Core view
1. International auto companies are overweight new energy vehicles, and the price of lithium carbonate is expected to remain high. Last week, Toyota proposed to launch a total of 30 pure electric vehicles by 2030, and one-third of new vehicles sold worldwide will be pure electric vehicles. The substantial growth of new energy vehicles has driven the growth of downstream power battery demand. According to the data of China automotive power battery industry innovation alliance, from January to November 2021, China Shipbuilding Industry Group Power Co.Ltd(600482) battery output accumulated 188.1gwh, a year-on-year increase of 175.5%. In addition to new energy vehicles, the demand for batteries from electrochemical energy storage has also driven the upward boom of lithium carbonate. According to cnesa data, by the end of June this year, the cumulative installed capacity of new energy storage had increased by 95% year-on-year.
The growth of downstream demand has brought upward prosperity in the upstream new energy metal field. In power battery, the production of cathode material and electrolyte is inseparable from the raw material lithium carbonate. In terms of price, the price of lithium carbonate, the raw material of battery, rose sharply in 2021. As of December 17, the average market price of battery grade lithium carbonate in China was 239000 yuan / ton, an increase of 331.74% compared with the beginning of the year. In terms of inventory, the inventory of Chinese manufacturers is at a low level during the year and is still declining. Last week, the weekly inventory balance of the factory was 6143 tons, a year-on-year decrease of 1.19%, and a decrease of 82.6% compared with the peak period of this year’s inventory.
The decline of inventory reflects the strong market demand and relatively tight supply of lithium carbonate. In the long run, the market demand is strong, and the price of lithium carbonate is expected to remain high in the future; In the short term, the inventory is low, which reflects the tight balance between supply and demand and supports the high price of lithium carbonate.
2. In the past week, most non-ferrous metals rose. In terms of new energy metals, battery grade lithium carbonate rose by 8.2%, cobalt trioxide and cobalt sulfate rose by 7.3% and 4.2% respectively. In terms of precious metals, Comex gold and silver rose 1.5% and 1.4% respectively. In terms of base metals, LME aluminum rose 2.6%, LME lead rose 1.9% and LME zinc rose 2.9%. In terms of rare earth metals, rubidium oxide rose 4.6%. Among them, cobalt trioxide rose 7.3% and metal tin China futures fell 3.0%. In terms of Co3O4, the reason for the price rise is that on the one hand, the rise of new energy metals is maintained and the prosperity of ternary cathode materials is rising; On the other hand, affected by the epidemic in South Africa, the sea transportation of overseas imported cobalt salt production raw materials was delayed. In terms of metal tin, the price of tin China futures fell 3.0%. Tin futures prices fell mainly due to the pressure on metal prices caused by the rise of the US dollar, and the increase in inventories and the release of hawkish signals from the Federal Reserve.
3. The Federal Reserve accelerated the reduction of bond purchases, and gold prices rebounded. The Federal Reserve announced that it would increase the monthly asset purchase scale to US $30 billion and advance the end time point to March 2022. After the interest rate discussion, the US dollar fell and gold and silver rebounded. On Friday, the settlement price of Comex gold futures was US $1807.20/ounce, up more than 1% year-on-year. The settlement price of China National Gold Group Gold Jewellery Co.Ltd(600916) futures was 370.46 yuan / g, with a weekly increase of 0.7%. Silver also continued to rebound. On Friday, the settlement price of Comex silver futures was US $22.48/oz, up 1.4% this week. Overall, the gold and silver market is still strong, and the upward rebound trend is expected to remain.
4. Market review. Last week, four of the 11 Shenwan nonferrous metals tertiary industries rose or remained flat, and seven fell. Among them, the gold plate increased the most, at 1.2%; The largest decline was in non-metallic materials, at 6.2%. In terms of individual stocks, the top three gainers were Guangdong Huafeng New Energy Technology Co.Ltd(002806) , Sanxiang Advanced Materials Co.Ltd(603663) , Sinosteel New Materials Co.Ltd(002057) , with weekly gains of 12.67%, 12.05% and 10.82% respectively; The top three declines were Sinomine Resource Group Co.Ltd(002738) , Guangdong Jiayuan Technology Co.Ltd(688388) , Ningxia Orient Tantalum Industry Co.Ltd(000962) , with weekly declines of 14.33%, 12.95% and 12.86% respectively.
Investment advice
With the growth of downstream demand, the price of lithium carbonate is expected to remain high. Pay attention to relevant upstream targets of new energy batteries, such as Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) , etc.
Risk statement
The international covid-19 epidemic has been repeated, the exchange rate has fluctuated sharply, and the energy and environmental protection policies have changed.
(East Asia Qianhai securities)
