Lun aluminum futures hit a new high of $3236 a tonne yesterday, up more than 13 per cent year-to-date, boosted by multiple factors such as production cuts and transport disruptions. As international crude oil prices surged above $90, nickel, tin, rebar, iron ore and hot rolls rose by more than 10% in 2022. This can not help but attract the attention of major institutions around the world. Jeff Currie, an economist and head of global commodity research at Goldman Sachs, an international investment bank, said a few days ago that all commodity markets are in a state of shortage and have never seen such a shortage. In a previous report, Goldman Sachs raised its 12-month aluminium price forecast to a record $4000 a tonne.
Similarly, Wenyu Yao, senior commodities strategist at ING, said: "Aluminium is in a perfect storm because of the European energy crisis and the situation in China that still limits supply."
Daniel Hynes, senior strategist at Australia and New Zealand Banking Group, said: "at the heart of all this is the energy transformation, which will affect commodities in the foreseeable future. Spare capacity is relatively low and cannot make up for the potential risk of supply. "
In this regard, SMM also interviewed the views of senior analysts of domestic institutions.
Jing Chuan, deputy general manager of CUHK Futures, believes that:
Since the beginning of the year, commodity markets have risen as a whole under the combined influence of markets at home and abroad. First of all, the influencing factors are the contraction of global liquidity brought about by the Fed's tightening of monetary policy, which puts pressure on commodities in the long-term sense, but in the short term, it is a confirmation of economic overheating, so commodities show a rising trend in the short cycle. in fact, it is the long-term fluctuation law of commodities that supports the domestic market to a certain extent. From a domestic point of view, China's monetary and fiscal policy has brought expectations to the market, but it also confirms that economic operation is weakening, leading to commodity market turmoil.
The fundamentals of the steel market are better than expected, the inventory growth is small, and the restrictions on energy-consuming and inefficient production capacity have promoted the market's expectation of production reduction to a certain extent. And safe and orderly, step by step to promote carbon peak action is the principle of the central government, to ensure safe carbon reduction, help to steadily promote the low-carbon development of the iron and steel industry, the iron and steel industry to take the road of high-quality development is imperative, the interpretation of the market actually has the problem of long-term and short-term dislocation, the strong price still needs the start-up of short-term consumption and the actual changes in steel production capacity to verify.
Due to the alternation of hot and cold economies between China and the United States, there has been a certain mismatch in monetary and fiscal policy, which will lead to more intense fluctuations in commodities. At the same time, the operation of commodities is inevitably divided, domestic self-priced commodities will tend to weaken after a short-term recovery, while globally priced commodities will continue to be strong. Non-ferrous metals obviously belong to the latter, affected by the strong economic release of Europe and the United States in the later stage of the epidemic, non-ferrous metals will still show obvious strong characteristics in the short cycle. The policy of double control of domestic energy consumption on the supply side still interferes with the recovery of the yield of some non-ferrous varieties, especially in the output of aluminum and zinc. Due to energy problems, electricity prices in major overseas countries remain high, aluminum and zinc smelting is in a state of continuous losses, and further production cuts are not ruled out. The overall global inventory of non-ferrous varieties is on the low side, warehouse receipts continue to be removed in Europe, spot prices are high, and the pattern of external strength and internal weakness continues. On the other hand, lead and nickel show strong characteristics due to weak overall abundant supply, strong neutrality of copper and strong characteristics of aluminum and tin. In the medium cycle, as the economies of Europe and the United States are already running in the second half of this round of recovery, non-ferrous metals will also weaken with the renewed decline of the global economy. On the whole, commodities will show the characteristics of operation in the year of the Tiger.
Zhang Huawei, a senior analyst at Soochow Futures, believes that:
Since the beginning of this year, the overall trend of base metals has been strong, with the exception of lead, other base metals have risen significantly this year. It is expected that the short-term basic metals callback space is limited, mainly based on the strong fundamentals of these metals, low global explicit inventory is their common feature.
From the supply side, the global power supply is tight, and high electricity prices limit the production capacity. Since the second half of last year, there has been a reduction in the production of basic metals due to power shortages from Europe to China. Due to the lack of capital expenditure in the past, the global traditional energy is slow to put in new capacity. The supply of clean energy is very unstable due to the influence of natural conditions. Wind power fell in northern Europe last year because of falling winds. Due to the reduction of water supply and the decline of power generation in summer in Yunnan, China, a number of aluminum production lines have been reduced.
On the demand side, there is a shortage of basic metals related to new energy. With the increasing demand for these base metals in new areas, there has been a replacement for traditional areas, and there are signs of accelerated demand growth. Not only basic metals, but also rare metals such as lithium, which are related to new energy, are in short supply all over the world, and prices continue to rise.
At the same time, global inflation is high, and basic metals are also allocated by institutions as anti-inflationary assets. However, as central bank policies in Europe and the United States gradually turn around, global liquidity is tightening and economic growth is expected to slow. Global inflation is expected to cool significantly in the second half of the year, and the heat of base metals is also expected to decline. However, in the longer term, basic metals such as nickel, copper and aluminum, which are closely related to new energy, are still optimistic.
