1. The mismatch between supply and demand continues, and aluminum prices continue to rise. Under the mismatch between supply and demand, the prices of alumina and electrolytic aluminum have continued to rise recently. As of February 11, 2022, the price of alumina was 3258 yuan / ton, a weekly increase of 2.5%, a year-on-year increase of 35.2%; electrolytic aluminum price was 22922 yuan / ton, a weekly increase of 6.6%, a year-on-year increase of 48.1%. The main reason for the upward price of aluminum is that the global supply of aluminum products is limited under the influence of carbon neutralization. In foreign countries, under the influence of carbon neutralization and limited supply of natural gas in Russia, natural gas prices in Europe have risen sharply, and electricity prices have been rising. As of February 12, 2022, the continuous settlement price of UK natural gas futures closed at 185.86 pence per som, up about 318.3 per cent from the same period last year. The rise in electricity prices has increased the production costs of aluminum enterprises, and various manufacturers have issued production reduction plans one after another. Domestically, Shandong, Xinjiang, Inner Mongolia and other major aluminum production provinces focused on restrictions on high energy consumption industries such as electrolytic aluminum in the fourth quarter of 2021, resulting in a 3.5% drop in electrolytic aluminum production in the fourth quarter compared with the same period last year. In addition, the continuous development of the construction real estate, transportation and power industries downstream of aluminum has led to a further increase in aluminum consumption, which has also contributed to the rise in aluminum prices. Looking ahead, aluminum prices are expected to continue to rise. In the short term, the supply of electrolytic aluminum is still tight, the production reduction of foreign aluminum plants is still continuing, and most of the electrolytic aluminum production capacity has not resumed under the control of domestic policies. In the long run, the lightweight demand for cars driven by new energy vehicles and the continuous construction of UHV projects during the 14th five-year Plan period will lead to the growth of aluminum demand, and aluminum prices are expected to continue to rise under the mismatch of supply and demand.
two。 Over the past week, most of the prices of major non-ferrous metals have risen, with neodymium oxide up 10.0% and SHFE lead closing down slightly. As for neodymium oxide, as of February 11, 2022, the price of neodymium oxide was 1.16 million yuan / ton, a weekly increase of 10.0%. The main reason for the rapid rise in neodymium oxide prices is that there are index restrictions on the supply of rare earths and the rapid development of the downstream new energy industry has led to an increase in demand for rare earth permanent magnets. As for metal lead, as of February 11, 2022, the settlement price of SHFE lead futures in the domestic market was 15000 yuan / ton, down 0.1% a week. The slight decline in domestic lead prices is mainly affected by low demand and loose supply in the lower reaches of the post-holiday period.
3. The year-on-year growth rate of CPI in the United States is the highest in nearly 40 years, and high inflation will continue to drive gold prices up. On February 10th, US CPI data released that US CPI rose 7.5% in January 2022 from a year earlier, the highest level since August 1982. Loco-London gold prices fluctuated sharply before and after the data were released, and then began to strengthen. As of February 11, 2022, COMEX gold futures closed at $1858.9 an ounce, up 2.8 per cent a week. It is expected that the price of gold will rise further against the background of high inflation in the current market.
4. Market review. Of the nine CITIC non-ferrous metal subplates, eight rose throughout the week and one fell. Among them, the aluminum plate rose the most, rising 10.4%, while the lithium plate fell the most, falling 1.5%. In terms of individual stocks, the top three weekly gains were Jixiang shares, Yunnan Aluminum shares and Guocheng Mining, with weekly increases of 25%, 24.3% and 24.1% respectively, while Hesheng shares, Yinbang shares and Lizhong Group fell by 15.1%, 10.7% and 10.7% respectively.
Investment suggestion
In the context of rising aluminum prices and record global inflation, electrolytic aluminum and gold producers may benefit, such as Chifeng Gold, Zijin Mining, Nanshan Aluminum and so on.
Risk hint
Aluminum enterprises in Europe and the United States have reduced production less than expected, repeated international epidemics, changes in safety and environmental protection policies, and so on.
