Report summary:
The 154 environmental protection and public utility stocks we tracked outperformed the Shanghai index by 0.66 percentage points this week. Year to date outperformed the Shanghai Composite Index by 21.33 percentage points. This week Tus Environmental Science And Technology Development Co.Ltd(000826) , Beijing Huayuanyitong Thermal Technology Co.Ltd(002893) , Poten Environment Group Co.Ltd(603603) rose 21.13%, 16.11% and 15.05% respectively, showing a good performance; Kingland Technology Co.Ltd(000711) , China National Nuclear Power Co.Ltd(601985) , Sdic Power Holdings Co.Ltd(600886) fell by 16.10%, 6.76% and 5.89% respectively, with poor performance.
The global price of lithium salt still rises, and the valuation of lithium concentrate rises to 4500 US dollars / ton
On February 17, fastmarkets evaluated the price of battery grade lithium hydroxide in China at 390000-410000 yuan / ton, an increase of 50000 yuan / ton month on month; The quotation for battery grade lithium carbonate in China is 440000-470000 yuan / ton, an increase of 40000 yuan / ton month on month. After the end of the Chinese Spring Festival holiday, the maintenance and shutdown of lithium salt processing plants have resumed one after another, and the output supply has increased. However, due to the continuous expansion of downstream cathode materials and strong demand for lithium salt, the price of lithium salt in the upstream has continued to increase. The strong lithium salt price in the Chinese market supports the rapid rise of lithium salt prices in the East Asian shipping market and the European and American markets. Fastmarkets evaluated the CIF price of battery grade lithium carbonate in China, Japan and South Korea at 58.5-63 US dollars / kg, up 3.25 US dollars / kg month on month; The CIF evaluation price of battery grade lithium hydroxide in China, Japan and South Korea was US $55.5-58.0/kg, up US $3 / kg month on month.
In 2021q4, five mines in Australia produced 496300 tons of lithium concentrate in 2021q4, a month on month decrease of 5.05%. On the one hand, affected by the labor shortage under the epidemic in Australia, on the other hand, the mining recovery rate of re production projects is lower than expected. As the supply side increment is less than the demand increment, the concentrate price is stimulated to rise rapidly. On February 17, fastmarkets evaluated the price of lithium concentrate (SC6) at $3750 / ton, up $500 / ton from two weeks ago. On February 18, Platts energy information estimated that the price of lithium concentrate (SC6) was US $4500 / ton (FOB, Australia), up US $900 / ton from last week. At present, the concentrate price evaluated by major overseas institutions is much higher than the price of long-term association in the first quarter. We judge that under the background of insufficient supply and strong demand for lithium concentrate, the price of lithium concentrate will maintain a strong upward trend.
“Counting from the east to the west” is fully launched, which will significantly increase the proportion of green energy use.
Recently, the national development and Reform Commission and other departments jointly issued a notice, agreed to start the construction of National Computing hub nodes in 8 places, and planned 10 national data center clusters. When answering reporters’ questions, the responsible comrades said that most of China’s data centers are distributed in the eastern region. Due to the increasing shortage of land, energy and other resources, it is difficult to sustain the large-scale development of data centers in the eastern region. Western China is rich in resources, especially renewable energy, and has the potential to develop data centers and undertake the computing power needs of the East. The responsible comrades pointed out that the implementation of the project of “counting from the east to the west” is conducive to promoting green development. Increasing the layout of the data center in the West will greatly increase the proportion of green energy use, absorb green energy in the West nearby, and continuously optimize the energy use efficiency of the data center through technological innovation, large for small, low-carbon development and other measures. In addition, it is also proposed to strengthen the linkage of energy layout. Strengthen the integrated design of data center and power network, and promote renewable energy power generation enterprises to supply power to the data center. Support data center clusters and supporting renewable energy power stations. The official and comprehensive launch of “counting from the east to the west” will help to increase the proportion of China’s green energy consumption, solve the problems of green power consumption caused by the mismatch of power resources between the East and the west, and accelerate the development of green power in China.
Coal supply continued to recover, and the power coal market declined as a whole.
The China Shipbuilding Industry Group Power Co.Ltd(600482) coal market declined as a whole this week. In terms of origin, the resumption of production of China’s private coal mines continued this week. After the Lantern Festival, the number of resumed production coal mines increased significantly, and the coal supply continued to recover. The mainstream large mines gave priority to the delivery of long-term cooperation and guaranteed supply of coal, with the rest for land sales. Downstream power plants generally have low enthusiasm for coal procurement in the market. The demand mainly comes from non power users such as chemical industry, but the procurement is also carried out on demand. This week, the coal mines in the main production areas successively took the initiative to reduce the pit mouth price, and the decline has expanded below the market price. In terms of downstream demand, Chinese downstream users were in a heavy wait-and-see mood this week, and procurement was mainly carried out on demand. At present, the inventory of main power plants continues to operate at a high level, and the purchase enthusiasm is not high; The downstream demand for coal in the market mainly comes from non power users such as chemical industry and steel.
China’s average LNG price continued to rise, while US natural gas fell first and then rose.
In terms of supply, the output of China’s LNG plants increased this week compared with that before the festival, but the liquid level of some liquid plants was low, and the market supply was still insufficient. Although the shipment volume of tank batch at the terminal increased, the quantity before the festival was still low. In terms of demand, the downstream demand is good in the near future. Affected by the tight supply of pipeline gas, the demand of downstream urban fuel users for LNG replenishment has increased significantly, resulting in the continuous rise of the price of liquid plants with small inventory. Based on the overall supply and demand situation, the LNG supply may be dominated by stable behavior next week, and the consumption may rise slightly. There are certain factors supporting the price on both sides of supply and demand. In this cycle, the US natural gas market as a whole operated from decline to rise. In the early stage of the cycle, operators generally believe that spring is coming, and the warm temperature will reduce the demand for natural gas heating, which will have a negative impact on the market. In the later period of the cycle, due to the influence of relevant geographical relations between Russia and Ukraine and other factors, practitioners are more worried about Russia’s natural gas supply to Europe, believing that the United States may enhance Europe’s natural gas exports and support the U.S. natural gas market. In the short term, relevant meteorological agencies predict that the United States will cool again from the end of February to the beginning of March, and the temperature will be lower than the normal year in the same period. Therefore, this will stimulate the demand for natural gas power generation and heating in the United States and boost the market.
Investment advice
Lithium is an upstream raw material necessary for the vigorous development of electric vehicles for a long time in the future. Countries have transferred lithium resources to national strategic resources, which means that overseas acquisitions will be affected not only by previous geopolitics, but also by countries’ concerns about future industrial development. Overseas lithium resource acquisitions will become more difficult than before, At the same time, it also affects the release rate of global medium and short-term lithium resource production. 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 18, 2022, the price of electric carbon has risen to 435000 yuan / ton. It is expected that the price of Q1 will continue to rise 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. 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.
