Non-ferrous Metals Weekly: Twelfth Five-Year Plan Boosts New Metal Materials into Fast Track

QE3 is expected to fail and the metal market is diving. The meeting of European finance ministers and central bank governors held at the end of last week had been highly hoped by the market. Eventually no breakthrough was made and the most concerned Greek rescue plan was not finalized. The expectations of the Fed to launch QE3 at the meeting on the 20th and 21st meeting failed, and the metal market fell into disappointment. Copper and nickel all set the biggest single-day drop since 2008 on that day. This week, LME copper, aluminum, lead, zinc, nickel, tin and COMEX gold fell by 15.36%, 7.31%, 17.34%, 11.51%, 12.55%, 15.06% and 8.56%, respectively. This week, domestic copper, aluminum, zinc spot premiums have been significantly enlarged, and the international copper sales have increased sharply, showing a more pessimistic market sentiment; aluminum stocks in the domestic exchanges fell for the 28th consecutive week.

The wire and cable operating rate remained good, and lead smelting companies reluctantly sold to change the supply and demand pattern. 1. In September, the average operating rate of 20 wire and cable companies was 91.3%, and the overall operating rate was high. The gap between the operating rate of large-scale wire and cable companies and medium-sized cable companies has increased since August. 2. This week, the main transaction range of alumina prices was between 2850-2900 yuan/ton. New electrolytic aluminum production capacity in northwestern China will be put into operation immediately. Demand has greatly supported prices.

Spot aluminum prices fell sharply this week due to the rise in the US dollar. The cost of primary aluminum remained at around 7.7, and the profit margin of electrolytic aluminum plants narrowed substantially. 3. The price of lead continued to slump during the week, and individual small-scale ground-level lead-zinc mines suspended their production. Lead prices fell sharply. Smelters reluctantly sold their goods more emotionally, and domestic supply and demand patterns changed. However, this did not significantly boost the desire of downstream lead-acid battery companies to purchase. Except for some enterprises that want to maintain normal production, they choose stocks before the National Day, and most companies still prudently purchase them with a guarantee of normal supply.

The overall stability of the rare earth market, the gradual decline in the market rose gradually the market outlook may fluctuate. 1. This week, the overall performance of rare earth prices is relatively stable, rare earth metal 镨钕 ≥ 99% tax quoted in the market at 120-130 yuan / ton; 镧 oxide tax included in the price of 1350-14.5 yuan / ton; 镨 镨 99% market report 90-95 million yuan / ton, cerium oxide ≥ 99.9% market reported 100-110 yuan / ton; currently the domestic offer NdFeB N35 in the 405-410 yuan / kg. 2. This week, the price of Changjiang No. 1 antimony ingot has increased by 500 yuan/ton to 101,750 yuan/ton. On Friday, some small-scale plants slightly lowered the price of antimony ingots and antimony oxide. 3. More than 65% of this week's wolframite concentrate market reported at 1.53-1.35 million yuan per ton, and more than 65% of the scheelite concentrate market reported at 1.52-10.54 million yuan per ton; the APT market reported at 23.6-23.8 million yuan per ton. 4. This week the domestic molybdenum market has dropped slightly, the mainstream molybdenum and iron prices in the 13.8-14.3 million yuan / ton; raw materials, the mainstream price of molybdenum concentrate in 2020 yuan / ton.

New metal materials enter the fast track of development, with medium-to-long-term focus on supply-constrained/extensive expansion varieties: China's 12th Five-Year Plan for New Materials will boost rare earth permanent magnets, superhard materials, high-performance carbides, and light alloys (aluminum and magnesium Titanium, etc.) Enter the fast track of development, and we can pay attention to Xiamen Tungsten Industry Co., Ltd., Baotie Co., Ltd., Zhongke Sanhuan Co., Ltd., Ningbo Yunsheng Co., Ltd. The global economic recovery has slowed down, the debt problem in Europe and the United States has not yet been resolved, industrial metals have been lacking in strength, and cautious views have been maintained in the short-term, and adjustments can be made in the latter stage to focus on the rapid expansion of Tongling Nonferrous Metals and Chihong Zinc Alloy. The supply of constrained small metal resources is worth attention in the medium to long term. China's rare metal resource integration and price alliance will support the upside of the “Tungsten, Antimony, Indium, Gallium, and Indium” and other advantageous varieties, and recommend Xiamen Tungsten, Chenzhou Mining and Tin Industry shares.