The supply of rare earth quota is expected to increase, and the profits of smelting separation enterprises may benefit from the increase of volume and price: according to Shanghai Nonferrous Metals network, the Ministry of industry and information technology timely organized and held a "Symposium on promoting the development of rare earth application industry". Chang Guowu, deputy director of the Department of raw materials industry of the Ministry of industry and information technology, said that the Ministry of industry and information technology is very concerned about the sharp rise in rare earth prices and its impact on upstream and downstream industries, and will respect and collect the opinions and suggestions of the association and all parties, negotiate and coordinate with relevant national ministries and commissions as soon as possible, adopt appropriate ways to regulate and control, and increase quota supply according to market demand, Comprehensively promote and promote the coordinated, healthy and sustainable development of rare earth permanent magnet industry chain. Recently, the price of SMM praseodymium and neodymium oxide has shown an accelerated upward trend. There is still a gap between the supply and demand of rare earth in 2022, and the increment at the supply end is relatively rigid. In addition to distribution, the American mine and Myanmar mine in the imported mine are relatively stable, while the waste recovery mine is limited by environmental protection inspection and other factors, so it is difficult to release on a large scale. The demand side benefits from the pull of terminal industries such as new energy vehicles, permanent magnet motors and home appliance wind power, and the pattern of supply and demand shortage is expected to be maintained. The orderly release of rare earth quotas may alleviate the tension between supply and demand to a certain extent. Smelting and separation enterprises that obtain quota increment benefit from high prices and volume increase, and the profit level is expected to be further expanded. Looking back on history, China's rare earth mining index in 2021 increased by 28000 tons (converted into rare earth oxide) compared with that in 2020, all of which are light rare earth ore indexes; In 2020, China's rare earth mining indicators increased by 8000 tons compared with 2019, which are also all indicators of light rare earth mines. In terms of indicators, in 2021 China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) group increased by 26800 tons and southern rare earth group increased by 1200 tons.
The crisis in Ukraine and Russia has deepened concerns about overseas electrolytic aluminum supply: Recently, Ukraine Russia relations have deteriorated, and the two sides have deployed a large number of military personnel and equipment in the border areas. Sina News reported that the United States does not agree with Russia's demands, and the negotiation situation is further tense. According to the annual report released by BP, Russia has the largest proven natural gas reserves in the world in 2021. Russia's pipeline gas supply accounted for about 35% of Europe's total natural gas imports in 2021. It is an important energy supplier in Europe. The crisis in Ukraine and Russia has deepened, and the market's concerns about the energy pressure of European refineries have further deepened. In addition, the market is also worried about the supply of electrolytic aluminum in Russia. In 2021, China imported 1.58 million tons of electrolytic aluminum, and Russia imported 18.4%. Referring to the United States announced sanctions against Rusal in April 2008, Rusal was not allowed to be included in the list of LME delivery brands, resulting in extreme inventory tension. LME aluminum soared by $2550 / ton. Overseas electrolytic aluminum prices may remain high due to supply disturbance for a period of time, and China electrolytic aluminum plant is expected to maintain a good profit level. In addition to electrolytic aluminum, whether the tension between Ukraine and Russia will have an impact on nickel cobalt fundamentals has also attracted much attention. According to Argus metals, traders are closely watching whether the incident will affect nornicke, Russia's largest nickel and cobalt producer. Nornickel produces 1800-2100 tons of cobalt a year, and although most of it comes from its factories in Finland, Western banks may be reluctant to finance companies that produce or process sanctioned materials.
The first batch of model y equipped with 4680 batteries will be delivered at the end of the first quarter, and the nickel lithium sector may be boosted: (1) according to the financial Associated Press, Tesla said that 4680 batteries will be carried on the car at the Texas super factory, and the delivery can be started after the certification is completed in the first quarter of 2022. The 4680 has a large capacity or benefits the ternary development of power, and continues to be optimistic about the demand for ternary materials, especially high nickel ternary materials: 1) the main advantages of 4680 are reflected in battery capacity, production cost and production efficiency. According to SMM, the capacity of 4680 battery is almost five times higher than that of 21700 battery. On the one hand, the increase of battery capacity improves the endurance mileage; On the other hand, it will also reduce the number of cells in the pack and save costs. 2) According to SMM, in 2021, the output of high nickel ternary materials in China was 147900 tons, and the permeability (accounting for the proportion of ternary total cases) reached 35.1%. Among them, the output in December was 18900 tons, and the permeability exceeded 40%. On the one hand, under the continuous optimistic long-range performance, the high nickel demand brought by the launch of high nickel models such as Mercedes Benz EQA, BMW IX, Ford mustangmach-e and Volkswagen id.6x. On the other hand, the main advantage of 4680 battery is the improvement of energy density, and the improvement of battery technology is also expected to open incremental space for the growth of high nickel. (2) High nickel ternary at the demand side drives large-scale production, and lithium hydroxide production capacity at the supply side is released or limited by the shortage of spodumene resources. We continue to be optimistic about companies with high resource ownership rate and good logic of large-scale production of lithium hydroxide.
Risk warning: demand is lower than expected, supply release is higher than expected, etc
