Huaxi: Macro risk appetite rebounds, bulk metal related targets are expected to benefit.

Huaxi released a research report stating that in the short term, tensions in Iran have eased, alleviating market concerns about input-type inflation, and intensifying the market's speculation on future monetary policy by the Federal Reserve. The bank is optimistic about the future price of gold, with enhanced earnings expectations for gold resource stocks. Currently, gold stock valuations are at a low level, so the bank is looking out for opportunities to invest in gold stocks. The macroeconomic logic for silver is similar to gold, but it also has stronger industrial properties. It is expected that in the coming years, the supply-demand gap for silver will continue to widen. Combined with the boost in industrial recovery demand during a loose period, the bank is positive about the future trend of silver prices. Additionally, geopolitical premiums are supporting copper prices at high levels, and there is still a probability of a rate cut by the Federal Reserve this year. In the long term, the bank expects macroeconomic support for copper prices, as the dollar is likely to continue depreciating, making copper a favorable option. As for electrolytic aluminum, the market is currently focused on concerns about downstream consumption decline, leading to a weakening of aluminum prices and sector stocks. However, if there are announcements of intense production cuts and shutdowns in the future, the downward potential for aluminum prices will be very limited, providing an investment opportunity. Beneficiary targets for gold: Chifeng Jilong Gold Mining, Shanjin International Gold, Zhongjin Gold Corp.,Ltd, Shandong Gold Mining, Western Region Gold, Beijing Xiaocheng Technology Stock, Zhuzhou Smelter Group, LINGBAO GOLD, CHINAGOLDINTL. Beneficiary targets for silver: Shengda Resources, Inner Mongolia Xingye Silver&Tin Mining. Beneficiary targets for copper price: Zijin Mining Group, CMOC Group Limited, Jchx Mining Management, Jiangxi Copper, Western Mining, North Copper, Tongling Nonferrous Metals Group, Yunnan Copper. Beneficiary targets for electrolytic aluminum: Shandong Hongqiao Aluminum Industry Holding, Tianshan Aluminum Group, Yunnan Aluminium, Henan Zhongfu Industrial, Henan Shenhuo Coal & Power, Aluminum Corporation Of China, Shandong Nanshan Aluminium, Hebei Huatong Wires & Cables Group. Huaxi's main points are as follows: Precious metals: Safeguarding sentiment has cooled down, and central bank reserves support the upward movement of gold prices. This week, COMEX gold rose by 1.45% to $4,771.00 per ounce, while COMEX silver rose by 3.90% to $76.03 per ounce. The SHFE gold rose by 1.49% to 1,048.36 yuan per gram, and SHFE silver rose by 4.15% to 18,583.00 yuan per kilogram. This week, the gold-silver ratio fell by 2.28% to 62.76. This week, SPDR Gold ETF holdings decreased by 64,299.34 troy ounces, while SLV Silver ETF holdings increased by 860,135.20 troy ounces. On Tuesday, US durable goods orders for February fell by -1.4%, with expectations at -1%, and the previous value revised from 0.00% to -0.5%. The New York Fed's one-year inflation expectation for March is at 3.42%, with expectations at 3.5%, and the previous value at 3.00%. On Thursday, personal spending in the US for February was at 0.4%, with expectations at 0.5%, and the previous value at 0.40%. Initial jobless claims for the week ending April 4th totaled 219,000 persons, with expectations at 210,000, and the previous value revised from 202,000 to 203,000. The final annualized quarterly real GDP for the fourth quarter in the US was at 0.5%, with expectations at 0.7% and the previous value at 0.70%. The core PCE price index for February was at 0.4%, with expectations at 0.4%, and the previous value at 0.40%. The annual rate for the core PCE price index for February was at 3%, with expectations at 3%, and the previous value at 3.10%. The final annualized quarterly rate of the core PCE price index for the fourth quarter was at 2.7%, with expectations at 2.7%, and the previous value at 2.70%. The final quarter real personal consumption expenditure for the fourth quarter in the US was at 1.9%, with the previous value at 2%. Wholesale sales for February in the US rose by 2.7%, with expectations at 0.4%, and the previous value at 0.50%. On Friday, the US annual unadjusted CPI for March was at 3.3%, with expectations at 3.3%, and the previous value at 2.40%. The adjusted CPI for March was at 0.9%, with expectations at 0.9%, and the previous value at 0.30%. The adjusted core CPI for March was at 0.2%, with expectations at 0.3%, and the previous value at 0.20%. The preliminary value for the University of Michigan Consumer Confidence Index in April was at 47.6, with expectations at 52, and the previous value at 53.3%. Factory orders for February in the US were at 0%, with expectations at -0.2%, and the previous value revised from 0.10% to 0%. The preliminary value for the one-year inflation rate in April in the US was 4.8%, with expectations at 4.3%, and the previous value at 3.80%. As the US and Iran engaged in diplomatic talks on a two-week ceasefire agreement, the extreme safe-haven sentiment that had built up due to the conflict has eased slightly. While the temporary ceasefire has led to the withdrawal of some safe-haven funds (as seen in the decreased holdings of the SPDR Gold ETF), the fragile nature of the negotiations and uncertainty about the outcome continue to support the price of gold above $4,700 per ounce, with no significant drop. As the temporary US-Iran ceasefire progresses, safe-haven funds have flowed from the US dollar to risk assets, leading to a decline in the US dollar index. As gold is priced in US dollars, the weakness of the dollar has passively boosted gold prices this week. Despite tactical sales by some central banks deeply affected by geopolitics (such as Turkey) to ease pressure on their currencies, major central banks (like China) continue to increase their reserves. Gold's position as a core asset in the context of "de-dollarization" remains steady, with long-term strategic buying supporting gold prices this week. In the short term, the easing of tensions has directly led to a drop in Brent crude oil prices, easing market concerns about input-type inflation. This has further intensified the market's speculation on the Federal Reserve's future monetary policy, with gold finding a new balance point between "inflation hedging" and "interest rate expectations." In the medium to long term, the current gold bull market is mainly due to the decline in the US dollar's dominance. The weakening of the US dollar, driven by international distrust in the US dollar, has become a historical trend that will provide long-term support for gold. The structural problems in the US GDP make it difficult for interest rate cuts to be rolled back. Geopolitical conflicts persist, tensions are high in the Middle East, and Russia and Ukraine have yet to reach a consensus. The accelerating global trend of "de-dollarization" will continue to drive central banks and investors to buy gold. In the long term, global concerns about currency and debt will benefit gold in the direction of loose debt and currency policies. Benefiting from the rise in gold prices, gold resource stocks have enhanced earnings expectations, and with gold stock valuations currently low, the bank is focused on opportunities to invest in gold stocks. Beneficiary targets: Chifeng Jilong Gold Mining, Shanjin International Gold, Zhongjin Gold Corp.,Ltd, Shandong Gold Mining, Western Region Gold, Beijing Xiaocheng Technology Stock, Zhuzhou Smelter Group, LINGBAO GOLD, CHINAGOLDINTL. The macroeconomic logic for silver is similar to gold, but it also has stronger industrial properties. The price of silver is driven by fundamental, policy, and trading factors. Silver has been listed as a "key mineral" in the US, which has led to continued attention and hoarding, creating an important policy catalyst for rising prices. Although short-term demand has declined slightly, supply-side gaps remain significant, providing a core fundamental support for silver prices. Combined with the boost in industrial recovery demand during a loose period, the elasticity of silver prices is significantly higher than that of gold, making it likely to rise in a loose environment with resonant industrial demand. The silver sector is currently in a phase of bottoming out and consolidation. While short-term pressures from the strong US dollar and delayed interest rate cuts have suppressed silver prices, there remains value in the medium to long term. Beneficiary targets: Shengda Resources, Inner Mongolia Xingye Silver&Tin Mining. Basic metals: Macroeconomic expectations are warming up, benefiting metal prices. This week in the LME market, copper rose by 4.03% to $12,857.00 per ton, aluminum rose by 1.15% to $3,509.50 per ton, zinc rose by 2.16% to $3,335.00 per ton, and lead decreased by 0.13% to $1,930.50 per ton. This week in the SHFE market, copper rose by 2.28% to 98,440.00 yuan per ton, aluminum fell by 0.20% to 24,610.00 yuan per ton, zinc rose by 0.11% to 23,615.00 yuan per ton, and lead fell by 0.60% to 16,685.00 yuan per ton. Copper: The easing of geopolitical risks, coupled with tight supply at the mine end, support the steady rise in the copper price center. In terms of macroeconomic fundamentals, this week's progress in negotiations for the US-Iran ceasefire agreement is a "barometer" of market sentiment. Although the fragile ceasefire expectations have somewhat dampened safe-haven sentiment, the potential risks in the Strait of Hormuz have not been completely resolved, and geopolitical premiums are supporting copper prices at high levels. As geopolitical tensions shift from extreme confrontation to diplomatic mediation, safe-haven funds are partially leaving the US dollar, which has directly pushed up London copper priced in US dollars. On the supply side, the global copper mine supply remains tight. Recent bottlenecks in port infrastructure in major producing countries like Chile and Peru, as well as downgraded annual output expectations from major mines (such as Sandfire), have heightened material supply concerns. The copper concentrate treatment charge (TC) has remained historically low, putting significant cost pressure and maintenance expectations on domestic smelters. The steady destocking by domestic social inventories this week is partially due to limited arrivals at the smelters. In terms of demand, entering the traditional peak season in April, the operating rate for refined copper rods in China for March exceeded expectations, with downstream sectors such as the power grid and home appliances showing stable performance. The growing demand in emerging sectors related to "new productive forces" like green energy (solar PV, wind power) and the integrated circuit industry continues to drive growth. Government support for technological innovation and industrial upgrades (such as tax breaks) further boosts confidence in medium to long-term demand. Regarding inventories, this week, SHFE inventories decreased by 34,604 tons or 11.49% to 265,000 tons compared to the previous week. LME inventories increased by 28,300 tons or 7.77% to 392,800 tons compared to the previous week. COMEX inventories decreased by 1,273 tons or 0.22% to 586,500 tons compared to the previous week. The anticipations of tempering safe-haven sentiment, but for the evolving potential risks in the Strait of Hormuz, despite the easing of extreme conflicts, has not completely removed the geopolitical risks. In the medium to long term, copper, as a key metal for energy transformation, holds strategic value under the policy guidance of the "Thirteenth Five-Year Plan." From the supply side, entering 2026, major mines globally continue to suffer strikes and shutdowns this year, indicating the persistent supply constraints. On the macro level, there remains a probability for a rate cut by the Federal Reserve this year, and in the long term, macroeconomic support keeps the copper price strong. The outlook in particular challenges the global expectation of continued depreciation of the US dollar, favoring copper price stability. In addition, strong fundamental supply and demand dynamics are supporting copper prices. China's macroeconomic support may continue to strengthen measures in technology innovation, and the stimulating measures in sectors such as electric power infrastructure, new energy vehicles, and home appliances may further expand. Beneficiary targets: Zijin Mining Group, CMOC Group Limited, Jchx Mining Management, Jiangxi Copper, Western Mining, North Copper, Tongling Nonferrous Metals Group, Yunnan Copper. Aluminum: Extended restart periods for aluminum plants in the Middle East, global supply chains facing restructuring. From the macro viewpoint, as the Middle East diplomatic negotiations progress, the worries about extreme conflict have alleviated, leading to a resurgence of global risk appetite and weakening of the US dollar, which has provided an upward momentum for aluminum prices. On the supply side, China's operating capacity for electrolytic aluminum is approaching 45 million tons, severely limiting incremental space. Despite a small recovery in production due to improvements in electricity in Yunnan, large-scale supply shocks are unlikely in the short term. Since the end of March, critical aluminum plants in regions such as the UAE (EGA Al Taweelah smelting pot) and Bahrain (Alba) have experienced attacks or disruptions, with complex repairs to damaged infrastructure and the complicated reinitialization of smelting pots, requiring up to a year for complete restoration. Iran, as a major producer, has preemptively reduced production by around 50,000-80,000 tons due to the blockade of raw materials (alumina) import routes and safety concerns, facing the risk of complete shutdown. Currently, Asian second-quarter aluminum premiums have been raised to $220 per ton, a 25% increase, reflecting the heightened challenge in obtaining metal from the Persian Gulf. On the demand side, April marks the traditional peak season for aluminum consumption, with improved operating rates for downstream aluminum processing enterprises. While downstream-profile and strip-foil industries show resistance to high aluminum prices, rigid restocking demand remains. The demand for high-quality aluminum in sectors like solar frames and lightweighting components for new energy vehicles continues to surge, offsetting the sluggish demand in traditional real estate fields. Regarding the raw materials side, the alumina market is still facing an oversupply situation. However, there is a high likelihood that the Guinea government will demand that mining companies limit exports to the levels specified in their mining plans. In anticipation of this, some Guinea mining companies have been exceeding their actual capacity far beyond the production plans stated in their mining licenses. The government has considered restrictions on production, but it is more feasible to force companies to limit exports to the quantity specified in their mining licenses. The rising costs of raw material procurement may push up the smelting costs of electrolytic aluminum, driving high-cost capacity to reduce production, further strengthening the logic of supply tightening. Inventories this week: SHFE inventories decreased by 4,224 tons or 0.90% to 47,430 tons compared to the previous week. LME inventories decreased by 12,800 tons or 3.11% to 399,200 tons compared to the previous week. With a solid certainty of supply contraction, electrolytic aluminum capacity in the Middle East accounts for nearly 9% of global capacity, with 6% of global capacity already confirmed stopped, adding regional shutdown risks to geopolitical tensions. Additionally, the continuity of reductions from high electricity cost production areas like Europe, the US and Australia, as well as Africa (Mozambique has already ceased 580,000 tons of capacity), could potentially lead to 1.5-2 million tons per annum of potential output reduction. Despite the market's focus on concerns about downstream consumption of electrolytic aluminum, wherein aluminum prices and sector stocks have weakened concurrently, should announcements about concentrated production cuts and shutdowns follow, there is significantly limited downward potential for aluminum prices, posing as a value proposition to monitor. Beneficiary targets: Shandong Hongqiao Aluminum Industry Holding, Tianshan Aluminum Group, Yunnan Aluminium, Henan Zhongfu Industrial, Henan Shenhuo Coal & Power, Aluminum Corporation Of China, Shandong Nanshan Aluminium, Hebei Huatong Wires & Cables Group. Zinc: Macroeconomic warming and reduced overseas inventories are benefiting zinc prices. Macroscopically, the temporary easing of geopolitical tensions has led to a global rebound in risk appetite, while a weakening US dollar is providing upward flexibility for zinc prices. Industrially, this week's core DRIVE is the extreme tightness in overseas supplies, with the accelerated destocking of LME warehouses causing concerns about a shortage in the global spot market, forming a clear "strong outside and weak inside" pattern. While domestic markets are currently in a seasonal accumulation phase, the low TC rates for ore processing, expectations of smelter reductions, and the stable recovery in downstream galvanizing and die-casting industries continue to support zinc prices. Inventories this week: SHFE inventories decreased by 2,456 tons or 1.67% to 14,490 tons compared to the previous week. LME inventories decreased by 2,025 tons or 1.78% to 111,900 tons compared to the previous week. Lead: The market remains stable, with lead prices experiencing narrow fluctuations. For the lead market this week, prices have remained relatively stable, reflecting a mild response following the warming of macroeconomic fundamentals in the basic metals sector. This stability is supported by a balance of supply and demand in the lead market: on the supply side, recycled lead production faces environmental and raw material constraints, resulting in incremental releases that fall short of expectations; on the demand side, the lead-acid battery market is transitioning from the traditional off-season to the peak season, with domestic inventory slightly congested but continued overseas destocking lending effective support to LME lead prices. The price of lead this week mostly follows the passive follow-through of the commodity bull market atmosphere. Inventories this week: SHFE inventories increased by 1,335 tons or 2.42% to 56,500 tons compared to the previous week. LME inventories decreased by 3,425 tons or 1.22% to 278,200 tons compared to the previous week. Minor metals Magnesium: Weak demand support, price trend slightly bearish. The price of magnesium ingots fell by 0.89% to 18,890 yuan per ton compared to the previous week. On the demand side, downstream inventories remain abundant after restocking, leading to cautious procurement practices. After stabilizing at around 17,500 yuan per ton, downstream buyers have been driving price reductions to maintain demand at lower volumes. Overseas demand remains weak, limiting domestic market