New energy vehicles and batteries have maintained rapid growth. According to the data of China automotive power battery alliance, in January 2022, China’s battery output totaled 29.7gwh, with a year-on-year increase of 146.2% and a month on month decrease of 6.2%. In January 2022, China Shipbuilding Industry Group Power Co.Ltd(600482) battery loading volume totaled 16.2gwh, with a year-on-year increase of 86.9% and a month on month decrease of 38.3%. Meanwhile, according to the data of China Automobile Association, new energy vehicles continued to maintain high-speed growth. In January, the production and sales of new energy vehicles were 452000 and 431000 respectively, with a year-on-year increase of 1.3 and 1.4 times, maintaining the momentum of high-speed development last year. The penetration rate of Shanxi Guoxin Energy Corporation Limited(600617) vehicles has reached 17%.
The short-term capacity release of upstream resource end supply is limited. China will usher in the upsurge of lithium resource expansion in 2022. Tianqi, Ganfeng, chuanneng and Yahua all have large-scale production expansion plans, but the actual production in 2022 is relatively limited. Lithium resources are expected to remain in short supply. Nickel stocks are still going out of stock. Lithium carbonate, lithium hydroxide, cobalt and nickel prices continued to rise.
Copper: terminal consumption is lower than expected. Macro aspect: in the FOMC meeting minutes released by the Federal Reserve this week, the market has full expectations for the time point and rhythm of tightening. China’s National Bureau of statistics released the national CPI and PPI in January. The CPI increased by 0.9% year-on-year, 1.5% before and 0.4% month on month. PPI rose 9.1% year-on-year, the previous value was 10.3%, and the month on month decrease was 0.2%. Prices remained stable. Fundamentals: this week’s copper reserves totaled 31500 tons, mainly 35000 tons in China. After the Spring Festival, the downstream construction is not ideal. According to SMM statistics, the terminal consumption of cables has not increased significantly, and the operating rate of copper rods during the week was only 58.95%. In the case of weak downstream consumption and poor macro expectation, the only factor that can support the copper price is that the global copper inventory remains low. At present, the expansion of ore supply is smooth, and the maintenance of smelter will be ushered in from March to April, which will improve the TC probability and benefit the smelting profit.
Aluminum: China’s aluminum processing has recovered steadily, with strong aluminum fundamentals. Macro aspect: Russia Ukraine relations continue to be tense, and the price of natural gas in Europe remains high. If the conflict escalates again, the energy transmission will be blocked, which will have a great impact on the production of electrolytic aluminum in Europe. Fundamentals: global aluminum inventories were basically flat this week, with 25000 tons of LME and 25000 tons of China. According to SMM statistics, the inventory of aluminum rods has decreased, while the operating rate of downstream aluminum processing enterprises has increased steadily, and the operation of aluminum profiles, aluminum sectors and strips and aluminum cables has recovered rapidly. March is the peak season of traditional consumption in China, and aluminum fundamentals are still strong.
Focus on: Sinomine Resource Group Co.Ltd(002738) , China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Tianqi Lithium Corporation(002466) .
Risk tip: the macro environment changes, the demand is lower than expected, and the policy uncertainty increases.
