Metal ushered in a rebound follow-up whether there is room for rise? [SMM parsing]

SMM survey: what kind of metal do you like most in 2022?

SMM12 March 23, the metal ushered in a rebound in recent days, Shanghai copper, Shanghai aluminum, Shanghai zinc, Shanghai nickel compete for three consecutive rises. As of today's close, Shanghai zinc is up 2.81%, Shanghai nickel is up 2.67%, Shanghai aluminum is up 2.24%, and Shanghai copper is up nearly 1%. What are the supporting factors behind the general strength of metals? Is there any room for growth? The latest ideas of SMM are as follows:

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Copper processing fees show a loose trend to guard against the risk of market pullback

Recent copper prices with the rise in zinc and aluminum, the overall center of gravity has shifted upward. According to SMM analysis, from a fundamental point of view, the domestic smelters and Freeport with Jiangxi Copper, Tongling Nonferrous, China Copper and Jinchuan Group as the core finally settled the copper concentrate processing fee for 2022 Benchmark at 65 US dollars / ton and 6.50 cents / lb, and Antofagasta also confirmed the Follow processing fee within a week, reflecting that buyers and sellers finally reached an agreement that the copper concentrate market in 2022 would be looser than in 2021., Las Bambas also recovered from the community road blockage. The story at the end of the mine basically comes to an end.

Although the domestic inventory shows a small state of destocking, but the smelter concentrated to catch up with production in December, the downstream is not willing to purchase under financial pressure, and the follow-up may turn to a cumbersome state. Overall, in the macro-level is still under pressure, copper is not affected by the energy problem, basically belong to the rising variety, guard against the risk of market pullback.

On the spot side, the spot price of Shanghai copper continues to decline, rising water is falling rapidly, the market is rising and superimposing most of the market participants have begun to finish their work, and the overall trading is very light, leading to a further increase in the willingness of consignors to exchange cash. The market was red on the 3rd, and today it broke through 69700 yuan / ton, so that the already inactive downstream was restrained again, the mood of the holders to sell goods was high, and the rising discount showed a straight-line downward probe, in addition, near the end of the month, the quotation of next month's ticket gradually increased, and the price difference between next month's ticket and that month's ticket continued to widen at about 100 yuan / ton, which continued to drag down the quotation of the monthly ticket. SMM expects that the market demand for that month's tickets will be less and less, the market turnover will decline with the day, and there is still some room for decline in the price of rising and sticking water.

View SMM copper spot quotation

The high risk of internal and external linkage of aluminum price still needs to be vigilant against the mitigation of natural gas situation and the effect of energy supplement in the future.

The trigger for this round of metal price rise is the surge in natural gas and electricity prices caused by the natural gas gap in Europe, and the main logic is that overseas aluminum prices drive higher at home.

From a global point of view, the power shortage in Western Europe is expected to affect less than 6% of global production capacity, and the actual production limit is even lower. The expected production reduction is less than 500000 tons, which is still lower than the scale of new production capacity outside China in 2022. The total new capacity outside China and Western Europe is expected to be more than 800000 tons in 2022. SMM expects that overseas, at current supply and demand levels, there will be no systematic shortage of aluminum ingots overseas. And the short-term shortage of aluminum ingots in Western Europe can be replenished by inventories in other regions.

On the domestic side, electrolytic aluminum is still in the de-storage stage near the end of the year. This week SMM counted that the social inventory of electrolytic aluminum decreased by 46000 tons to 864000 tons compared with last Thursday. It is expected that in mid-late January, domestic electrolytic aluminum will enter a cyclical accumulation pool.

In terms of price, the short-term internal and external aluminum price resonance linkage may continue, but the high risk remains, so we need to guard against the easing of natural gas tension in the future, as well as the emergence of complementary effects in other areas with lower energy costs.

Spot, December 23, SMM statistics of domestic electrolytic aluminum social inventory of 864000 tons, weekly reduction of 46000 tons, Wuxi, Nanhai and other major consumer areas mainly contributed to the warehouse, Gongyi area inventory increased slightly. Inventory is down 27000 tons from Monday, and the reduction in arrival in Wuxi mainly goes to the warehouse.

View SMM aluminum spot quotation

Under the background of high electricity prices in Europe, zinc prices are easy to rise and difficult to fall.

Recently, zinc prices in the two cities have risen again, hitting a two-month high. SMM believes that it is mainly due to the further fermentation of energy shortages in Europe, with natural gas and electricity prices rising by more than 20%, both of which are at record highs. At the same time, the low processing fees caused by the shortage of zinc mines have pushed up the production costs of smelters. In this case, last week Nyrstar's Auby zinc project will also be overhauled from the first week of January 2022. Against the grim background of Europe's energy problems, the market has triggered supply concerns, boosting the two markets of zinc; however, the pattern of being strong outside and weak inside continues. Although the domestic supply side has recently reduced production in Shaanxi, Guangxi and other places due to environmental protection incidents, there has been no further reduction in smelter production due to energy problems for the time being.

At the same time, consumption has entered the off-season in China, environmental protection in the north is constantly disturbed by production restrictions, and galvanizing enterprises are restricted to start work. At the same time, die-casting and zinc oxide are also entering the off-season. Near the end of the year, enterprises are also taking back funds, intentionally reducing production and slowing down the removal of social inventory. As a whole, the country is in a weak supply and demand situation, leading to a decline in internal and external price comparisons. In terms of price, in the context of high electricity prices in Europe, zinc prices are easy to rise and difficult to fall, and we still need to pay attention to the further developments of overseas refineries.

On the spot side, on December 23, the price of zinc in Shanghai rose sharply, near the end of the long order. Supported by the demand for replenishment, the average price of this month's ticket rose slightly, but the downstream pick-up was weak, and the rising water was weak. Entering the second period, the rising water was maintained, and the 2201 contract for ordinary zinc ingots was quoted at 20 yuan / ton. On the whole, today's monthly ticket is mainly supported by long order demand, and the rising water of the average price has warmed up, but downstream enterprises have a poor willingness to receive goods at high zinc prices, which leads to weak rising water in the market. In addition, due to the large monthly difference in recent and distant months, the average monthly ticket price of the market next month is quoted at a discount of 20,040 yuan / ton, with few transactions. On the whole, today's turnover is light.

View the spot quotation of SMM zinc

The price of nickel rebounded sharply this week, but it was still difficult to get rid of the shock pattern a year ago.

From the perspective of current nickel fundamentals, low inventory and weak consumption are intertwined, and the difference between long and short nickel is still obvious. As a result, nickel prices have fluctuated widely for nearly two months.

Although the price of nickel has risen sharply in the past two days, it is still in the concussion range from the monthly cycle, and does not break through the high level of the previous range.

From the supply side, domestic nickel raw materials changed little in December, basically maintaining stable expectations.

Imports depend on domestic demand, so the contradiction mainly exists in downstream consumption. Downstream, we look at it in two aspects:

1. In December, stainless steel maintained a weak operation trend, and the demand was poor, so for raw materials, the pressure increased, the price of ferronickel fell all the way to 1250 yuan / nickel ton, and the lower limit of nickel price moved down.

two。 In the direction of new energy, in December, precursor enterprises have destocking demand, raw material demand weakens, and the low price of nickel sulfate has fallen to 34000 yuan / ton. Therefore, from a comprehensive point of view, the weakening edge of the demand side is difficult to support the upward price of nickel. At present, the inventory problem seems to be a long-term problem, and the state of low inventory will continue next year, which has led to the pattern of wide fluctuations in nickel prices in the near future. In addition, the recent fluctuation of nickel price is also guided by macro factors. From the perspective of fundamentals alone, it is difficult for nickel price consumption to improve significantly a year ago, and nickel price may still maintain the current range concussion situation.

On the spot side, nickel prices are strong and upward. at present, the spot rising water price of nickel board has been reduced, especially Jinchuan nickel, due to the outflow of some warehouse receipts, the spot rising water has been reduced by a large extent. Today, Russo Nickel quoted 1000-1300 yuan / ton for the 2201 contract, 4000-4200 yuan / ton for Jinchuan nickel market, and 4000 yuan / ton for nickel bean. In terms of market transactions, the strength of nickel prices also affects the trend of spot transactions to a certain extent, and the performance of market transactions is weak.

View SMM Nickel spot quotation

Looking forward to 2022, how will China's copper futures market develop and innovate? What is the impact of raw material price fluctuations on the motor industry? The development and prospect of small and medium-sized motor industry, what is the impact of "double carbon" on copper downstream industry? The policy of "power restriction" has attracted much attention, so what about the form of electricity demand and the development trend of national grid investment in our country?

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