Federal Reserve Governor Waller and others said in their speeches last week that “the signs of the US economy and job market cooling should be interpreted as weakening rather than worsening” and “they still support cautious interest rate cuts at this stage,” and the market's expectations that the Fed will cut interest rates even less in September have increased.
The Zhitong Finance App learned that GF Securities released a research report saying that waiting for the Federal Reserve's interest rate cut to be implemented, basic metal prices are expected to fluctuate and rise again. It is expected that the direction of interest rate cuts by the Federal Reserve will not change. Preventive interest rate cuts will support external demand, but demand expectations will continue to fluctuate, and the room for improvement in external demand is also under pressure. The trade-in policy supports domestic demand, and the supply side is tight, and basic metal prices are expected to fluctuate and rise. Steel supply and demand are weak, steel prices and costs are falling, profit margins are recovering, and supply constraints continue to be watched. On the precious metals side, the Federal Reserve has sent a signal of cautious interest rate cuts. The expected shift has put some pressure on the price of gold. It is expected that monetary and financial attributes will continue to drive the upward trend in gold prices in the future.
Basic metals: Waiting for the Federal Reserve to cut interest rates, the price of basic metals is expected to fluctuate and rise again. It is expected that the direction of interest rate cuts by the Federal Reserve will not change. Preventive interest rate cuts will support external demand, but demand expectations will continue to fluctuate, and the room for improvement in external demand is also under pressure. The trade-in policy supports domestic demand, and the supply side is tight, and basic metal prices are expected to fluctuate and rise. Recommended attention: Luoyang Molybdenum (603993.SH,03993), Western Mining (601168.SH), Jin Chengxin (603979.SH), China Aluminum (601600.SH,02600), Yunlu Co., Ltd. (000807.SZ), Tianshan Aluminum (002532.SZ), etc.
Steel: Supply and demand are weak, steel prices and costs are falling, profit margins are recovering, and supply constraints continue to be watched. On the supply side, blast furnace construction declined month-on-month, steel mill profits were weakened, and iron and water supply constraints were obvious. On the demand side, focus on demand recovery after the off-season ends. On the cost side, it is expected that low profit margins will continue to suppress demand for raw material procurement. In terms of price benefits, the pattern of supply and demand weakens in the short term, expectations for differences between purchases and sales are weak, and expectations of supply constraints are rising. Short-term steel price shocks are expected to be the main focus. Recommended attention: Baosteel Co., Ltd. (600019.SH), Valin Steel (000932.SZ), Jiuli Special Materials (002318.SZ), Fushun Special Steel (600399.SH), etc.
Precious metals: The Federal Reserve sent a signal to cut interest rates cautiously, and gold prices fluctuated in the short term. According to Wind, the US unemployment rate in August was 4.2%, in line with expectations; the number of new non-farm payers and ADP in August both fell short of expectations, and US employment pressure continued to show. However, last week, Federal Reserve Governor Waller and others stated that “the signs of the cooling of the US economy and the job market should be interpreted as weakening, not worsening,” and “at this stage, they still support cautious interest rate cuts,” and the market's expectations for a smaller rate cut in September have increased (according to CME, the probability that the Federal Reserve will cut the federal funds target interest rate by 25BP to 5.00%-5.25% in September is 70%). The expected transformation has put some pressure on the price of gold. It is expected that monetary and financial attributes will continue to drive up the price of gold in the future. Recommended attention: Chifeng Gold (600988.SH), Zhaojin Mining (01818), Shandong Gold (600547.SH,01787), Zhongjin Gold (600489.SH), Yintai Gold (000975.SZ), Xingye Silver Tin (000426.SZ), Shengda Resources (000603.SZ), etc.
Energy metals: Expect an increase in industrial chain inventory, and lithium prices may be supported to a certain extent. Market expectations of an oversupply of lithium carbonate remained unchanged. At the same time, concentrate prices resumed a downward trend in August, and lithium smelting costs also declined. Judging from the gap between supply and demand and cost levels, there is still room for lithium carbonate prices to decline. However, in order to welcome the peak terminal sales season, the NEV industry chain is expected to increase, or form some support for lithium carbonate prices. Lithium carbonate prices may fluctuate mainly in September. Recommended attention: Shengxin Lithium Energy (002240.SZ), Rongjie Co., Ltd. (002192.SZ), Yongxing Materials (002756.SZ), Huayou Cobalt (603799.SH), etc.
Small metals: prices of rare earths and molybdenum are rising, waiting for demand to pick up. Domestic rare earth indicators remained flat month-on-month in the second half of the year, boosting confidence in the industrial chain. Orders are picking up recently, and rare earth prices are still expected to fluctuate upward in the future. Downstream orders for rare earths have picked up recently, and prices are expected to fluctuate upward. The price of tungsten has dropped slightly, and downstream demand needs to be improved. It is expected that tungsten prices will operate at a high level. Molybdenum prices rose last week, and downstream stainless steel began to be removed from storage. The supply and demand pattern in the industrial chain still needs to be optimized. Molybdenum prices are expected to fluctuate at a high level. Recommended attention: Gold and Molybdenum Co., Ltd. (601958.SH), Shenghe Resources (600392.SH), Northern Rare Earth (600111.SH), Jinli Permanent Magnet (300748.SZ), Xiamen Tungsten Industry (), etc. 600549.SH
Risk warning: The macroeconomic recovery fell short of expectations; downstream demand for metals fell short of expectations; the growth rate of supply from related mines exceeded expectations; the Fed's interest rate hike exceeded expectations; downstream demand from the military industry fell short of expectations; production of iron ore, coking coal and coke fell short of expectations; and the reduction in crude steel production fell short of expectations.