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[SMM Metal Breakfast] the general rise of metals * large-scale profits from aluminum smelting * Zinc prices are easy to rise and difficult to fall in the medium and long term.
Jul 30,2020 06:47CST
translation
Source:SMM
[SMM Metal Breakfast] Metal general rise * large-scale profits from aluminum smelting * Zinc prices are easy to rise and difficult to fall in the medium and long term * exports of magnesium ingots decreased by about 30% in June * Gold price correction took advantage of the opportunity to get on the bus or leave the market to avoid risk? * global debut of new corrosion-resistant rail products for high-speed railway in Baosteel * Rio Tinto: first-half net profit of US $3.32 billion down 20% from the same period last year
The content below was translated by Tencent automatically for reference.

The Federal Reserve keeps loose and expects the outer disk metal to rise to a new low in the dollar index.

[macro outlook] pay attention to the initial value of the actual annualized quarterly rate of GDP in the United States in the second quarter.

Today's focus

[how does the epidemic continue to ferment the stock prices of large overseas copper mining companies? from the stock prices of listed companies of large copper-related mining companies in the past six months, it is not difficult to see that since the concentrated outbreak of the overseas epidemic in mid-late March, the share prices of almost all listed overseas mining companies have fallen, while as a number of stimulus policies have been introduced by various countries to rescue the market and the epidemic has been gradually brought under control, the share prices of listed companies of major mining companies have begun to rebound to varying degrees. Some have recovered or even exceeded the level before the epidemic. "check the details."

[copper production in the first quantum second quarter was basically the same as that in the same period last year. Gold production fell 8.4% compared with the same period last year.] first Quantum announced its second-quarter results and production report yesterday. During the reporting period, the company produced 169059 tons of copper, basically the same as the same period last year. 168399 tons in the same period last year; copper sales increased slightly to 159944 tons, up slightly from 149333 tons in the same period last year. Gold production was 54651 ounces, down 8.4% from a year earlier, compared with 59647 ounces in the same period last year; gold sales were 54591 ounces, compared with 56922 ounces in the same period last year.

[southern Copper's copper production fell 1.3 per cent in the second quarter compared with the same period last year] during the reporting period, the company's copper production fell 1.3 per cent year-on-year to 253097 tons, mainly due to the decline in Buenavista copper grade. At the same time, the production of Cuajone copper mine has increased significantly, mainly due to the improvement of ore grade and recovery. In the first half of 2020, copper production in the southern copper industry increased by 2.1% to 484981 tons compared with the same period last year.

[large-scale profitability of the aluminum smelting industry] although the overall situation of the aluminum smelting industry has continued to improve recently, in view of the further increasing pressure on the supply of domestic aluminum products, domestic consumption is still in a state of recovery and there is an overdraft phenomenon. In addition, the overseas epidemic situation has not been effectively controlled, the export of aluminum products may decline further, and the rate of destocking has slowed down significantly. Therefore, it is initially expected that for some time in the future, the aluminum smelting industry will pick up quickly in the "cold" range, and will return to the "normal" range, but at the same time continue to improve the foundation to be consolidated. "check the details.

[Rusal: sales of "green aluminum" will reach 3.5 million tons / year by 2025) (Rusal), a Russian aluminum company, said that it is expected that the global supply of "green aluminum" will exceed 10 million tons / year next year, and its "green aluminum" sales will reach 3.5 million tons / year by 2025. The 3.5 million-ton volume means the company can sell it as a separate asset class, which could then be the cheapest green aluminum product on the market. Green carbon aluminium has strict restrictions on carbon dioxide emissions, carbon emissions per ton of aluminum production can not exceed 4-7 tons.

[the list of the first batch of options market makers of aluminum and zinc varieties published in the previous issue] the Shanghai Futures Trading issued a notice saying that according to the relevant provisions of the measures for the Administration of Market makers of the Shanghai Futures Exchange, after strict evaluation, publish the list of the first batch of options market makers of aluminum and zinc varieties. "check the details."

[production situation of overseas zinc enterprises in the second quarter of 2020 (1)] the preliminary arrangement of SMM shows that the output of 2020Q2 zinc mine has dropped by 127600 tons compared with the same period last year and 123000 tons from the previous month, and there has been no more-than-expected reduction for the time being. At present, most mines have resumed normal production, and some companies have plans to make up for part of the missing production, but some of the reduced production mines have not yet announced their plans to resume production, and it is expected that the overseas zinc mine output Q3 will be difficult to return to the optimal level for the time being. However, the dark time of zinc ore supply has passed, and it is expected that there is still room for upside in domestic zinc ore processing fees in the third quarter. In the follow-up, SMM will continue to track the output of overseas companies. "check the details."

[SMM brief review: consumption of zinc in Shanghai is up nearly 3%, zinc price is easy to rise and difficult to fall in the medium and long term] SMM believes that, from a fundamental point of view, the current galvanized terminal orders have improved, superimposed die-casting zinc alloy and zinc oxide export orders have improved, driving the removal of social inventory, zinc consumption gradually recovered in the second half of the year, long-term consumption is worth looking forward to. Overall, in the context of macro water release, superimposing the recovery of long-term consumption, in the medium to long term, zinc prices are easy to rise but difficult to fall. "check the details.

[SMM brief comment: Canada's anti-dumping on Taiwan's hot-rolled steel plates may be bad for Taiwan's export market] according to the latest stainless steel import and export data released by the customs in June, SMM statistics show that the net export of stainless steel in June 2020 is about 45000 tons, down 63% from the previous month and 81% from the same period last year. Of this total, exports were about 224000 tons, down 29000 tons from May and 11.35 percent from the previous month. The import volume is about 179000 tons, an increase of 48000 tons over May exports, and an increase of 36.93% month-on-month compared with the previous month. Dint SMM believes that Canada's anti-dumping sanctions against Taiwan's hot rolling may be bad for Taiwan's stainless steel export market in the later period.

[Indonesian government: developing the downstream nickel to revive the economy] the Indonesian government has formulated an economic recovery strategy based on the mining industry, which is considered to be one of the most strategic policies in attracting investors to regard Indonesia as an investment destination. One that is currently being added is the downstream of nickel, which can provide significant added value by processing nickel ore into stainless steel plates. Indonesian Minister of Ocean and Investment Coordination Luhut Binsar Pandjaitan said that in the past, the annual export value of raw nickel ore was US $612 million, but now the export value of downstream nickel products such as ferronickel and stainless steel is US $6.24 billion. "check the details."

[Shanxi will select environmental protection "top-notch enterprises" for normal production in heavy pollution weather in 39 industries. News from the Shanxi Provincial Department of Ecological Environment, according to the level of green development, pollution control investment, treatment effectiveness, environmental credit, and so on, Shanxi Province will grade enterprises at A, B, C, D levels, implement performance classification, and implement differentiated emergency emission reduction measures in heavily polluted weather according to the classification situation. This means that enterprises with a high level of green development, large investment in pollution control, good control results and high environmental credit can produce normally in heavily polluted weather. "check the details.

[SMM analysis: magnesium ingot exports decreased by about 30% in June, total magnesium product exports decreased by nearly 50% compared with the same period last year] data from the General Administration of Customs show that China's total magnesium product exports in June 2020 were 20% lower than the previous month and 44.4% lower than the same period last year. Since March, affected by the overseas epidemic situation, the export volume of magnesium ingots and downstream magnesium products in China has continued to decrease. Export restrictions on magnesium ingots were evident in the June data. China exported 11813.47 tons of magnesium ingots in June 2020, down 27% from the previous month and 42% from the same period last year.

[SMM statistics: the total export volume of domestic electrolytic manganese and manganese products decreased by 14.13% in the second quarter of 2020 compared with the first quarter] SMM statistics domestic unwrought manganese; scrap; powder and forged manganese total export volume was 23727.38 tons in June 2020, a decrease of 7.8% compared with the previous quarter. Among them, the export volume of unwrought manganese; scrap and powder was 22532 tons in June, a decrease of 7.39% compared with the previous month; and the export volume of forged manganese and manganese products was 1195.38 tons in June, a decrease of 14.42% compared with the previous month. In addition, China's exports of electrolytic manganese and manganese products in the second quarter of 2020 totaled 88323 tons, a decrease of 14.13% compared with the first quarter of 2020.

[SMM interview: gold price correction takes advantage of the opportunity to get on the bus or leave the market to avoid risk? The bulls left the market at a profit, and the price of gold rose and fell. Can the current bull trend of the precious metal market continue? Can I still get in the car? Will it attract hedging funds? SMM interviewed industry analysts on this, saying that after a brief correction in gold prices, the long-term upward trend will not change. "check the details."

Important news of metals and industry

[Ningxia aluminum output in the first half of the year increased by 22% compared with the same period last year] in recent years, the Ningxia aluminum industry has made great efforts to adjust the development mode, vigorously eliminate backward production capacity, strengthen energy-saving technological transformation, and rely on electrolytic aluminum to actively develop deep processing and extend the industrial chain. built today's flywheel hub 3 million pieces of automobile wheels, Jinning Juke 400000 tons of aluminum strip processing, Guangzhou Silver Aluminum 300000 tons of aluminum bar processing, Qinghai aluminum 150000 tons of plate and strip, and other production lines. Drive the transformation and upgrading of the aluminum industry. In the first half of 2020, the output of aluminum in the region increased significantly, with production of 277000 tons, an increase of 22 percent over the same period last year, and the deep processing rate of electrolytic aluminum rose to 47.4 percent, an increase of 9.3 percent over the same period last year.

[MMG lead concentrate production fell 9 per cent year on year in the second quarter. Zinc concentrate production increased 6 per cent year on year] recently, MMG released its second quarter results. During the reporting period, zinc concentrate production in the second quarter was 60100 tons, an increase of 6 per cent over the same period last year, while lead concentrate production was 10700 tons, down 9 per cent from the same period last year. Zinc concentrate production in the first half of 2020 was 113000 tons, down 1 per cent from the same period last year, while lead concentrate production was 20600 tons, down 9 per cent from the same period last year. Due to the continuing uncertainty of the epidemic, MMG estimates that the output of zinc concentrate in Dugald River mine will be 17-180000 tons in 2020, and that in Rosebery mine will be 5.5-65000 tons.

[Boliden's lead and zinc concentrate production increased by 12% in the second quarter compared with the same period last year] recently, Boliden released its second-quarter results. During the reporting period, lead concentrate production in the second quarter was 13800 tons, an increase of 12% over the same period last year; zinc concentrate production was 74000 tons, an increase of 12% over the same period last year; lead concentrate production in the first half of the year was 26400 tons, the same as in the first half of 2019, and zinc concentrate production was 137500 tons, down 3% from the same period last year. Zinc production increased significantly compared with the first quarter, and zinc production in the first quarter was mainly affected by the suspension of production at the Tara mine because of Covid-19.

[Teck zinc concentrate production dropped 48.91% in the second quarter compared with the same period last year and is expected to produce 31.5-345000 tons per year] recently, Teck released its second-quarter results. According to the report, zinc concentrate production in the second quarter was 94000 tons, down 48.91% from the same period last year. Zinc concentrate production in the first half of 2020 was 248000 tons, down 22.26% from the same period last year. The decline in zinc concentrate production was mainly due to the impact on Red Dog production and the temporary shutdown of Antamina mines in the second quarter. Teck expects zinc concentrate production to reach 31.5-345000 tons in 2020.

[Hyundai Iron: finished steel production fell 7.85% from 4.69 million tons in the second quarter] South Korean steelmaker Hyundai Steel (Hyundai) has announced its financial results for the second quarter of this year. Hyundai made a net loss of 13 billion won ($10.8 million) in the second quarter, compared with a net loss of 115 billion won in the first quarter and a net profit of 51 billion won in the second quarter of 2019, according to the report. Meanwhile, the company's sales revenue fell 11.8% month-on-month, down 26.2% from a year earlier to 4.11 trillion won (US $3.42 billion), while operating profit totaled 14 billion won (US $11.66 million).

[Daming International: sales and processing volume of Q2 stainless steel increased by 12.2% and 7.3% respectively over the same period last year] Daming International announced that during the period from April 1, 2020 to June 30, 2020, the group's total sales and processing volume of stainless steel processing services reached 510400 tons and 744200 tons respectively, up about 12.2% and 7.3% respectively over the same period last year. During the period from April 1, 2020 to June 30, 2020, the total sales and processing volume of the group's carbon steel processing services reached 815200 tons and 952200 tons respectively, an increase of about 16.1% and 14.2% respectively over the same period last year.

[Anglo American and Kumba will maintain 13 million tons / year iron ore production at Kolomela Mine] Kumba iron ore, majority-owned by Anglo American Resources Group (Anglo American), will continue the Kapstevel South project at the Colomera Mine in South Africa, which will ensure that Colome continues to produce ore with the remaining life of about 13 million tons per year. A spokesman for Anglo American said Colomera still has 13 years of mine life in its current reserves. Anglo American owns 69.7% of Kumba iron ore.

[Baosteel Co., Ltd.'s new corrosion-resistant rail products for high-speed railway have been launched globally, filling the international gap] Baosteel shares revealed that the company's corrosion-resistant rail U68CuCr for high-speed railway has recently achieved its global debut. The product achieves a good balance of rail mechanical properties, weldability and corrosion resistance, solves one of the key problems restricting the development of domestic railways, and has been successfully applied to the world's first designed high-speed rail undersea tunnel with a speed of 350 kilometers per hour.

[Italy: steel production will drop 15 per cent this year due to the epidemic] the chairman of the Italian Iron and Steel Federation-Federacciai said in an interview that due to the coronavirus pandemic and the decline in (AngelorMittal Italia) production and market demand in ArcelorMittal, Italy, especially in the automobile industry, steel production in the country is expected to fall by about 15 per cent this year. Italy has closed all steel mills except ArcelorMittal Italy and Arvedi since mid-March because it was the first country in Europe to be attacked by novel coronavirus. In 2019, Italian steel production fell 5.3 per cent year-on-year to 23.192 million tonnes, below the EU average of 4.9 per cent to 159.4 million tonnes.

[SMM special offer: gold may see $3000 in two years. Silver price is $90. Are you ready? Commodity prices, including crude oil, have risen sharply recently. if this situation continues, the world is bound to face high inflation, hyperinflation, or stagflation under the indiscriminate money issued by central banks, either of which is good for the price of gold. Therefore, by the end of 2022, the author estimates that the price of gold can rise to close to $3000. "check the details."

[Rio Tinto: first-half net profit of $3.32 billion down 20 per cent from a year earlier] Rio Tinto released its results for the first half of 2020, which showed that net profit fell 20 per cent to $3.32 billion, down from $4.13 billion in the same period last year. Underlying earnings fell 4 per cent to $4.75 billion in the first half, but beat analysts' forecasts of $4.09 billion. Rio Tinto's iron ore shipments increased by 3 per cent compared with the first half of 2019, driven mainly by strong Chinese demand and restrictions on seaborne supplies. Profit before basic interest, tax, depreciation and amortization was $7.7 billion, an increase of 2% over the first half of 2019.

The Anglo-American platinum industry said that although many areas were in the early stages of recovery, there was still a lot of uncertainty and limited visibility a few months later. Due to the impact of Covid-19, mine supply is expected to be greatly reduced this year, while the impact of global recovery is expected to be smaller. PGM demand will be affected by a decline in global car and commercial vehicle sales and production, weak platinum jewellery sales and weak industrial demand. Although demand has been affected, platinum, palladium and rhodium are expected to remain in short supply this year.

Macro focus

[Wu Zunyou: there is no exact relationship between the epidemic in Dalian and the epidemic in Beijing] according to Wu Zunyou, there has been no case of COVID-19 in Dalian for more than 100 days, and the virus must have come from outside. According to big data's analysis, there is no exact relationship between the epidemic situation in Dalian and the epidemic situation in Beijing. In addition, through big data's analysis, there is no sign that there is an exact relationship between overseas imported cases and Dalian. It is more likely to be the import of seafood from abroad, and the import of contaminated seafood is more likely.

[macro leverage slows in the second quarter, be vigilant against the risk of mismatch between credit and the real economy] recently, according to the report on the Macro leverage ratio of the second quarter of 2020 released by the National Finance and Development Laboratory (NIFD), the leverage ratio of China's real economy rose 7.1 percent in the second quarter of this year, to 266.4 percent from 259.3 percent at the end of the first quarter, which is significantly lower than that in the first quarter. "in terms of growth, the easing of the rising leverage ratio in the second quarter is mainly related to the steady recovery of China's economy." Liu Lei, a researcher at the National balance sheet Research Center of the National Finance and Development Laboratory, said that the economic growth rate changed from negative to positive in the second quarter, but the expansion rate of total debt, M2 and social financing stock of the real economy increased during the same period, which means that GDP played a greater role as the denominator of leverage ratio.

[general Administration of Taxation: 812.8 billion yuan of tax refund (exemption) for exports in the first half of the year] the State Administration of Taxation has learned that in the first half of this year, the country handled a total of 812.8 billion yuan of tax refund (exemption) for exports, effectively reducing the capital pressure of export enterprises and reducing the cost of capital of export enterprises. In March, the Ministry of Finance and the State Administration of Taxation issued a notice on increasing the export tax rebate rate of some products, increasing the export tax rebate rate of 1464 products. Among them, the export tax rebate rate for 1084 products has been raised to 13%. According to statistics, by the end of June, nearly 25000 export enterprises across the country have enjoyed this policy dividend, providing a strong supporting force for foreign trade enterprises.

[the 21st meeting of the standing Committee of the 13th National people's Congress [NPC] was held in Beijing from August 8 to 11. The 69th chairmanship meeting of the standing Committee of the 13th NPC was held at the Great Hall of the people in Beijing on the morning of the 29th, presided over by Chairman Li Zhanshu. The meeting decided that the 21st meeting of the standing Committee of the 13th National people's Congress will be held in Beijing from August 8 to 11. The chairmanship meeting suggested that the 21st meeting of the standing Committee of the 13th National people's Congress deliberate on the draft urban maintenance and construction tax law, the draft deed tax law, the revised draft law on the prevention of juvenile delinquency, the revised draft law on animal epidemic prevention, and the draft amendment to the copyright law.

Terminal information

[cost-cutting Toyota asks suppliers to lower prices] it is reported that Toyota will further launch cost-cutting programs. At the same time, in view of the further spread of the epidemic and the decline in raw material procurement costs and other reasons, Toyota asked some parts manufacturers to reduce the price of parts supply. At present, Toyota has put forward price reduction requirements to engine and other parts suppliers through documents and other means. Previously, Toyota adjusted prices with parts suppliers twice a year (April and October), but it was rare for Toyota to ask for a price cut halfway. The data show that Toyota has deals with about 40,000 companies, and the price cut is likely to have an impact on the earnings of a wide range of manufacturing companies.

[Musk: willing to provide batteries to other automakers] Tesla (Tesla Inc.) CEO Elon Musk (Elon Musk) said on Tuesday that Tesla is open to licensing software, powertrain and battery supply. Tesla has previously supplied batteries to Mercedes (Mercedes) and Toyota (Toyota Motor) through separate cooperation agreements. Analysts and industry officials say the US electric carmaker has a competitive advantage in battery manufacturing compared with traditional carmakers. "Tesla is open to licensed software, powertrain and batteries," Musk said on Twitter. We just want to accelerate the development of sustainable energy, not crush our competitors! "

[Chinese version of aluminum alloy "flood control artifact" unveiled in Wuhan) "the second flood of the Yangtze River in 2020" arrived at the three Gorges Dam, located in Wuhan, a key city in the middle and lower reaches of the Yangtze River, as an important hub for water conservancy operation connecting the Hanjiang River, Dongting Lake and Poyang Lake. it bears great pressure on flood control and flood fighting. On July 17, a brand-new aluminum alloy assembled flood control wall with a length of 858 meters and a height of 2 meters was put into use in the Yueliang Bay dike on the Wuchang River Beach, becoming a "flood control artifact" to alleviate the pressure of flood control in Wuhan. It is understood that the new flood control wall is widely used in more than 20 gates in Wuhan, designed and constructed by Wuhan Flood Control Survey and Design Institute, and aluminum profiles are provided by Guangdong Feng Aluminum Aluminum Industry Co., Ltd., with a supply capacity of 600 tons.

[BYD's cumulative promotion of pure electric commercial vehicles has shocked the launch of more than 70,000 new commercial vehicles] so far, BYD has promoted and applied more than 70,000 pure electric commercial vehicles around the world. Bus electrification has spread across six continents, more than 50 countries and regions, and more than 300 cities. It is the first Chinese car brand to enter Europe, the United States, Japan and other developed markets. As a staunch promoter of the industry, BYD commercial vehicles are playing a more and more important role in China and even the global automobile industry. Up to now, it has promoted and applied more than 70,000 pure electric commercial vehicles around the world, and bus electrification has spread to six continents, more than 50 countries and regions, and more than 300 cities. It is the first Chinese car brand to enter Europe, the United States, Japan and other developed markets.

[Volkswagen / Daimler / BMW will "show their skills" for the production capacity of soft-package batteries in China] at present, the development of the global new energy vehicle industry is in the ascendant, under the fierce electrification wave, the battle for power batteries among the major vehicle companies is also surging undercurrent. Recently, the three major European carmakers Volkswagen, Daimler and BMW have set off a frenzy to bind Chinese battery manufacturers. First, Volkswagen took the lead, investing 1.1 billion yuan to acquire 26.47% of Guoxuan Hi-Tech, making it its largest shareholder; then Daimler Trident attacked, subscribing 900 million yuan strategic investment Funeng Technology to participate in its Science and Technology Innovation Board IPO;, and then Wanxiang 123 was reported to have won 10 billion yuan power battery orders. Soft-pack batteries are favored by international mainstream car companies. Tesla's success brings pressure Hyundai launches electric car offensive

[Tesla's success brings pressure Hyundai launched an electric car offensive] after witnessing the rise of Tesla's electric vehicles, Hyundai, which has been paying attention to hydrogen-fueled vehicles, is also preparing to launch an electric car offensive. Hyundai plans to launch a production line next year and 2024 to produce electric cars, according to a notice from the union within Hyundai. Since May, Zheng Yixuan (Euisun Chung), head of Hyundai Group, has held several meetings with the heads of battery and electronic components manufacturers such as Samsung, LG Chemical and SK Group. According to industry insiders, the purpose of the meeting is to protect Hyundai's battery supply when competition for electric vehicles intensifies and battery supply is tight.

Related market

[since the beginning of this year, funds have purchased more than 2 billion yuan of debt] data show that as of July 29, a total of 82 fund companies have purchased a total of 2.184 billion funds, up 53.37 percent from 1.424 billion yuan in the same period last year. Among them, the self-purchase scale of debt base reached 1.154 billion yuan, accounting for more than 50%.

[the National Development and Reform Commission openly solicited opinions on the Coal Law of the people's Republic of China (revised draft) (draft for soliciting opinions)] the National Development and Reform Commission openly solicited opinions on the Coal Law of the people's Republic of China (revised draft) (draft for soliciting opinions). In this revision of the law, new provisions such as coal market construction and price mechanism are added, and it is proposed to establish and improve a unified and open, hierarchical, fully functional, competitive and orderly coal market trading system and a multi-level coal market trading system, as well as the mechanism for determining coal prices by the market, and market subjects should operate in accordance with the law and compete fairly. Optimize coal import and export trade in order to promote the establishment of modern coal market system, optimize and improve the efficiency of resource allocation.

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