First Capital Securities: Industrial metals prices weaken in the non-ferrous industry, gold prices hit new highs

According to the Wisdom Financial APP, First Securities released a research report stating that domestic industrial metal demand has entered the off-season, coupled with increasing expectations of a US economic recession, industrial metal prices may remain weak, and attention can be paid to changes in downstream demand during the off-season. In addition, the expectation of interest rate cuts is gradually fermenting, coupled with the weakening of the US dollar credit system, the price of gold may maintain a high-level volatile trend in the short term.

Industrial metal prices continue to weaken, focusing on changes in downstream demand during the off-season

1. Copper: This week, SHFE copper fell by -2.8% to 76,740 yuan/ton; LME copper fell by -5.94% to $9,290/ton. The total inventory of the three major exchanges increased by 19,835 tons to 552,000 tons, with LME copper inventory increasing by 25,200 tons to 231,400 tons, SHFE copper inventory decreasing by 6,926 tons to 309,200 tons, and COMEX copper inventory increasing by 1,561 tons to 11,400 tons. According to BaiChuan YingFu, this week the average TC price of imported copper ore slightly increased to $5/ton, the CSPT third-quarter processing fee guidance price was set at $30/ton, and spot TC continues to maintain an upward trend.

2. Aluminum: This week, SHFE aluminum fell by -1.97% to 19,615 yuan/ton; LME aluminum fell by -5.6% to $2,350/ton. The total inventory of the three major exchanges decreased by 1,328 tons to 1.2729 million tons, with LME aluminum inventory decreasing by 16,650 tons to 960,100 tons, SHFE aluminum inventory increasing by 3,622 tons to 265,800 tons, and COMEX aluminum inventory increasing by 11,700 tons to 47,000 tons. According to BaiChuan YingFu, this week, domestic social inventory increased by 7,900 tons to 809,900 tons. Yunnan region continues to resume production, with increased production of aluminum bars and aluminum plates in enterprises compared to last week, and overall improvement in aluminum exports. Domestic industrial metal demand has entered the off-season, coupled with increasing expectations of a US economic recession, industrial metal prices may remain weak.

Lithium carbonate prices continue to decline, waiting for the bottom to appear

This week, the price of battery-grade lithium carbonate decreased by -3.68%, with a national average of 86,400 yuan/ton, and the price of battery-grade lithium hydroxide decreased by -1.14%, with a national average of 86,800 yuan/ton. Lithium carbonate inventory decreased by 560 tons to 27,610 tons, while lithium hydroxide inventory increased by 53 tons to 16,250 tons. According to BaiChuan YingFu, this week, lithium carbonate supply slightly decreased but remained high, with relatively sufficient imports of lithium ore and lithium salt. Overall, the lithium carbonate market is still in a supply-demand imbalance, with weak demand support for lithium carbonate prices.

Magnesium prices slightly declined, with no self-left profit in the smelting end

According to BaiChuan YingFu, the price of magnesium in the metal magnesium market slightly decreased this week. As of July 18, 2024, the average price of 99.90% magnesium ingots was 17,749 yuan/ton, a decrease of 50 yuan/ton from the previous week, a decrease of -0.28%; the average price in Shaanxi was 17,730 yuan/ton, a decrease of 130 yuan/ton from the previous week, a decrease of -0.73%. Currently, the profit at the smelting end of magnesium is meager, and there is limited downward space for magnesium prices Rate cut expectations gradually heating up, gold price hits historic high then falls back

Affected by recent disappointing US economic data, uncertainties surrounding the US election, and other factors, this week London spot gold fell by -0.14% to close at $2403.5 per ounce, hitting a historic high midweek; the US dollar index rose by 0.26% to close at 104.38; COMEX gold fell by -0.55% to close at $2402.8 per ounce; COMEX silver fell by -5.22% to close at $29.41 per ounce. Rate cut expectations are gradually brewing, coupled with weakening US dollar credit system, gold prices may maintain a high-level volatile trend in the short term.

Risk Warning: Macroeconomic demand falling short of expectations, Fed rate cut postponed