Zinc and aluminum daily: going to the warehouse to superimpose overseas supply disturbance and high aluminum price concussion [institutional review]

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

Zinc:

Spot aspect, LME zinc spot water 40.00 U.S. dollars / ton, the previous trading day rose 31.00 U.S. dollars / ton. According to SMM, the mainstream of zinc traded at 24280,24400 yuan per ton in Shanghai, while Shuangyan traded at 24320,24,460 yuan per ton. Zinc common to 2201 was quoted at 0.30 yuan per ton, Shuangyan against 2201 at 60,070 yuan per ton, and zinc mainstream traded at 24210 million 24330 yuan per ton. Zinc prices rose sharply yesterday. In the morning, the average monthly ticket price of ordinary zinc ingots was quoted at 0,10 yuan / ton for the holder of zinc ingots, and 30 yuan / ton for the 2201 contract, near the end of the long order. Supported by the demand for replenishment, the average price of this month's ticket rose slightly upwards, 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, yesterday's monthly ticket was mainly supported by long order demand, and the rising water of the average price warmed up, but downstream enterprises were less willing to receive goods at high zinc prices, which led 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 was quoted at a discount of 20,040 yuan / ton in the market next month, with few transactions.

On the inventory side, LME stocks were 203400 tons on December 23, a decrease of 500tons from the previous day. According to SMM, on December 20, the inventory of zinc ingots in seven places in China was 124200 tons, a decrease of 2300 tons compared with the previous week.

Viewpoint: yesterday, Shanghai zinc day shock strengthened, night trading opened a small pullback. The rise in overseas energy prices has triggered concerns on the supply side. If power supply tensions continue to worsen, European zinc smelters are likely to cut production again. In addition, the O'Micron mutation virus is rampant, and many European countries have tightened epidemic prevention measures, which may affect foreign trade in transportation. Domestically, the epidemic in Inner Mongolia has led to a moratorium on the import of zinc concentrate in the two major local ports, and the shortage of zinc concentrate in the northern refinery has not been solved. Under the influence of environmental protection inspectors, Shaanxi and Guangxi continued to limit production. On the consumer side, domestic consumption has entered the off-season, and the willingness of downstream enterprises to buy is very weak. On the inventory side, social inventories are flat compared with last Friday. In terms of price, to continue the pattern of weak supply and demand in China, we need to focus on the situation that European production enterprises are affected by local electricity prices. if the overseas energy crisis continues, zinc prices will be supported. In the short term, it is suggested to be cautious and bullish unilaterally.

Strategy: unilateral: be cautious and bullish. Arbitrage: internal and external arbitrage.

Risk points: 1, the impact of the epidemic situation of variants. 2. Consumption is lower than expected. 3. Domestic energy consumption double control policy.

Aluminum:

On the spot side, LME aluminum spot discount $13.25 / ton, the previous trading day discount of $19.00 / ton. According to SMM, yesterday's Shanghai Aluminum main 2201 contract opened at 20190 yuan / ton in early trading, with a peak of 20300 yuan / ton and closed at 20260 yuan / ton, up 440 yuan / ton or 2.22% compared with the previous trading day. The position decreased by 15207 to 965 million, with a turnover of 1.210 million. The information about the rise in energy and electricity prices in Western Europe continued to ferment, the center of gravity of Lun Aluminum outside rose to more than 2830 US dollars / ton, Shanghai Aluminum followed the intraday increase of more than 2%, and the discount on spot transactions in East China continued to expand in early trading. Near noon, the discount stabilized to 160 yuan / ton, and the actual transaction concentration was 20050-20080 yuan / ton. near the end of the year and the settlement day of the long order, the market liquidity is abundant, and the discount is still weak. Central Plains (Gongyi) area transactions continue to maintain the discount pattern, the actual discount floated more than 190 yuan / ton in the month, downstream acceptance sentiment has withdrawn compared with the previous two days.

According to SMM, yesterday morning domestic Shanghai aluminum high operating at 19700-19800 yuan / ton, East China spot discount expanded to more than 150 yuan / ton, near the long order settlement day, middlemen and downstream preparation efforts are insufficient, relative to market shipments, aluminum ingot circulation is abundant, so that discount expansion. The price in the Central Plains (Gongyi) varies greatly in early trading, which is higher than that in East China from 40 yuan discount to 30 yuan per ton. With the concentration of transactions, around 10:00, the transaction is close to 150 yuan / ton on the opposite side of the market, and there is not enough goods downstream. The discount range is about 30 yuan / ton larger than that of yesterday.

On the inventory side, LME stocks stood at 968600 tons as of December 23, down 1800 tons from the previous trading day. As of December 23, social stocks of aluminum ingots were down 27000 tons from Monday to 864000 tons.

Viewpoint: yesterday Shanghai Aluminium intraday high concussion, night trading opened slightly pullback. Alro, a Romanian aluminium smelter, plans to suspend operations because of high energy prices. The plant, with a total capacity of 282000 tons of aluminum, has begun the closure process and will cut production by 60 per cent in the first phase. Taking into account the impact of supply instability in Russia, cold waves, nuclear power disruptions and other factors, the energy crisis in Europe may continue from winter to the beginning of next spring, and we need to pay attention to the news of more smelter shutdowns in the future. In addition, the spread of the Omicron variant virus has also increased the possibility of shutdowns in overseas mines and smelters, which will also affect foreign trade in transportation. Fundamentally, the double control policy of energy consumption and environmental protection inspectors and other factors still suppress the production capacity of electrolytic aluminum, and it is difficult for the northern region to resume production on a large scale before the end of the Winter Olympic Games. On the consumer side, the holder is bullish on the price and hesitates to sell, and the consignee buys actively, and the overall transaction is OK. However, the Spring Festival off-season is approaching, downstream holiday shutdown one after another, the need to guard against the risk of weakening demand in the future. In terms of inventory, the latest inventory data show that the domestic aluminum ingot community continued to go to the warehouse, Wuxi, Nanhai and other major consumers contributed a major decline. In terms of prices, the current fundamentals of the aluminum market are relatively stable, and we need to focus on the situation of European manufacturers affected by local electricity prices. if the overseas energy crisis continues into January, aluminum prices are expected to remain strong in the short term.

Strategy: unilateral: be cautious and bullish. Arbitrage: neutral.

Risk points: 1. Liquidity tightens faster than expected. 2. Consumption is far below expectations. 3. Domestic energy consumption double control policy.