Guosheng Securities: going to the Treasury highlights the resilience of Copper and Aluminum demand, Cobalt and Lithium prices accelerate up at the end of the year

Precious Metals: us Treasuries hit a two-year high as Fed hawkish talk weighed on precious metals prices.

1 nominal interest rate: the number of non-farm payrolls added by only 199000 after the December quarterly adjustment announced on Friday night, the smallest increase since January last year, well below the expected figure of 400000, revised from an increase of 210000 to an increase of 249000. The unemployment rate reported at the same time was 3.9% in December, significantly lower than the expected 4.1%. The dollar suffered its biggest one-day decline in six weeks on Friday as non-farmers fell less than expected, while the bottom of gold rebounded slightly. But the persistently low unemployment rate further boosted market expectations of raising interest rates, with the federal funds rate showing that expectations of an interest rate rise in the United States rose to 90% in March, with precious metals under long-term pressure.

2 inflation expectations: implied inflation in the US bond market fell from 2.56 per cent to 2.48 per cent this week, while real interest rates rose from-0.97 per cent to-0.72 per cent this week. Minutes of Wednesday's Fed meeting said that the process of raising interest rates to fight inflation may be discussed earlier than expected, and that reducing asset holdings will be discussed for the first time. The price of gold fell by more than 1% a day after the meeting. Higher inflation, Fed tightening and economic recovery remain key elements of the precious metals price game.

Basic metals: the rush to work at the end of the year led to a pick-up in metal supply, and the continuous removal of warehouses downstream highlights the resilience of demand.

(1) Copper:

1 in the macro aspect, the employment of ADP in the United States improved much more than expected in December, the comprehensive PMI of Markit showed that the economic recovery was improving, and the minutes of the FOMC meeting showed that in addition to accelerating Taper and raising interest rates, the contraction table was also on the way, and the dollar index strengthened and metals were under pressure.

2 on the supply side, SMM statistics show that the output of electrolytic copper in China by SMM in December was 870300 tons, up 5.38% from the previous month and 0.97% from the same period last year. At the end of the year, the overhaul of copper smelters came to an end, while some smelters quickly recovered from the accident to superimpose the year-end catch-up effect. Domestic electrolytic copper output in December far exceeded market expectations, reaching a new high since the second half of the year. The output is expected to remain high in January 2022.

(3) in terms of demand, the atmosphere became thicker at the end of the year, and the weekly operating rate of domestic copper rods decreased for five consecutive years. After copper prices fell this week, downstream raw material stocks increased, domestic inventories fell more than expected, and low inventories made spot risers return to a high of 400 yuan / ton. Spot prices are expected to remain high under the expectation of replenishment demand before the Spring Festival, supporting the bullish sentiment in the futures market. After the US hawks spoke of a brief crackdown on copper prices, copper prices rebounded quickly, reflecting the strength and resilience of copper prices. The risk is that the lower-than-expected reserve stocks for the Spring Festival will lead to a faster rebound in global inventories of fundamentals.

(2) Aluminum:

1 inventory: LME inventory decreased by 22300 tons to 916900 tons per week, domestic social treasury decreased by 15900 tons to 801800 tons, and domestic and foreign apparent inventory Synchronize was eliminated.

(2) in terms of cost: the profit level of per ton electrolytic aluminum (self-provided power plant) rose by another 509 yuan / ton to 4480 yuan / ton during the week, Indonesia's coal export policy reversed again, or it may be difficult to form a supporting force for domestic coal prices;

3 on the supply side: the resumption of production in Yunnan, Inner Mongolia and other areas is at a slow pace. According to Baichuan data statistics, the new production capacity during the week is about 200000 tons, which has a weak impact on the overall supply and demand of electrolytic aluminum. In 2022, as the double control of energy consumption opens a new stage of index assessment, and renewable energy such as hydropower is no longer included in the energy consumption dual control assessment index, the production situation in Yunnan Province is expected to be better than 2021. On December 29, the Ministry of Industry and Information Technology announced the introduction of the "14th five-year Plan for the Development of Raw Materials Industry", which mentioned that by 2025, the production capacity of key raw materials and bulk products would only increase, and the carbon emissions of electrolytic aluminum would be reduced by 5%. This policy guidance means that the electrolytic aluminum industry has entered the era of "carbon neutralization" ahead of time. While the aluminum industry chain is looking for energy saving and carbon reduction channels, the release of energy to be put into production will be more tortuous.

4 demand: at the end of 2021, the Ministry of Finance issued a notice on improving the value-added tax policy for the comprehensive utilization of resources, which focuses on the stricter tax rebate policy of 30%, in which foundry enterprises no longer enjoy tax rebate subsidies. in the corresponding market, only recycled aluminum enterprises can enjoy the subsidy policy. We believe that the policy will further highlight the importance of relegation utilization in the aluminum waste recycling track and catalyze the further optimization and adjustment of the domestic recycled aluminum industry, while the current relegation utilization enterprises will have more advantages on the cost side. Suggested attention: Zijin Mining, China Nonferrous Mining, Mingtai Aluminum, Jinxin, Nanshan Aluminum, Suotong Development, Shenhuo, Tianshan Aluminum, Chinalco, Yunnan Aluminum.

Energy metals: the gap between supply and demand enlarged again at the end of the year, and the price of cobalt and lithium accelerated upward.

(1) Lithium: some manufacturers shut down for maintenance at the end of the year, the output of lithium carbonate has declined for nine consecutive weeks, and the gap between supply and demand is still magnifying. Lithium hydroxide inventory has continued to decline since the beginning of the year. The retail of new energy vehicles and the scheduling of cathode materials in November show that the demand side remains high. It is expected that the gap between supply and demand will gradually enlarge in the middle of next year, maintaining the bullish view of lithium prices.

(2) Nickel: the purchasing demand of the downstream factories of nickel salt is not good, the upward quotation further affects the purchasing enthusiasm, the market wait-and-see is the main, and the price of nickel sulfate is under upward pressure.

(3) Cobalt: there is a certain replenishment situation in the pioneer and four cobalt manufacturers due to the adjustment of the production plan, the pace of procurement in the lower reaches is gradually rising before the year, and the superimposed head enterprises reduce production, and the price of cobalt is expected to continue to rise. The rise in 3C demand has contributed to a surge in lithium cobalt oxide this week. Suggested attention: Huayou Cobalt Industry, Ganfeng Lithium Industry, Zhejiang Fu Holdings, Tianqi Lithium Industry, Rongjie shares, Yahua Group, Salt Lake shares, Tibet Mining, Hanrui Cobalt Industry, Xiamen Tungsten Industry, Xiamen Tungsten Xinneng, Shengtun Mining, Jinli permanent Magnet.

Risk hints: the global economic recovery is not as expected, the global epidemic development is higher than expected risk, political risk and so on.