The 154 environmental protection and public utility stocks we tracked lost 0.49 percentage points to the Shanghai index this week and outperformed the Shanghai index by 20.76 percentage points since the beginning of the year. This week Zhejiang Tuna Environmental Science & Technology Co.Ltd(603177) , Jinneng Holding Shanxi Electric Power Co.Ltd(000767) , Jiangsu Jiangnan Water Co.Ltd(601199) rose 19.26%, 11.54% and 9.88% respectively, showing a good performance; Cecep Wind-Power Corporation(601016) , Focused Photonics (Hangzhou) Inc(300203) , Guangzhou Development Group Incorporated(600098) fell by 11.93%, 11.48% and 9.06% respectively, with poor performance.
The shortage of lithium salt is difficult to alleviate after the year, and the epidemic and labor shortage affect the supply of concentrate. On February 10, fastmarkets evaluated the price of battery grade lithium hydroxide in China as 340000-360000 yuan / ton, up 50000 yuan / ton month on month; The quotation for China’s battery grade lithium carbonate was 400000-43000 yuan / ton, up 55000 yuan / ton month on month. Affected by the maintenance of lithium salt processing enterprises, the supply remained low in February. Due to the continuous shortage of spot supply, the price of lithium salt in China continued to rise after the Lunar New Year holiday. Fastmarkets pointed out that due to the continuous strong price of lithium salt in the Chinese market, it is difficult to alleviate the superimposed supply shortage, resulting in the rapid rise of lithium salt prices in the East Asian market and the European and American market. On February 10, fastmarkets evaluated the CIF price of battery grade lithium carbonate in China, Japan and South Korea at US $44-47 / kg, up 65000 yuan / ton month on month; The CIF evaluation price of battery grade lithium hydroxide in China, Japan and South Korea was US $45.5-48/kg, up 50000 yuan / ton month on month. The epidemic and labor shortage affected the concentrate supply. The concentrate output of Australian mining enterprises in 2021q4 fell month on month. Among them, the concentrate output of MT Catlin in the fourth quarter fell 23% month on month, the concentrate output of PLS in the fourth quarter fell 3% month on month, and the concentrate output of mtmarion in the fourth quarter fell 3% month on month. In this context, some enterprises have also lowered the annual output guidelines for 2022. On February 11, Platts energy information estimated that the price of lithium concentrate (SC6) was US $3600 / ton (FOB, Australia), an increase of US $100 / ton compared with February 4. 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.
Improve the release of opinions on green and low-carbon transformation of energy, and fully support the development of new energy.
On February 10, the national development and Reform Commission and the National Energy Administration issued the opinions on improving the institutional mechanisms and policies and measures for green and low-carbon energy transformation (hereinafter referred to as the opinions). The opinions puts forward 35 policies and measures in 10 aspects around system construction, mechanism innovation, deepening reform and key policies. It is also pointed out that during the “14th five year plan” period, the institutional framework for promoting green and low-carbon development of energy will be basically established, a relatively perfect policy, standard, market and regulatory system will be formed, and the promotion mechanism of green and low-carbon transformation of energy will be constructed. By 2030, we will basically establish a complete basic system and policy system for green and low-carbon development of energy, and form an energy production and consumption pattern in which non fossil energy can basically meet the increment of energy demand, replace the stock of fossil energy on a large scale, and comprehensively enhance the ability of energy security. The opinion proposes to build an energy supply system with clean and low-carbon energy as the main body and improve the effective consumption of clean energy, which will contribute to the development of new energy industry, accelerate the rapid increase of China’s wind, light and other power generation installed capacity, help new energy operating enterprises form scale advantages as soon as possible and promote the healthy development of the industry.
The overall trading activity of the thermal coal market is general, and the future market may maintain a stable operation.
After the festival, private coal mines in China’s main production areas successively resumed normal production, transportation and other links also gradually resumed, and the supply side increased significantly compared with that before the festival; Downstream users mostly stayed on the sidelines, and only a small number of non electric users such as chemical users just needed to be released after the festival. On the whole, the market trading activity in the main production areas after the festival is not high, and the price of thermal coal pithead in some areas decreased significantly in the second half of this week. In terms of ports, the trading atmosphere of the northern port power coal market this week is general, and the actual transaction is limited. After the festival, the trading and trading of the northern port market gradually recovered, but due to the strong uncertainty in the future market, many traders operated cautiously; Downstream users also stayed on the sidelines, with only a small number of tentative inquiries released, and the actual transaction in the market was relatively cold. In terms of import, the trading in the import market is stable and the market wait-and-see mood is strong. As China’s coal market is in the period of adjustment, the state has made every effort to guide the coal market price to return to a reasonable range, the uncertainty factors in the future market have increased, the operators have a high risk of trading, their enthusiasm for transportation is not high, and the transaction atmosphere is cold. In the short term, the import market price is still under pressure. In terms of downstream demand, China’s downstream users have resumed work and production this week. Most of the main power plants continue to digest their own inventory, and their enthusiasm for inquiry and procurement is not high; Only some chemical and other non electric users need to release, but the procurement is mainly small orders. It is expected that the future thermal coal market may maintain a stable operation.
The average price of LNG in China rose after the festival, and the downward trend of natural gas in the United States was the main trend.
This week, the output of China’s LNG plants decreased compared with that before the festival, and the shipment volume of tank batch at the terminal decreased significantly. From the perspective of demand, the inventory consumption of urban gas, gas filling stations and other facilities during the Spring Festival. With the high-speed restoration of the passage of dangerous chemical vehicles after the festival, the demand for replenishment in the downstream has increased significantly. The accumulated inventory of the liquid plant is consumed rapidly during the Spring Festival. The decline of liquid level in the liquid plant and the low supply of “sea and land” dual gas further push up the LNG market price. However, with the short-term price increase is too large, Downstream receiving mentality tends to be cautious. Based on the overall supply and demand, the LNG supply and demand may fluctuate slightly next week, and the LNG price may be dominated by strong operation. The overall downward trend of the US natural gas market in this cycle is dominated. During the cycle, affected by the rain and snow weather in some parts of the United States, the temperature dropped significantly, and even affected some oil and gas production facilities. Therefore, the natural gas futures market was at a high level at the beginning of the cycle; However, some meteorological institutions predict that the temperature in the United States will rise significantly after the middle of February. The industry generally believes that it will suppress the demand for natural gas power generation and heating, resulting in the continuous decline of the market from a high level. At present, the natural gas reserves in Europe have fallen to a historically low level, and relevant institutions said that the occupancy rate of underground gas storage facilities in Germany has decreased to 41.8%. Therefore, the demand for natural gas in Europe will also continue to stimulate the export of natural gas in the United States, which will provide some support for the price of natural gas in the United States. On the whole, the US natural gas market is expected to operate at a high level and fluctuate in the short term.
Investment advice
The epidemic and labor shortage affected the concentrate supply, and the concentrate output of Australian mining enterprises in 2021q4 fell month on month. In addition, Australian enterprises covet the profits of the midstream lithium salt link and extend the industrial chain one after another. The competition for upstream resources of Chinese processing plants is still fierce and the task is arduous. The superposition of geopolitical factors leads to the delay of output release in some regions. Lithium salt prices may remain at a high level for at least two years in order to stimulate and accelerate the process of global resource development. As of February 11, 2022, the price of electric carbon has risen to 400000 yuan / ton. It is expected that the price will continue to rise slightly after the Spring Festival until the lithium carbonate at the end of Q2 Salt Lake returns to normal capacity utilization. Integrated enterprises with guaranteed upstream resources and incremental resources will enjoy the profit elasticity under the high price of lithium salt in 2022.
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. Recommended target of thermal power transformation [{11]; 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
