China Post Securities: Gold rebounds in the face of recession expectations, optimistic about the trend of gold prices in 24H2

According to the Wise Finance APP, China Post Securities released a research report stating that in the long term, the increase in the US deficit, geopolitical disturbances, and the nearshoreization of the US supply chain have not changed the central bank's logic of buying gold. The pace of interest rate cuts may accelerate with the weakening of the US employment situation, and the gold market is expected to reopen in H2 2024. In addition, under recession expectations, copper prices remained relatively weak this week; Wa Bang accumulated refined powder resumed transportation, downstream demand for tin is optimistic; antimony prices remain high, and downstream gradually accept it; lithium downstream stocking is completed, and lithium carbonate prices are under pressure.

Precious Metals: After a panic-driven decline, a gradual rebound, and the gold market may open. The optimistic sentiment in the US job market began to cool after the release of last week's non-farm data. This week, the number of initial jobless claims in the US for the week of June 8 was lower than expected, combined with weaker-than-expected US CPI and PPI data, leading to a growing recession expectation in the market. Therefore, although precious metals fluctuated this week, they ultimately closed higher: COMEX gold rose by 1.61%, and silver rose by 1.2%. China Post Securities believes that in the long term, the increase in the US deficit, geopolitical disturbances, and the nearshoreization of the US supply chain have not changed the central bank's logic of buying gold. The pace of interest rate cuts may accelerate with the weakening of the US employment situation, and the gold market is expected to reopen in H2 2024.

Copper: Copper prices remained relatively weak this week under recession expectations. After a significant decline last week, LME copper prices rose by only 0.25% this week, a rebound much weaker than gold and silver. Although the relatively weak economic data in the US this week strengthened expectations of interest rate cuts, it also brought some recession expectations to the market. Market concerns that a too rapid pace of interest rate cuts may imply an increasing risk of recession. In addition, this week's global visible copper stocks increased by 11,475 tons, which may imply weak demand. Therefore, copper prices remained weak. The main variables affecting future copper price trends are the subsequent situation of the US economy. Even if the expectations of interest rate cuts are strong, if a recession occurs too quickly, it may still be more harmful than beneficial for copper prices.

Tin: Wa Bang accumulated refined powder resumed transportation, downstream demand is optimistic. This week, domestic tin ingot social inventory/futures inventory increased by 1.83%/-0.64%, and decreased by 9.23%/10.75% from the peak in late May. LME inventory decreased by 2.71%, showing a slight overall decrease in inventory domestically and internationally. On the supply side, according to Mysteel, the Wa Bang Central Committee approved the Wa Bang Mining Bureau to resume transportation of refined powder in the Manxiang mining area, with accumulated refined powder of about 1000-1200 tons of metal tons, which will be gradually transported to the domestic market later this month. Considering that some major domestic factories will undergo maintenance in mid to late June, the overall supply remains stable. On the demand side, Apple announced the integration of ChatGPT into the new generation of Apple systems, which may lead the AI smartphone trend, drive the recovery of consumer electronics, and boost the recovery trend of semiconductor demand in China, keeping the soldering tin demand optimistic.

Antimony: Antimony prices remain high, and downstream gradually accept it. This week, antimony prices rose slightly by 2.36% to 152,000 yuan/ton, maintaining high prices. There is a significant difference between the actual transaction price and the highest market quotation, with not many transactions, but the upward price trend remains unchanged, and various terminal aspects are slowly accepting the price increase On the supply side, the actual domestic antimony ingot production in May was 6497.93 tons, an increase of 6.77% month-on-month. Although it has increased for two consecutive months, it has not yet recovered to above 7000 tons, and the supply remains relatively tight. Currently, explicit inventory in the market is at historically low levels. After the gradual digestion of potential inventory (scrap, small mines, etc.), it is expected that the antimony price will start a new round of increase.

Aluminum: Off-season demand, sufficient supply of electrolytic aluminum. On the supply side, new production capacity in Inner Mongolia continues to come online, with most of the first phase of capacity already released. Electrolytic aluminum enterprises in Yunnan continue to release production capacity. On the demand side, for aluminum rod enterprises: recent feedback indicates high costs and significant profit pressure, with downstream procurement performance not satisfactory, leading to production cuts. For aluminum plate enterprises: with sales determining production, aluminum plate demand is average, forcing some enterprises to reduce production.

Lithium: Downstream stocking completed, lithium carbonate prices under pressure. This week, lithium carbonate supply is sufficient, with adequate supply of imported lithium ore. However, prices are slowly declining, causing a profit inversion for lithium salt enterprises in external procurement production. Recycling enterprises face high costs, currently experiencing severe price losses, with some companies already reducing production. This month, lithium carbonate imports are sufficient, providing downstream with ample supply. On the demand side: downstream demand is relatively flat, with major factories having sufficient orders and battery factory inventories meeting this month's production needs, with some companies even having excess inventory for external sales.

Investment Advice

It is recommended to pay attention to Zhongjin Gold, Zijin Mining, Xingye Bank Tin, Tin Industry Corporation, Lizhong Group, and CGN Mining.

Risk Warning:

Significant macroeconomic fluctuations, demand falling short of expectations, supply release exceeding expectations, and company project progress falling short of expectations