The U.S. employment report was higher than expected, and LME continued to go to the Treasury to help raise the price of copper and nickel: according to wind, despite the surge in covid-19 infection cases in January and the closure of some enterprises, the U.S. non-agricultural employment increased by 467000 in January, much higher than expected. Therefore, after the release of the employment report, the possibility of the Federal Reserve raising interest rates by 50 basis points in March increased. In addition, according to sina finance, the European Central Bank has made a hawkish change. President Lagarde will no longer rule out the possibility of raising interest rates during the year. While revising economic expectations and reassessing the bond purchase plan, ECB policymakers will make substantive changes to their forward-looking guidelines. Although overseas, the yield of US Treasury bonds strengthened and the monetary policy of the European central bank turned hawkish, which put pressure on the medium-term commodity prices, the prices of low inventory varieties, such as copper and nickel, that LME continued to destock, still rose during the Spring Festival week.
The closing price of LME copper this week was US $9870.5/t, with a weekly increase of 3.3%, an inventory of 82300 tons and a weekly decrease of 8.8%. LME nickel closed at $23390 / ton, up 2.7% on a weekly basis, with inventories of 88000 tons, down 4.6% on a weekly basis.
The proposal of nationalization of mineral resources in Chile has been preliminarily adopted, the tendency of resource nationalism in South America has increased, and the uncertainty of long-term supply of strategic metals such as copper and lithium has increased:
According to the financial Associated Press, Chile's constitutional assembly has preliminarily adopted a proposal submitted and adopted by the parliamentary Environment Committee, which aims to promote the nationalization of copper, lithium and other strategic assets. This shows that the nationalization of lithium and other mineral resources in Chile has taken a key step. The constitutional proposal approved by the initial vote will hold a second vote in the Committee in mid February, which will be approved by two-thirds of the general assembly. After it is incorporated into the final draft of the constitution, a national referendum will be held to decide whether to incorporate it into the new constitution.
In addition, Mexican President Andres Manuel Lopez Obrador (AMLO) once again held high the banner of resource nationalism and set up a "national lithium company" to be fully responsible for the extraction and development of lithium mines in the country, which also means that foreign enterprises are no longer allowed to develop Mexican lithium mines, even if these companies have previously obtained concessions.
Chile's neighbor, the world's second-largest copper producer, Peru, is also in power as a left-wing leader. Pedro hopes to raise funds through raising mining taxes to increase spending on health care and education, so as to redistribute profits to Andean communities.
According to USGS, the output of copper and lithium in South America will account for more than 39% and 22% respectively in 2020. The rise of resource nationalism in South America will increase the uncertainty of long-term strategic metal supply and improve the cost focus.
The supply of Australian mines was disturbed less than expected, and lithium mines remained in short supply, supporting the price at a high level: according to Pilbara's announcement, affected by the reduction of mining activities, the delay of commissioning of processing plants, the increase of production capacity, the extension of factory shutdown (including planned and unplanned) and labor shortage, the company adjusted the production guidelines for fiscal year 2022 to 400000-450000 tons (the previous value was 46000-51000 tons), The sales guideline is 380000-440000 tons (the previous value is 440000-490000 tons). In addition, the company plans to gradually expand the production capacity of concentrate to 1 million tons. The future expansion projects include: (1) P680 project: the total processing capacity of ngungaju and pilgrim will reach 540000-580000 tons. The company will make a final investment decision as early as 2022q2 to increase the processing capacity of 100000 tons, so that the total capacity of the two processing plants will reach 680000 tons. (2) P1000 project: the concentrate capacity will be increased to 1 million tons, and the final investment decision will be made as early as 2022q4.
The solid-state battery sector is booming, and the market value of SES is up to US $2.4 billion: according to wind information, on the evening of February 4, SES, a developer and manufacturer of mixed lithium metal battery, completed the merger transaction with Ivanhoe capital acquisition company, and was successfully listed on the New York Stock exchange with the new stock code of "SES". As of the closing of US stocks, the market value of SES reached US $2.4 billion. SES, founded in 2012, is the first lithium metal battery enterprise in the world to sign a sample cooperative development agreement with automobile enterprises. In March 2021, SES and GM signed the cooperation of the world's first A-Sample of lithium metal battery for vehicles, and then signed the cooperation agreement of the world's second A-Sample with Hyundai in May. Partners and investors include general motors, Hyundai, Geely, SAIC and sk.
The advantages of SES hybrid lithium metal battery include: 1) the energy density is expected to reach 400wh / kg and 1000WH / L. 2) Charge 80% in less than 15 minutes. 3) Ultra thin lithium metal negative electrode can reduce battery weight and production cost. 4) The proprietary electrolyte and AI algorithm greatly improve the safety and pass the safety tests such as acupuncture, heat resistance, overcharge and external short circuit. 5) Existing infrastructure and processes can be used for large-scale manufacturing.
The funds obtained after the listing of the company will be used for the 1gwha sample battery production line located in Boston, USA and Jiading, Shanghai, China. At the same time, SES plans to start the construction of 10gwh production line of sample B and sample C around 2023. The production line is expected to achieve mass production in 2025, and its products will be commercially loaded at that time. In 2026, it is expected that the second phase of the 30gwh level plant will be planned. By 2028, the total capacity is expected to reach 100GWh, which can meet the battery support of 1 million new energy vehicles around the world. The shares of SES held by Tianqi Lithium Corporation(002466) account for 9.34% of its total share capital before issuance, which is recognized as long-term equity investment in accordance with the equity method.
Risk warning: demand is lower than expected, supply release is higher than expected, etc
