afk77slot| CITIC Construction Investment: How to view this round of small metals bull market?

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Citic Construction Investment Securities Research article | Wang Jiechao (Jin Kirin analyst) Wang Xiaofang (Jin Kirin analyst) Guo Yanzhe Wang Mingyu

1. The price of non-ferrous metals has risen this round.Afk77slotThe core logic lies in the reconstruction of US dollar credit, in the demand for new productivity and in supply constraints, and none of the above logic has been affected by the negative increase in new social finance in April.

2. transmission phenomenon: the highest increase of lithium is about 13 times, that of molybdenum is about 7 times, and that of uranium is about 4 times. In essence, the underlying logic is driven by "industrial upheaval + supply rigidity", and the persistence of demand and the high price may be of historical grade. Antimony, tin, tungsten and molybdenum are the strongest small metals in the near future, and the related targets benefit significantly.

3. On the supply side, small metals are usually faced with higher resource scarcity, and resource depletion is becoming increasingly prominent. On the demand side, the role of small metals in the emerging field should not be underestimated, and the demand elasticity and price elasticity of small metals are more than that of basic metals, so the excess income of the equity end of small metal plates is also expected to be greater. Due to the continuous development of emerging fields, small metals with limited supply will show the characteristics of a long bull.

Prices of small metals such as antimony, tin, tungsten and molybdenum have risen sharply, with antimony and tungsten hitting an all-time high.

According to my steel, on May 13, the price of antimony ingots was quoted at 11.Afk77slot.80,000 yuan / ton, up from 8% at the beginning of the year.Afk77slot.450,000 yuan / ton increased by 39.6%

According to Antaike, on May 13, scheelite concentrate (65%, domestic) was quoted at 147500 yuan / ton, up 22.4% from 120500 yuan / ton at the beginning of the year; molybdenum concentrate (45% 50%) was quoted at 3740 yuan / tonnage, up 17.4% from 3185 yuan / tonnage at the beginning of the year.

According to SHFE, tin closed at 263300 yuan / ton on May 13, up 24.9% from 210700 yuan / ton at the beginning of the year.

Recently, the price of small metals has accelerated.

1. What is the influence of low social integration on non-ferrous materials?

We believe that there is little impact. The core logic of this round of rising non-ferrous metals prices lies in the credit reconstruction of the US dollar, in the demand for new productivity and in supply constraints, and none of the above logic has been affected by the negative increase in new social finance in April.

The multiple logic in the aforementioned report "Resource products with limited supply is expected to continue to be realized". Under different logic combinations, the non-ferrous configuration continues to recommend eight categories of "antimony, tin, tungsten, molybdenum, gold, silver, copper and aluminum".

2. Why do we think that small metals such as antimony, tin, tungsten and molybdenum have the greatest elasticity?

Since the beginning of the year, the prices of small metal commodities represented by antimony, tin, tungsten and molybdenum have risen by a large margin, and have accelerated recently. We believe that it is no accident that a large number of small metal varieties have risen, which is jointly driven by "great changes in industry + strong rigidity of supply".

The demand side benefits from great changes in the industry: the "flying coal" market in 2006 was mainly driven by the great development of real estate infrastructure brought about by the process of domestic urbanization, and penetrated into the periodic table. what it needs is the basic metals represented by iron and steel, copper, aluminum and zinc. At that time, the consumption of small metals was mostly in developed countries. At present, in the face of the new global technological revolution and the upgrading of the domestic manufacturing industry, the element demand structure has undergone major changes, such as lithium, cobalt, nickel and rare earth due to the great increase in demand for new energy vehicles, tin due to AI development demand growth, molybdenum and tungsten due to metal material upgrading demand growth, antimony due to photovoltaic demand and military demand growth, copper and aluminum in the basic metal also benefit from new energy development, demand growth.

With the development of new materials, new energy and artificial intelligence, the unit usage of small metals may not be as large as that of basic metals (small metals are more in the form of additives), but the role of small metals should not be underestimated. For example, the "wear resistance, corrosion resistance and high temperature resistance" properties of molybdenum are for high-end manufacturing, and the "clarification" properties of antimony are for photovoltaic glass and "thermal shrinkage and cold expansion" for military industry. Tin is used in semiconductors, photovoltaic welding strips, automotive electronics and so on because of its low melting point, good malleability, easy to alloy with many metals, non-toxic, corrosion resistance and so on. We think that under the background of supply and demand drive and US dollar credit reconstruction, this round or historical level of the market.

The demand elasticity and price elasticity of small metals are stronger than those of base metals. (1) among the demand driven by emerging fields, the demand elasticity of small metal plates may be stronger than that of base metals. Take antimony as an example, photovoltaic glass may account for only 5% of the downstream demand for antimony in 2019 and has risen rapidly to 23% in 2023. (2) in addition, because small metals are more in the form of additives, the downstream is less sensitive to its price. Also take antimony as an example. According to Hunan Gold announcement, the dosage of sodium pyroantimonate in the production of photovoltaic glass is generally kept at 0.2% MUE 0.4%. According to Baichuan Yingfu, as of May 10, the cost of photovoltaic glass ton is about 2378 yuan, and the current price of sodium pyroantimonate is about 61500 yuan per ton. The cost of antimony accounts for about 5% of photovoltaic glass, while photovoltaic glass accounts for less than 20% of module costs. To sum up, the downstream of photovoltaic is less sensitive to antimony price.

The scarcity of resources on the supply side is becoming more and more obvious: small metals usually face higher resource scarcity and resource depletion is becoming increasingly prominent. The content of antimony in the crust is only 0.0001%, and the content of tin in the crust is only 0.004%. In addition, due to perennial over-exploitation, it is generally faced with the reduction of resource reserves and grade decline.

The excess return of the small metal sector is also greater. We select four rounds of bull market of non-ferrous metal stocks since 2008 as the analysis object, and the sub-section selects the Shenwan index of small metals, industrial metals and precious metals respectively, and takes the cumulative increase of the sub-block-the cumulative increase of the non-ferrous industry as the corresponding excess rate of return. Generally speaking, the cumulative yield of small metal plate is higher during the bull market of non-ferrous metal plate.

1. The global economy is in a sharp recession, and consumption is shrinking off the cliff. In its latest Global Economic Outlook, the World Bank forecasts global GDP growth of 3.1 per cent in 2024 and 3.2 per cent in 2025. The agency believes that with inflation slowing and growth stable, the global economy is on the road to a soft landing, but risks remain. Economic data in Europe and the United States have shown a downward trend, and the impact on consumption of non-ferrous metals in a deep recession will be huge.

2. Us inflation is out of control, the Fed tightens money more than expected, and a strong dollar suppresses the price of equity assets. The United States cannot effectively control inflation and continue to raise interest rates. The Federal Reserve has raised interest rates by a large margin, but the stickiness of services, especially rents and wages, has restricted the decline in inflation. If the Fed maintains a strong rate hike, it will be bad for dollar-denominated non-ferrous metals.

3. The growth rate of domestic new energy consumption is lower than expected, and the consumption of real estate sector continues to be depressed. Although the policy of the real estate sales side has been liberalized to varying degrees, the residents' willingness to buy is insufficient, and the debt risk resolution of real estate enterprises is not going smoothly. If sales continue to improve, the late real estate completion will face the risk of stall, which is disadvantageous to some domestic non-ferrous metal consumption.

Wang Jiechao: chief analyst of new metal materials, senior engineer, first-class architect, consultant (investment). Nearly 8 years of work in the metallurgical and construction industry, 5 years in the financial industry, began to engage in seller research in 2017, editor-in-chief GB/T18916.31, with "a method of using laterite nickel ore to produce nickel-containing hot metal" and other patented technology, and participated in the implementation of overseas "Belt and Road Initiative" project, has rich industry experience, and is good at metal and construction industry chain research.

Wang Xiaofang: Citic Construction Investment Metal New Materials researcher Metal New Materials New Wealth shortlisted team member Crystal Ball Steel list analyst wind Steel Best analyst Shanghai Securities News Best analyst Sina Finance Jin Kirin Best analyst. The cycle direction covers the upstream and downstream of the black industrial chain, from wood to raw material integration research, the research dimension includes stocks, bonds and commodities. The growth direction covers new special steel materials, tungsten, molybdenum, copper, chromium, nickel and other special steel additives.

Guo Yanzhe: four years of non-ferrous industry research experience, two years of financial industry experience, has worked in the government background of non-ferrous consulting and research professional institutions, participated in the state ministries, local governments, large enterprises industrial planning, industry consulting projects, good at non-ferrous metals industry fundamentals, supply and demand, price research.

Wang Mingyu: master of Finance from Tsinghua University, covering the upper and lower reaches of the black industrial chain, team member of New Fortune and Taurus Award in 2023.