Nonferrous Metals Industry Dynamics Report in May: Repeated domestic epidemics + Fed rate hike to suppress nonferrous metals Politburo meeting clarifies economic growth goals or will lead the sector to rebound – yqqlm

The repeated epidemics in many places in China, combined with the expectation of substantial interest rate hikes by the Federal Reserve overseas, dragged down thenon-ferrous metalsIndustry sentiment declined.The resonant rise of energy prices and food prices has caused the world to face persistent inflationary pressures.Qualcomminflation is expected to continue to sharply raise interest rates and shrink the balance sheet.non-ferrous metalsPrices are suppressed.On the domestic side, the epidemic has recurred in many parts of the country. The deterioration of the epidemic and the forced closure have had a significant negative impact on the domestic economy. In March, the domesticIndustrial added valuedropped to 5% year-on-year,PMI The index dropped to 47.4. The shutdown of downstream construction and the obstruction of logistics have a negative impact on the upstream of the industrial chain.non-ferrous metalsBoth production and consumption have been suppressed, and the prosperity of the non-ferrous metal industry has declined. At the Politburo meeting at the end of April, it was clear that efforts should be made to achieve the expected goals of economic and social development throughout the year, comprehensively strengthen infrastructure construction, and implement city-specific policies and moderate relaxation of real estate. It is expected that more powerful policies will be introduced in the future to drive economic momentum. After the control is obtained, the resumption of work and production will be accelerated, and the prosperity of the non-ferrous metal industry is also expected to be boosted.

Investment suggestion: The Politburo meeting at the end of April made it clear that efforts should be made to achieve the expected goals of economic and social development throughout the year, comprehensively strengthen infrastructure construction, and implement city-specific policies for real estate, and moderate relaxation. It is expected that more powerful policies will be introduced in the future to drive economic momentum. Speed ​​up the resumption of work and production after the epidemic is brought under control. Infrastructure and real estate may become important drivers of steady growth this year. Industrial metals in the upstream of the infrastructure and real estate industry chain may pick up with downstream demand, and the prosperity will rise marginally. After the Fed raises interest rates by 50 basis points at the May rate meeting, the market’s expectations for the Fed to sharply raise interest rates and shrink its balance sheet will gradually be digested, and the pressure on non-ferrous metal commodity prices will gradually weaken.It is recommended to pay attention to leading companies in the industrial metal sectorZijin Mining(601899)、Western Mining(601168)、Tongling Nonferrous(000630)、Nanshan Aluminum Industry(600219)、Shenhuo shares(000933)、Tianshan Aluminum(002532)、Yunnan Aluminum Co., Ltd.(000807)、Chihong Zinc Germanium(600497). The global shortage of lithium resources continues, and the price of lithium concentrate has accelerated. The first auction price of Pilbara lithium concentrate this year was US$5,650/ton. Allkem raised the 2022Q2 long-term price guide for spodumene to US$5,000/ton. Driven by the cost, the price of lithium salt will still be supported in the second half of this year. After the epidemic improves the downstream production chain and resumes production and enters the peak demand season, it is expected that the price of lithium salt in Q3 is expected to return to the previous high, and the price of lithium throughout the year may remain at 40-50 million yuan / ton high.After the recent sharp decline in the collective sector, the 22-year valuation of most individual stocks in the lithium industry has generally been lower than 10x, and the lithium sector as a whole is undervalued.fundThe first quarterly report reflects that the congestion in the lithium track segment has slowed down significantly.Once the market sentiment picks up, combined with the gradual resumption of work and production in the downstream, and the improvement of the market’s sustainable expectations for high lithium prices, the lithium sector is expected to usher in a strong rebound, and it is recommended to pay attentionGanfeng Lithium Industry(002460)、Tianqi Lithium Industry(002466)、China Mining Resources(002738)、Yongxing Materials(002756)、Shengxin Lithium Energy(002240)、Rongjie shares(002192)、Jiangte Motor(002176)。

Risk reminders: 1) Downstream demand for non-ferrous metals is sluggish; 2) Metal prices have fallen sharply; 3) The global epidemic continues to worsen; 4) The U.S. dollar is stronger than expected; 5) The production and sales of new energy vehicles are lower than expected;

(Article Source:China Galaxysecurities）

Article source: China Galaxy Securities

Responsible editor: 91

Original title: Nonferrous Metals Industry Dynamic Report in May: Repeated domestic epidemics + Fed rate hike to suppress nonferrous metals Politburo meeting clarified economic growth goals or will lead the sector to rebound