Data shows that the industrial prosperity index continues to rebound within the "normal" range. In April 2021, China's non-ferrous metals industry prosperity index showed that it was 50.5, up 4.2 points from the previous month. Overall, the recent prosperity index is still contin

Figure 1 China's non-ferrous metal industry prosperity index trend chart

Figure 2 China's non-ferrous metal industry prosperity light chart

pioneer synthetic index continues to rebound

April 2021 pioneer index 110.6, up 1.7 points from the previous month. Among the seven indicators that constitute the leading index of the non-ferrous metals industry, all indicators are in the "normal" range. After seasonal adjustment, three indicators with obvious year-on-year growth include LMEX index, automobile production and commercial housing sales area index, with an increase of 40.2%, 30.3% and 26.4% respectively; the month-on-month growth is generally small, while the more obvious one is the LMEX index, with an increase of 4.1%.

Figure 3 China's non-ferrous metal industry synthesis index curve

Domestic non-ferrous metal industry continues to be positive

Internationally, in April, the global economy showed a steady recovery momentum, but the structural and regional differentiation was relatively serious, which was prominently reflected in the supply side being faster than the demand side, the United States is faster than Europe and Japan, and the Asia-Pacific is faster than Africa and Latin America. The COVID-19 pandemic has had a severe impact on the supply and demand side, but the impact on the demand side is even more serious. With the advancement of resumption of work and production, the industrial chain and supply chain gradually recovered. In April, the US manufacturing PMI index 60.7 was at a historical high; the euro zone manufacturing PMI rose by 0.4 percentage points from the previous month to 62.9, a record high. In addition, production indicators such as OECD comprehensive leading indicators have basically returned to or even exceeded the pre-epidemic level, but residents' consumption willingness has not improved significantly. The United States recovered significantly faster in developed economies than in the euro zone and Japan, and the Asia-Pacific region in emerging countries recovered faster than in Africa and Latin America. It is expected that as the number and proportion of new crown vaccinations in the world continue to increase, the epidemic will also improve, and the global economic recovery will further accelerate.

Domestic, the Chinese government has achieved positive results in effectively integrating epidemic prevention and control and economic development. All economic indicators performed well in April, and the economic operation continued the stable recovery trend since last year. The economic cycle is becoming increasingly smooth, and market expectations are constantly improving. Fixed asset investment has grown steadily, the manufacturing structure continues to improve, real estate remains resilient under the pressure of multiple policies and regulatory while infrastructure is lower than expected under the influence of the climate. According to the latest data released by the Bureau of Statistics on May 11, due to factors such as the Qingming Festival and the weakening of construction momentum, domestic consumption demand continued to recover in April, and prices were generally stable. CPI rebounded moderately by 0.9% year-on-year, and the increase of increased by 0.5 percentage points from the previous month; it decreased by 0.3% month-on-month, and the decline narrowed by 0.2 percentage points from the previous month. However, due to the rising prices of international commodities such as iron ore and non-ferrous metals, prices in the production field continued to rise, resulting in a year-on-year increase of 6.8% and a month-on-month increase of 0.9%. In terms of foreign trade, import and export data performed well under the conditions of joint recovery of domestic and foreign demand. The overall macroeconomic economy is improving, but it should also be noted that the current regional situation is still complex and severe, with many variables, and the foundation for the full recovery of my country's economy is not yet solid.At the same time, it should also be noted that the proliferation of liquidity such as the US dollar forces the upstream price increase effect to transmit to the middle and lower reaches, as well as the problems and risks of the overall price increase in economic operations. In terms of the industry, the non-ferrous metals industry produces steadily, and the output of major metals continues to increase. The output of ten commonly used non-ferrous metals was 5.483 million tons, an increase of 12.7% year-on-year. Among them, the production of refined copper was 870,000 tons, an increase of 18.3% year-on-year; the production of primary aluminum was 3.276,000 tons, an increase of 8.5% year-on-year. In terms of the market, the price of copper, aluminum, lead and zinc in the domestic and foreign markets has risen gratifyingly, and has successively set new stages of highs. Taking copper as an example, the high point of LME copper price in April 2021 exceeded the integer mark of US$10,000/ton in April 2021. LME copper opened at at 8,782 tons, and the highest was US$10,008 tons; internal Shanghai copper overall was consistent with the trend of the foreign market. The main contract of Shanghai copper in April rose to 73,060 yuan tons. In April 2021, the average price of SHFE for the month and three-month copper was 68,972 yuan tons and 68,615 yuan tons, respectively, up 65.3% and 66.1% year-on-year, and 4.0% and 2.9% month-on-month respectively. The situation of aluminum is basically similar. The price of LME's three-month aluminum in the LME period exceeded US$2,400/ton, with an average price of US$2,332/ton, an increase of US$208/ton month-on-month; the price of SHFE's three-month aluminum in the aluminum period exceeded RMB19,000/ton, with an average price of RMB17,948/ton, an increase of RMB1,870/ton month-on-month. The current non-ferrous metal market is optimistic, with copper prices and aluminum repeatedly breaking records. There are many reasons behind this. In summary, there are three main points: 1. my country's economic control has been continuously restored after the epidemic, especially the supply side has performed very well; 2. The implementation of monetary easing policies on an international scale has led to the spread of liquidity worldwide; 3. The central government's strategic decision to announce that "achieve carbon peak by 2030 and achieve carbon neutrality by 2060" has greatly promoted market sentiment. To this end, we should be clear that the demand side of non-ferrous metals has not improved substantially, and the current irrational price trend has not been supported by fundamentals. Therefore, we still need to be vigilant and take timely measures to deal with the situation that the Fed will tighten global liquidity once the austerity policy is adopted.

Overall, under the premise that the overseas economic recovery expectations are optimistic and the domestic macro atmosphere will still be warmer, we believe that the non-ferrous metals boom index is expected to operate within the "normal" range in the near future and is expected to continue to rebound.

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