Tight supply situation does not change Cobalt and Lithium prices continue to rise [Agency Review]

Main points:

Last week, non-ferrous metals outperformed the market, down 0.38%. Among the sub-plates, the top three gainers were aluminum plate, Shanghai and Shenzhen 300 plate and new metal material plate III, with increases of 4.66%, 3.14% and 1.16%, respectively. In addition, the top three declines were other small rare metal plates, tungsten plates, and non-metallic material plates, with decreases of 4.07%, 3.70% and 3.33%, respectively.

Basic metal

In the last cycle, the market for base metals is mixed. Futures market: LME copper, zinc, lead and tin rose 0.39%, 4.51%, 4.44% and 0.05% compared with the same period last week; aluminum and nickel fell 0.19% and 1.2% compared with the same period last week. Domestic spot market: copper, aluminum, zinc and lead rose by 0.03%, 0.48%, 2.12% and 1.63 respectively, while the nickel and tin divisions fell 2.29% and 0.17%. Copper: copper prices adjusted slightly last week. Supply-side disruption, due to logistics disruptions, the world's ninth-largest copper mine LasBambas will stop production in mid-December, the exact timing of resumption of production is unknown. In addition, there are frequent outbreaks in South Africa, the impact of mutated strains on mine development business remains to be observed, and the uncertainty on the supply side still exists.

On the demand side, the domestic market entered the long order transaction at the end of the year, and the performance of the spot market was relatively desolate.

On the inventory side, SHFE copper stocks stood at about 41400 tonnes, up 14.59 per cent from the same period last week.

Aluminum: aluminum prices continued to fluctuate last week, down from the previous week. The supply side is still restricted by policy factors such as energy consumption double control and environmental protection production restrictions, the new and resumption production capacity of electrolytic aluminum is limited, while the frequent production reduction of aluminum plants leads to a continuous decline in the operating capacity of electrolytic aluminum. On the demand side, market consumption recovered after the impact of power cuts was alleviated, while aluminum price pullback led to a rebound in downstream replenishment sentiment. On the inventory side, inventories fell during the week but were limited. As of Friday, SHFE aluminium stocks were 321400 tonnes, down 4.05 per cent from the same period the previous week. Domestic supply is tight, inventory decline to form a strong support for aluminum prices, aluminum prices are expected to usher in a wavelet rebound under the fundamental repair.

New energy metal

Last week, the price of new energy metals was more divergent. Cobalt: cobalt prices rose steadily last week. As of last Friday, the spot cobalt price in the Yangtze River was 4820,000 yuan / ton, up 5.47% from last week. The overall price of cobalt salt is basically the same as the rise, the price of cobalt sulfate is 94,500 yuan / ton, and the price of cobalt tetroxide is 3505 thousand yuan / ton. The impact of the new mutant strain on the logistics supply in South Africa continues, the tight supply of cobalt resources is not reduced, and cobalt prices are expected to maintain an upward trend. Lithium: last week, the lithium salt market maintained a stable operation, and the price of lithium salt rose slightly. As of Friday, the price of lithium carbonate was 2.050 million yuan / ton, up 4.33% from the previous week; the price of lithium hydroxide was 189500 yuan / ton, basically the same as last week. The gas restriction policy in winter heating season in Qinghai has a certain impact on the local salt lake production, and the tight situation of domestic lithium salt supply remains unchanged. On the demand side, at the same time, the boom of new energy vehicles continues. From January to November this year, domestic production and sales of new energy vehicles reached a new high, with a cumulative output of more than 3 million. In the context of the continuous expansion of production and marketing of new energy vehicles, the market demand for lithium salt continues to improve, and lithium prices are expected to remain high.

Precious metal

Last week, the overall operation of precious metals was weak, and prices fell. Gold: as of Friday, COMEX gold was at $1783.1 an ounce, down 0.04% from last week, while spot gold in London was $1779.8 an ounce, up 0.69%. Silver: COMEX silver price is US $22.22 / oz, down 1.55% from last week; spot silver price in London is US $21.90 / oz, down 2.04%. The United States announced that the number of non-farm payrolls in November was far lower than expected, and the recent overseas epidemic led to panic, supporting gold and silver. At present, inflation remains high, the market is expected to increase the scale of US debt contraction and early interest rate hikes, and gold prices are expected to remain volatile in the short term. Suggested attention: Chifeng Gold, Yintai Gold, Shengda Resources.

Risk hint

The demand is lower than expected; the upstream mine exceeds the expected supply; the risk of policy change.