In February, the Shanghai Composite Index rose 3.00%, while the non-ferrous sector rose 18.45%, ranking first among 30 industries. In the non-ferrous sub-industry, other rare metals (27.98%), rare earths and magnetic materials (23.77%), nickel, cobalt, tin and antimony (21.74%), lithium (17.57%), aluminum (15.51%), lead and zinc (15.40%), gold (14.25%), copper (14.19%), tungsten (12.74%). Non-ferrous sector stocks, 107 rose, 7 fell.
Basic metals: the conflict between Russia and Ukraine has intensified, the prices of natural gas and crude oil have soared, and the prices of aluminum and nickel have risen at high levels. LME copper inventories continued to decline, SHFE copper inventories soared, and copper prices fluctuated upwards. Affected by the conflict between Russia and Ukraine, crude oil and natural gas prices have risen sharply, which may lead to an increase in the scale of the shutdown of electrolytic aluminum plants in Europe and an expected increase in the reduction of aluminum supply. Aluminum prices continued to rise in February close to the highest level in recent years, aluminum stocks in the futures market are still at a low level, and aluminum prices are expected to remain high and volatile in March. Domestic nickel ore, high nickel ore inventory is low, nickel prices affected by the conflict between Russia and Ukraine and the high prosperity of new energy vehicles, prices may continue to rise.
Precious metals: the conflict between Russia and Ukraine escalated, the risk aversion of all parties increased, and the high prices of gold and silver fluctuated upward. In February, COMEX gold rose 6.43 per cent and Comex silver rose 9.33 per cent. Due to the escalating conflict and complex situation between Russia and Ukraine, the intensification of the game between various forces, the strengthening of financial sanctions against Russia by the West, the increase in inflation expectations, and the significant increase in capital risk aversion, although the Federal Reserve's shrinking table expectation is approaching, there is downward pressure on the prices of gold and silver, but the recurrent epidemic of novel coronavirus, the rising expectations of global inflation, the conflict between Russia and Ukraine and other factors provide certain support for the high-level operation of gold and silver. Gold prices may maintain a high volatility pattern.
Small metals: the production and sales of new energy vehicles increased significantly in January, and the prices of lithium and series products continued to rise. In January, the production and sales scale of new energy vehicles in China increased significantly compared with the same period last year, with continuous favorable policies for new energy vehicles and strong demand for lithium and cobalt. In February, global lithium and lithium carbonate prices continued to rise sharply, with lithium carbonate prices exceeding 60,000 US dollars per ton. affected by inventory and strong demand for new energy vehicles, lithium prices are easy to rise and difficult to fall in the short term, or will continue to fluctuate upward.
Rare earths: the price of light rare earths continues to rise. Affected by the strong demand for new energy vehicles, wind power, electrical machinery, electrical appliances and other industries, praseodymium and neodymium oxide has been in short supply since the fourth quarter of last year, and prices have continued to rise since October last year. With the continued promotion of the carbon neutralization policy, the demand for light rare earths is likely to further strengthen, continuing to push up the price of light rare earths.
Investment advice: as of the end of February, non-ferrous plate PE is 27.22x, precious metal plate PE is 23.76x, industrial metal plate PE is 18.83x, rare metal plate PE is 41.07x. The performance of the A-share market picked up in February, affected by the escalation of the conflict between Russia and Ukraine, the risk aversion of all parties increased, commodity volatility intensified, and the non-ferrous metals industry was rated as "Synchronize". It is recommended to focus on aluminum, nickel, lithium, cobalt and rare earth sectors.
Risk hints: (1) geopolitical conflicts have intensified; (2) the global novel coronavirus epidemic has worsened.
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