Key investment points
Precious metals: the upward trend of two-year US debt and the adjustment after the peak of geopolitical tension. The death of President Leahy of Iran on May 19 increased the market's concern about geopolitical tensions, and gold and silver prices soared. However, with the rebound of US Treasuries, they fell back. This week, the two-year US Treasuries closed at 4.95%. The market is betting that the Federal Reserve will cut interest rates once in 24 years. The reason for the expected change is that the number of weekly unemployment benefits announced on May 23 was 215000, lower than expected and the previous value. At the same time, the initial Markit comprehensive PMI of the United States in May was 54.4, higher than expected, indicating the high resilience of the US economy. London Gold and Bank of London adjusted after surging this week. London Gold fell 3.35% this week, and Bank of London fell 3.56% this week. Silver's correction after last week's sharp rise was small, while gold's relative correction was large, which was expected to ferment the market's expectation of a soft landing in the US economy. In the long run, we believe that the bull of precious metals is far from over, the downward trend of inflation in the United States is difficult to be smooth, the geopolitical disturbance may increase the deficit rate of the United States, and the continuous downward revision of non-agricultural employment in the United States may show that its economic resilience is slightly inadequate. In short, we believe that if the United States moves towards stagflation or recession in the future, gold is expected to outperform silver. If the United States economy has a smooth soft landing, silver may outperform gold.
Copper: New copper closing is over. Comex copper in New York fell by 5.66% this week, while LME copper fell by 3.22%, while Shanghai copper only fell by 0.12%. Copper prices at home and abroad have converged. At present, Shanghai copper (excluding VAT)/New York copper has retreated to about 97.8%, and the rapid convergence of the price difference has announced the end of the closing event. At the same time, the general decline in copper prices this week reflects the delayed impact of the Federal Reserve's interest rate cut expectations. In the long run, against the backdrop of frequent disturbances in global copper supply, the tight balance of overall supply and demand is the basis for price increases. Future growth mainly depends on the recovery of global manufacturing. If the overseas economy has a smooth soft landing, the financial environment has improved, and the domestic real estate industry has recovered smoothly with policy support, copper prices may continue to reach new highs.
Aluminium: Yunnan continues to resume production, and the price of aluminium has a great impact on the processing of high and middle schools. In terms of domestic supply, the operating capacity of domestic electrolytic aluminum increased on a month on month basis. This week, Yunnan Province had abundant power supply, and the surplus capacity continued to promote the resumption of production. The capacity of Yunnan Shenhuo has been full, Yunnan Aluminum continued to promote the resumption of production, and the Inner Mongolia Huayun Electrolytic Aluminum Project was steadily promoted, and the power was started. After the aluminum price soared this week, it had a certain degree of adverse impact on new orders such as aluminum profiles and finished product inventory. Although no enterprises have stopped or reduced production at present, if the order downturn continues, it is not ruled out that industrial production reduction may occur.
Lithium: The price of lithium carbonate rebounded from the bottom, and the supply was sufficient. The price of lithium carbonate rebounded this week, and the profit margin of the externally mined lithium ore smelting enterprises declined. They were more resistant to the high price supply and preferred the low price supply. In order to control costs and reduce raw material procurement, Jiangxi mica manufacturers have weak price support for mica. At present, the release of lithium carbonate production capacity is accelerating, and the inventory of manufacturers is also rising. Under the condition that the fundamentals are not as expected, manufacturers are under great pressure to clinch deals, most of which are long orders. Downstream battery factories tend to purchase low price goods, and the market transaction focus has declined. With the increase of supply, the manufacturer's profit pressure decreases slightly, and the industrial carbon spot pressure is greater.
Antimony: The price of antimony has exceeded 120000 yuan, and the wait-and-see mood is strong. Antimony prices rose 5.57% this week to 123000 yuan/ton, which reached a historical high. The wait-and-see sentiment was also strong. On the one hand, speculative demand began to be cautious, and the market frenzy converged. On the other hand, downstream deals were mainly just in demand, and there were basically no large orders. At present, the market is mainly concerned about when the Russian antimony mine will enter China. It is rumored that the Budget and Tax Committee of the Russian State Duma has recently approved a proposal to levy an additional mining tax of 78 million rubles/ton on gold from June 1 to December 31. The Russian antimony mine is mainly associated with gold mine, which may be intended to start from scratch, It is less likely to enter China from May to June.
Uranium: The price of uranium remains stable, and all countries strive to make up for the shortage of supply. On May 13, Biden signed the Law on Prohibiting the Import of Russian Uranium. 90 days after the law came into effect, American enterprises will not be allowed to import low enriched uranium produced in Russia. Countries have introduced plans to make up for the supply shortage.
The US uranium output in Q1 reached 82533 pounds of U3O8, the highest output since Q1 2018; The UK plans to provide 196 million pounds (245 million dollars) to Urenco for the construction of a uranium enrichment facility, which will replace Russia as the only commercial producer of HALEU fuel in Europe by 2031; Osman Abachi, Minister of Mines of Niger, participated in the foundation laying ceremony of the processing plant selected by Global Atomic when inspecting the mine. At present, DASA mine is still in normal operation. Global Atomic has started an alternative route to transport materials from Lom é Port of Togo and by land through Burkina Faso. Overall, the supply gap of uranium price in the short and medium term is still difficult to make up.
Investment advice
It is suggested to focus on CICC Gold, Zijin Mining, Industrial Silver Tin, Tin Industry Co., Ltd., Lizhong Group, CGN Mining, etc.
Risk warning:
Macroeconomy fluctuated significantly, demand was less than expected, supply release was more than expected, and the company's project progress was less than expected.
