After the price of cobalt rose, the price of small metals such as tin and nickel was bullish
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Small metal industry chains have risen to varying degrees. Some analysts believe that this is not an isolated incident. The logic behind the rise has a greater commonality. De-capacity is the simplest logic of non-ferrous metals. This rise is not a short-term phenomenon, but a cyclical rise from the local breed to the overall industry.
Small metal stands out
The Shanghai and Shenzhen stock markets showed a weak and volatile situation yesterday. Among the 28 Shenwan-level industries, only the color metal plates were red. Among the stocks, Baiyin Nonferrous Metals, Baoti Titanium and Yunnan Haoye were among the top gainers, 9.94%, 8.05% and 4.08% respectively. Among them, silver is a recently listed stock.
Wind statistics show that since the beginning of this year, the non-ferrous metals index has risen by 11.21%, second only to the banking, communications and defense military industry index; in the same period, the Shanghai Composite Index rose 4.07%, underperforming the non-ferrous metal index by 7.14 percentage points. Since the high price of cobalt, the small metal plates of titanium and tantalum have attracted much attention.
According to the data of Pacific Securities on February 27, since November 2015, prices of cobalt, antimony, tungsten and molybdenum have increased significantly. For example, cobalt oxide has increased by 170% since January 2016. Tungsten concentrates in 2015 Since November, the increase has exceeded 53%. In February alone, in addition to a 33% increase in cobalt oxide, antimony concentrates rose 12% and tungsten concentrates rose 6.3%.
What are the incentives for the rise in prices of small metals such as cobalt? Yang Ning, the chief guest commentator of the investment master, pointed out that after the long-term downturn in the non-ferrous industry in the past five to six years, many companies have automatically withdrawn without supply-side reforms, while cobalt demand is concentrated in the battery field, new energy vehicles. And the rapid development of electronic consumption provides a market digestive pool. In addition, the turmoil in the Congo has also reduced supply.
"But this is a long-term reason. The foundation of small metal price increases will form a trend. After this trend is formed, a large human factor will be added at the end of the price increase. The high investment enthusiasm will cause short-term irrational impact on prices. This phenomenon has been the norm in the spot market in the past ten years," Yang Ning said.
Wang Wenjing, an analyst at Pacific Securities, said that the prices of various links in the industrial chain of small metals such as tungsten, tantalum and molybdenum have all rebounded to varying degrees. Unlike cobalt lithium, the downstream industries of tungsten, thorium and molybdenum are mostly traditional manufacturing industries that are undergoing transformation and upgrading. The demand recovery is synchronized with the domestic economy, and there is no special place. In addition, the main mine resources are distributed in China, and their supply improvement is more from the domestic policy level. At present, the current industrial status determines that when the price rises, that is, from the various links of the industrial chain, the upstream concentrate price rises ahead of the downstream material industry, and the increase is even greater.
There is a big commonality behind small metals
"Small metal rotation has certain rules. The next one may have tin, nickel, tantalum, etc., mainly because the market demand for small metals will improve with the recovery of infrastructure investment, new energy vehicles and other industries in the future. To boost the price of small metals," said Liu Guangtao, research director of the New Era Securities R&D Center.
Yang Ning, the chief guest commentator of the Gu Gu master, believes that from the perspective of investment, the basic rule of the non-ferrous plate is to retreat together and there are not many independent markets. Due to the small volume and good volatility, small metals tend to be the pioneers of the sector. However, in the long run, on the one hand, the uncertainty of the colored industry is still very large, especially subject to the international environment. On the other hand, the speculation of price increases is a combination of short and long-term, it is difficult to have a suitable investment schedule, many funds are long-term lurking sideways waiting, it is very difficult for retail investors to grasp.
"The sustainability and height of small metal market, the future depends mainly on the continuous implementation of domestic PPP projects and infrastructure investment, the amplification of production and sales of new energy vehicles; the second is also affected by the international market price, especially the Trump administration. If the one-million-dollar infrastructure investment plan can be implemented, the small metal market will usher in a turning point; third, the small metal market is also highly correlated with the inventory. If the inventory is low, there is a need to replenish stocks. The small metal market is expected to continue." Liu Guangtao said.
However, Wang Wenjing believes that in addition to the recent surge in cobalt, small metal industry chains such as tantalum, tungsten and molybdenum have risen to varying degrees. This is not an isolated incident, and the logic behind its rise has a greater commonality.
Wang Wenjing said that natural de-capacity is the lowest and most simple logic to increase the holding of color metals. A very important variable in the resource industry 2016-2017 is the change in industrial investment. As the growth rate of fixed assets investment in the industry reached a high point in 2005-2007, it showed a long-term decline, especially after 2011, which caused the industry to gradually enter the natural-style de-capacity, superimposing policy-oriented capacity, although the demand has not improved. However, it still causes commodity prices to burst in the short term. The resource industry capacity cycle is entering a new phase.
Judging from this, this increase is not a short-term phenomenon, but a cyclical rise from the local breed to the overall industry. However, precisely because it is different from the demand of commodity bull market and stock market resonance, the rise of non-ferrous metal stocks lags behind metal spot and futures markets, and the market needs time to adapt to this new logic.