likely to increase. According to Baichuan Yingfu, China's Zircon sand production capacity has been maintained at 1036000 tons since 2017. Combined with the current situation of China's mineral resources, it is less likely to increase zircon sand production capacity in the future, and China's Zircon sand supply pattern continues to be tight. The short-term supply is limited, and the medium and long-term demand is relatively clear. Riots in South Africa are still frequent, and the instability of global zirconium supply has intensified. In the medium and long term, driven by the development of 5g and aerospace, the demand for zircon sand as an advanced ceramic material is still relatively clear.
\u3000\u30002. Among the main non-ferrous metals, LME aluminum rose 7.6% and cobalt sulfate decreased. In terms of LME aluminum, as of May 20, 2022, LME aluminum reported US $2931 / ton, with a weekly increase of 7.6%. The main reason for the rise in LME aluminum price is the recent disturbance of bauxite export in Indonesia; In terms of cobalt sulfate, as of May 20, 2022, cobalt sulfate reported 98 yuan / kg, with a weekly decline of 4.9%. The main reason for the decline of cobalt sulfate price is that there is less demand for cobalt salt downstream.
\u3000\u30003. The dollar index fell and gold prices rebounded. In terms of the dollar index, as of May 20, 2022, the dollar index reported 103.03 points, down 1.42 points this week. The US dollar index is facing the highest short-term pressure since February 2002, mainly due to the recent adjustment of the US dollar index; Secondly, affected by the slowdown of US economic recovery, US GDP fell by 1.6% month on month in the first quarter of 2022. Affected by the downward trend of the US dollar index, the gold price rebounded. As of May 20, 2022, the closing price of Comex gold futures was US $1836.3/oz, up 1.3% on a weekly basis.
\u3000\u30004. Market review. In terms of sub sectors, the non-ferrous metal sub sector rose across the board. The top three sectors were tungsten, lithium and aluminum, with increases of 11.6%, 11.1% and 8.4% respectively. The top three weekly increases were Sunstone Development Co.Ltd(603612) , Guangdong Hoshion Aluminium Co.Ltd(002824) , Jiangsu Lidao New Material Co.Ltd(603937) , with weekly increases of 40%, 37.5% and 22.2% respectively; The companies whose share prices fell compared with last week were Guocheng Mining Co.Ltd(000688) , Yintai Gold Co.Ltd(000975) , with weekly declines of 4.2% and 2.5% respectively. The share price of ST Jintai was flat compared with last week.
Investment advice
The demand for advanced ceramic materials continues to increase, and relevant enterprises in the zirconium industry may benefit, including: Sanxiang Advanced Materials Co.Ltd(603663) , Shenghe Resources Holding Co.Ltd(600392) , Guangdong Orient Zirconic Ind Sci And Tech Co.Ltd(002167) .
Risk tips
The risk of aggravation of the epidemic, the risk of natural disasters and the release of zirconium production capacity are higher than expected.
