Hua'an Securities Nonferrous Metals Industry Weekly report: supply disturbance boosted aluminum prices and reserve sentiment led to soaring lithium prices.

Main points:

Non-ferrous metals outperformed the market this week, down 5.39%. Over the same period, the Shanghai Composite Index fell 1.65% to close at 3579.54 points, the Shenzhen Composite Index fell 3.46% to close at 14343.65 points, and the Shanghai and Shenzhen 300 index fell 2.39% to close at 4822.37 points.

Basic metal

The overall cash market for base metals this week is relatively strong.

Futures market: LME aluminum, tin, nickel, copper, zinc, lead rose 3.82%, 2.56%, 1.29%, 0.63%, 0.45%, 0.35% compared with the same period last week.

Domestic spot market: aluminum, zinc, tin and nickel rose 4.52%, 2.70%, 1.18% and 0.10% respectively, while copper and lead fell 0.58% and 0.32% compared with last week.

Copper: copper prices fluctuated slightly this week. On the supply side, the overall supply of copper concentrate is loose and there is some disturbance. Kazakhstan has entered a state of emergency and has not yet affected the transportation of local copper mines. On the demand side, the domestic market consumption is still resilient, downstream power production restrictions have ended, the operating rate of processing enterprises has gradually increased, and some smelters have rushed to production at the end of the year. As of Friday, SHFE copper stocks stood at about 29200 tonnes, down 23.57 per cent from the same period last week.

Aluminum: aluminum prices are on an upward trend this week, up 4.52% from the same period last week. As the European energy crisis continues to ferment, the rising cost of natural gas and electricity in Europe has prompted a number of local aluminum plants to plan to reduce or stop production, which currently has a production capacity of about 800000 tons. In terms of domestic supply, Guangxi Duodi Aluminum Plant speeds up the resumption of production, but the short-term increment is limited. On the demand side, the domestic downstream market consumption weakens, and the epidemic situation in many places aggravates the superimposed Winter Olympic Games production restrictions, and pre-festival consumption may further weaken. On the inventory side, SHFE aluminium stocks stood at 314900 tonnes as of Friday, down 2.69 per cent from the same period last week. Suggested attention: Zijin Mining, Luoyang Molybdenum Industry, Yunnan Aluminum Co., Ltd., Shenhuo Co., Ltd., Nanshan Aluminum Co., Ltd., Mingtai Aluminum Co., Ltd.

New energy metal

The price of new energy metals is more divergent this week.

Cobalt: cobalt prices have risen steadily this week. As of Friday, the spot cobalt price in the Yangtze River was 4970,000 yuan / ton, up 0.40% from last week. The price of cobalt salt showed an upward trend as a whole. The price of cobalt sulfate was 10500,000 yuan / ton, up 1.94% from last week; and the price of cobalt tetroxide was 3985000 yuan / ton, up 1.27% from last week. The cost of cobalt raw materials continues to rise, the production enthusiasm of smelters is not high, overseas transportation is limited, and the shortage of cobalt raw materials continues. With the advent of the Spring Festival at the end of the year, terminal stock volume may increase, and cobalt prices are expected to rise steadily.

Lithium: the lithium salt market has maintained a stable operation this week, and the price of lithium salt has risen. As of Friday, the price of lithium carbonate was 2990 million yuan / ton, up 15.00% from the same period last week; the price of lithium hydroxide was 225,500 yuan / ton, up 4.64% from the same period last week. In winter, the output of mines and salt lakes is limited, and the operating rate of smelters is on the low side. The stock in advance of the trade festival is basically completed, and the market trading volume near the Spring Festival has decreased, and the high lithium price is expected to maintain a stable operation. It is suggested to focus on: Huayou Cobalt Industry and Hanrui Cobalt Industry, which are the targets of the integrated layout of cobalt industry; Ganfeng Lithium Industry, Tianqi Lithium Industry, the leading enterprises with high self-sufficiency rate of lithium resources; Salt Lake Lithium related targets: salt Lake shares, Tibet Everest, Tibet Mining, medium Mine Resources; Lithium Mica related targets: Yongxing Materials, Jiangdian Special Machinery; spodumene related targets: Sichuan Energy Power.

Precious metal

The precious metals as a whole fluctuated downwards this week. Gold: as of Friday, COMEX gold was at $1796.5 an ounce, down 1.86% from last week; spot gold in London was $1792.6 an ounce, down 1.51% from last week. Silver: COMEX silver price is 22.39 US dollars per ounce, down 4.15 per cent from last week; spot silver price in London is 22.24 US dollars per ounce, down 3.66 per cent. The global epidemic continues to disturb the precious metals market, inflation may continue to strengthen, and the minutes of the Fed meeting send a hawkish signal that gold prices are under pressure to raise interest rates and shrink the table ahead of time. Suggested attention: Chifeng Gold, Yintai Gold, Shengda Resources.

Risk hint

Demand is lower than expected; the European energy crisis continues to ferment; the risk of policy change.