Report summary:
The 154 environmental protection and public utility stocks we tracked outperformed the Shanghai index by 1.82 percentage points this week. Year to date outperformed the Shanghai Composite Index by 23.56 percentage points. This week, Shenyang Jinshan Energy Co.Ltd(600396) , Ningbo Energy Group Co.Ltd(600982) , Xinjiang Xintai Natural Gas Co.Ltd(603393) rose by 20.62%, 19.91% and 17.02% respectively, showing good performance Kingland Technology Co.Ltd(000711) , Qianjiang Water Resources Development Co; Ltd(600283) , Poten Environment Group Co.Ltd(603603) decreased by 15.35%, 12.51% and 10.67% respectively, showing poor performance.
After the year, lithium resources rose for three consecutive weeks, and the assessed price of concentrate remained at a high price of US $4500
According to SMM data, as of Friday (February 25), the quotation of battery grade lithium carbonate was 464000 yuan / ton, up 26000 yuan / ton month on month; The quotation of industrial grade lithium carbonate was 451000 yuan / ton, up 26000 yuan / ton month on month; The quotation of battery grade lithium hydroxide was 415500 yuan / ton, up 43000 yuan / ton month on month; The price of industrial grade lithium hydroxide was 410000 yuan / ton, up 43000 yuan / ton month on month. Lithium salt prices continued to rise this week. In February, the output of China’s lithium salt enterprises was still affected by maintenance and resource shortage. Due to the continuous shortage of spot, the rise of lithium salt price in China has also boosted other markets outside China. In addition, as China’s demand for lithium is mainly met through Chinese production, the conflict between Russia and Ukraine is not expected to have any significant impact on the price of lithium salt in China. On February 17, fastmarkets evaluated the price of lithium concentrate (SC6) at $3750 / ton, up $500 / ton from two weeks ago. On February 25, Platts energy information estimated that the price of lithium concentrate (SC6) was US $4500 / ton (FOB, Australia), unchanged from last week. According to the data disclosed in the quarterly report of Australian mining enterprises, the long-term association was generally between us $26 Jinzai Food Group Co.Ltd(003000) / ton in the first quarter. 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.
Improve the coal price formation mechanism to support the rapid development of renewable energy.
Recently, the national development and Reform Commission issued the notice on further improving the coal market price formation mechanism (hereinafter referred to as the notice). The notice points out: 1) promoting the establishment of a long-term and stable relationship between supply and demand is conducive to ensuring the security of energy supply. 2) Gradually forming a stable market expectation and price level is conducive to promoting the common healthy and sustainable development of upstream and downstream industries such as coal and electric power. 3) Gradually improve the coal price formation mechanism and give full play to the role of effective market and promising government. 4) Further straightening out the price relationship is conducive to the further promotion of power market-oriented reform. Improve the coal market price formation mechanism, which is conducive to stabilizing expectations, timely release the clear market positioning signal of coal price, promote the multi signing, actual signing and implementation of medium and long-term contracts for power coal, and prevent coal speculation and price ups and downs; It is conducive to stable supply, promote the stable production of coal enterprises as soon as possible, release output, ensure the stable and reliable supply of power coal, and give full play to the bottom guarantee role of coal and electricity in the new power system. There is a close relationship between coal and power generation. Especially in the process of realizing the strategic goal of carbon peak and carbon neutralization, coal will continue to play the role of ballast for China’s safe and stable energy supply and stabilizer for the rapid development of renewable energy. Improving the coal market price formation mechanism, reasonably controlling the cost of coal-fired power enterprises and stabilizing the profits of enterprises will also help coal-fired power enterprises transform to new energy power generation, promote the healthy and orderly growth of new energy power generation industry and promote the green and low-carbon transformation of China’s energy.
The trading atmosphere of thermal coal market has improved, and the future market will still maintain a stable operation.
The trading atmosphere of China Shipbuilding Industry Group Power Co.Ltd(600482) coal market improved this week. In terms of producing areas, most coal mines in the main producing areas resumed normal production this week, China’s coal output continued to increase, the daily coal output in some areas has returned to the level before the Spring Festival, and the mainstream coal mines continue to actively fulfill the long-term cooperation and guarantee the supply of resources, with the balance for land sales. On the demand side, the replenishment of main power plants is mainly based on long-term cooperation, and the procurement of chemical and other non power users is mainly based on demand. In addition, supported by the cost of oil and gas, the automobile transportation fee of some routes increased; At the same time, some areas are affected by public health events, and the difficulty of automobile shunting has increased. In terms of downstream demand, the inquiry demand of some users in China has been released this week, but the actual procurement is mainly rigid demand. With the resumption of work and production of industrial enterprises, the industrial power consumption has increased, and the daily consumption of power plants has increased, but it is just necessary to replenish the warehouse, mainly to fulfill the long-term cooperation; Chemical and other non electric power users have an appropriate amount of demand for replenishment, and procurement continues to be carried out on demand.
The average price of LNG in China continued to rise, and the overall high level of natural gas in the United States fluctuated.
The average price of LNG in China continues to rise. In terms of supply, the output of China’s LNG plants this week decreased month on month compared with last week, and the liquid level in the liquid plant is still low. Recently, the number of LNG ships arriving at the port has increased, and the shipment volume of tank batch at the terminal has increased; In terms of demand, the recent demand shows a decreasing trend. In the early stage, the downstream replenishment demand is good, coupled with the rising cost, and the market is relatively strong. However, with the gradual recovery of the temperature in the north, the downstream urban fuel replenishment demand has decreased significantly, the market has increased heavy vehicles, and industrial users are still in the stage of resumption of production and work, which is still difficult to significantly boost the downstream demand. Based on the overall supply and demand situation, the LNG supply may rise steadily next week, and the demand may decrease in a narrow range. It is expected that the subsequent LNG price may be easy to fall but difficult to rise. In this cycle, the overall high-level and volatile operation of the U.S. natural gas market. In the cycle, the Meteorological Agency predicted that the temperature in February and early March was lower than that in the same period of previous years, which increased the demand for natural gas power generation and heating to a certain extent. In addition, due to the recent tense geographical factors in Europe, the market believed that the United States would continue to strengthen its natural gas exports to Europe, which would give a certain boost to the U.S. natural gas market. In the short term, due to the influence of geographical factors such as Russia and Ukraine, the natural gas inventory level in Europe and other places is still low, which will also continue to stimulate the natural gas export of the United States. Overall, the US natural gas market is expected to continue a strong trend in the short term.
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 mining and beneficiation project of Lijiagou spodumene mine under construction. In the future, [ Sichuan New Energy Power Company Limited(000155) ], which will work with Dongchuan energy investment to integrate and develop lithium resources in Ganzi and ABA, will benefit from [ Tianqi Lithium Corporation(002466) ], which has been increasing production in the next five years and can achieve large-scale production through OEM, [ Youngy Co.Ltd(002192) ] of yuanyangba 2.5 million T / a lithium ore concentration project is being promoted, [ Yongxing Special Materials Technology Co.Ltd(002756) ] of Baishi Huashan mining and beneficiation expansion is expected to be completed in mid-2022, [ Qinghai Salt Lake Industry Co.Ltd(000792) ] of which both potash fertilizer and lithium salt have good performance 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) ], [ Cecep Wind-Power Corporation(601016) ], and the Hong Kong stock targets benefiting from the new energy operation include [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.
