The 154 environmental protection and public utility stocks we tracked lost 0.32 percentage points to the Shanghai index this week (January 24-28) and 3.85 percentage points to date. This week Kingland Technology Co.Ltd(000711) , Shenyang Huitian Thermal Power Co.Ltd(000692) , Focused Photonics (Hangzhou) Inc(300203) rose 51.09%, 4.59% and 3.97% respectively, showing good performance; Sichuan Xichang Electric Power Co.Ltd(600505) , Guangxi Bossco Environmental Protection Technology Co.Ltd(300422) , Xinjiang Tianfu Energy Co.Ltd(600509) fell by 20.52%, 18.42% and 18.08% respectively, with poor performance.
The long-term price of lithium concentrate rose rapidly, and pilbara2022q1 rose to US $2600-3000 / ton
On February 3, fastmarkets evaluated the price of battery grade lithium hydroxide in China at 290000-310000 yuan / ton, unchanged month on month; The quotation for battery grade lithium carbonate in China is 350000-370000 yuan / ton, unchanged month on month. During the week from January 31 to February 4, the price of lithium salt remained unchanged due to China’s Spring Festival holiday. Most prices in the Asian shipping market remained stable due to the impact of China’s holiday break. On February 3, fastmarkets evaluated the CIF price of battery grade lithium carbonate in China, Japan and South Korea at US $44-47 / kg, unchanged month on month; The CIF evaluation price of battery grade lithium hydroxide in China, Japan and South Korea is US $41-43 / kg, unchanged month on month. On February 3, fastmarkets evaluated the price of lithium concentrate (SC6) at US $3250 / ton, up US $625 / ton from the previous month. On February 4, Platts energy information estimated that the price of lithium concentrate (SC6) was 3500 US dollars / ton (FOB, Australia). Pilbara said in the fourth quarter report that the long-term association price of 2022q1 lithium concentrate (SC6) is expected to be about US $2600-3000 / ton. At present, the price assessed by Platts energy information is much higher than that of the long-term association in the first quarter. We judge that the price of lithium concentrate will continue to rise under the background of insufficient supply and strong demand.
In 2021, the development of renewable energy will reach a new level and the scenery will be brilliant.
By the end of 2021, China’s installed capacity of renewable energy had exceeded 1 billion kw, reaching 1.063 billion kw, accounting for 44.8% of the total installed power generation capacity. Among them, the installed capacity of wind power and photovoltaic power generation exceeded 300 million KW, and the installed capacity of offshore wind power jumped to the first in the world. In 2021, China’s renewable energy installed capacity increased by 134 million kilowatts, accounting for 76.1% of the country’s new power generation installed capacity. Among them, 23.49 million kilowatts of hydropower, 47.57 million kilowatts of wind power, 54.88 million kilowatts of photovoltaic power generation and 8.08 million kilowatts of biomass power generation were added, accounting for 13.3%, 27%, 31.1% and 4.6% of the country’s new installed capacity respectively. In 2021, the power generation capacity of renewable energy increased steadily, reaching 2.48 trillion kwh, accounting for 29.8% of the power consumption of the whole society. Among them, hydropower was 1340.1 billion kwh, a year-on-year decrease of 1.1%; Wind power 652.6 billion kwh, an increase of 40.5% year-on-year; Photovoltaic power generation was 325.9 billion kwh, a year-on-year increase of 25.1%; Biomass power generation was 163.7 billion kwh, a year-on-year increase of 23.6%. Hydropower, wind power, photovoltaic power generation and biomass power generation account for 16.1%, 7.9%, 3.9% and 2% of the total electricity consumption of the whole society respectively. In the context of the “double carbon” goal, the rapid development of new energy installed capacity, accelerating China’s low-carbon green transformation of energy and increasing the utilization of renewable energy in China are in line with the development goal of China’s green energy consumption.
The overall power coal market is operating at a high level, and the demand of downstream parts is released to support the coal price.
This week (January 24-28) China Shipbuilding Industry Group Power Co.Ltd(600482) coal market is running at a high level as a whole. In terms of origin, the Spring Festival is approaching. This week, the number of coal mines that have stopped production and reduced production in China continues to increase. At the same time, it is more difficult to invite trains in the railway plan, and the overall supply in China is tighter than that in the early stage; However, the demand of downstream users for reserve storage before the festival is still released, and the supply and demand pattern is slightly tight, which continues to support the power coal market of origin. As the Spring Festival holiday approaches, both supply and demand are expected to weaken, and the price is likely to stabilize in the later stage. In terms of downstream demand, the replenishment of China’s main power plants this week is mainly based on the long-term association, and the pre holiday reserve demand of some small and medium-sized power plants, chemical and other non power users is still released, which supports the origin market; The actual transportation of downstream users in coastal areas is mainly rigid demand.
The average price of LNG in China rose first and then declined, while that of natural gas in the United States fell first and then rose.
In terms of supply, the output of China’s LNG plants continued to decline month on month this week (January 24-28), and the shipment volume of tank batch at the terminal decreased significantly; In terms of demand, China has been affected by rain and snow recently, and the temperature has decreased. However, due to rain and snow, high-speed traffic restrictions are caused in many places, and the shipment of liquid plants is blocked. Under the influence of the approaching Spring Festival holiday, liquid plants mostly adopt the price for volume strategy. However, at present, industrial users and transportation enterprises have holidays one after another, and the downstream demand continues to shrink, and the low price strategy is still difficult to boost the downstream demand. Based on the overall supply and demand situation, the reduction space of LNG supply and demand is expected to continue to expand next week. Therefore, it is expected that the subsequent LNG price may be stable in the middle and down. In this cycle (January 24-28), the overall US natural gas market first fell and then rose. In the early stage of the cycle, the US natural gas futures market declined due to profit taking by traders and the decline of natural gas prices in Europe; In the later period of the cycle, due to the cold temperature in most parts of the United States and the upward natural gas market in Europe, it has a certain boost to the U.S. natural gas market. The recent strong performance of the international crude oil market may also play a supporting role in the “substitute” natural gas market. In addition, the recent geopolitical tensions in Europe may also have a certain impact on the natural gas market. In addition. Superimposed on the fact that the overall temperature in the United States is still relatively cold, it is expected that the short-term natural gas market will fluctuate at a high level.
Investment advice
At present, countries all over the world regard lithium resources as strategic mineral resources one after another. It is very important to ensure the supply security of lithium metal minerals and establish a local supply chain. At the same time, with the continuous rise in the price of lithium concentrate, the profits of non integrated lithium salt processing enterprises are gradually thinning, and the profits have been largely shifted to the resource side. A typical example is aokuang, which is highly dependent on China’s lithium salt processing plants. In the last cycle, it only earned 30% of the profits of the industrial chain. In this cycle, 70% – 80% of the profits have been transferred to aokuang, which just confirms aokuang’s expectation that the profits of this cycle and China’s lithium salt plants will open at the beginning of the year. In the current context, the competitiveness of integrated enterprises with upstream resource guarantee and incremental resources is significantly stronger. It is recommended to pay attention to the ongoing Lijiagou spodumene mining and beneficiation project. In the future, it will join hands with Dongchuan energy investment to integrate and develop the [ Sichuan New Energy Power Company Limited(000155) ] of lithium resources in Ganzi and ABA. The beneficiary targets include [ Tianqi Lithium Corporation(002466) ] that the greenbushes mine has been increasing production in the next five years and can achieve large-scale output through OEM. It is promoting the [ Youngy Co.Ltd(002192) ] of yuanyangba 2.5 million T / a lithium ore beneficiation project, It is estimated that [ Yongxing Special Materials Technology Co.Ltd(002756) ] will be completed by the middle of 2022, and [ Qinghai Salt Lake Industry Co.Ltd(000792) ] will have a good performance of potassium fertilizer and lithium salt in 2022.
In the process of accelerating the transformation of energy structure to green and low-carbon, the installed capacity of new energy is expected to grow rapidly, and new energy operators benefit from the increase of scale, the improvement of operation efficiency and the thickening of performance. We recommend paying attention to the new energy target of thermal power transformation [ Huaneng Power International Inc(600011) ]; At the same time, [ Cecep Solar Energy Co.Ltd(000591) ] and [ Cecep Wind-Power Corporation(601016) ] new energy operation power stations have benefited, and the targets of Hong Kong stocks have benefited from [Longyuan Power], [China Resources Power] and [China power].
Waste incineration is an industry encouraged and supported by national industrial policies. Promoting the integrated construction and professional operation of urban domestic waste treatment facilities is the development trend of the industry, and professional waste treatment service providers providing integrated investment, construction and operation services will occupy a competitive advantage. Under the policy background of “carbon neutralization and carbon peak”, the waste incineration power generation project will continue to benefit. We recommend paying attention to the leading waste incineration projects [ Dynagreen Environmental Protection Group Co.Ltd(601330) ] and [ Chongqing Sanfeng Environment Group Corp.Ltd(601827) ].
Risk tips
1) the implementation of carbon neutralization related policies is less than expected;
2) the demand for power coal and natural gas decreases seasonally;
3) major changes in power policy;
4) the development progress of lithium mine in Sichuan is less than expected.
