[Key words this week]: Pilbara lowered the production guidelines for fiscal year 22; Sqm expects to further expand production; Zhongkehaina plans to invest 1GWh sodium ion battery, which is expected to be put into operation in 22 years; The price of battery grade lithium carbonate exceeded 250000 yuan / ton; China rare earth group was officially listed and landed, and the industry pattern was reshaped; China lowered 1-year LPR.
Market review: 1) in terms of small metals, the sales volume of new energy vehicles in China reached a new high in October, and the penetration rate of new energy passenger vehicles was close to 20%. The prosperity of the industry continued to rise. The prosperity trend of cobalt, lithium and rare earth in the upstream of new energy vehicles was clear and continued to be optimistic: ① the inventory of lithium ore in the industry was low, the reluctance to sell in the upstream was obvious, the price accelerated, and the lithium concentrate was flat month on month this week, Battery grade lithium carbonate increased by 10.0% month on month, and the price of electric carbon has exceeded 250000; ② With the outbreak of the epidemic in South Africa, cobalt prices accelerated upward, and MB standard cobalt rose 1.3% month on month this week; ③ In terms of rare earth, the supply of raw materials was tight. The Ministry of industry and information technology disclosed the motor energy efficiency improvement plan and raised the expectation of rare earth demand. The quotation of praseodymium and neodymium oxide fell by 1.5% this week. 2) The inflation index of the United States rose, and the impact of the European energy crisis on the rise of electricity prices continued to ferment: ① base metals, LME, aluminum and copper increased by 4.2% and 2.0% respectively; ② The real yield of ten-year US bonds increased from -0.97% → – 0.97%, and Comex gold closed at US $1811.7/oz, up 0.38% month on month.
Macro “three factors” summary: China’s steady growth direction is clear, and LPR presents “asymmetric interest rate reduction”; The inflation index of the United States rose in November and taper accelerated; Specifically: 1) in China, the central economic work conference stressed that “stability should take the lead and seek progress while stability”, and LPR showed “asymmetric interest rate reduction”. On December 20, the one-year LPR fell again after 20 months, and the one-year LPR reported 3.80% in December, down 5 BP compared with the previous period; Varieties with a maturity of more than 5 years were flat at 4.65%; 2) In the United States, the core PCE increased year-on-year in November, The United States disclosed this week that the final value of GDP in the third quarter was 2.3% (the previous value was 6.7%); the quarterly adjustment of personal consumption expenditure in November was US $16423.2 billion (the previous value was US $16318.5 billion); the core PCE price index in November was 4.68% (the previous value was 4.19%) year-on-year; in November, 53000 new houses were sold (the previous value was 51000), 12.39% month on month (previous value – 8.44%); 205000 initial claims for unemployment benefits were disclosed this week, unchanged month on month. 3) the PMI index in Europe is expected to decline in December, and the epidemic is heating up. In December, the PMI of manufacturing industry in the euro area is expected to be 58.0 (previous value 58.4%), and the PMI of service industry is expected to be 53.3 (the previous value was 55.9); 187785.2 cases of covid-19 were confirmed daily in Britain, Germany and France this week, an increase of 18441.2 cases compared with last week, and the epidemic is heating up. 4) the rhythms of various economies are different, but the decline direction of the global overall prosperity remains unchanged. In November, the global PMI was 54.8, up 0.30.
Base metals: the energy problem in Europe continued to ferment, pushing up the price of base metals. During the week, the impact of rising electricity prices caused by the European energy crisis continued to ferment, and the price of copper followed the rise of aluminum and zinc, while the rapid decline of major assets represented by oil prices dragged down the speed of rising copper prices to some extent. In addition, although the market still has doubts about Omicron, concerns have slowed down and market risk sentiment has improved. In China, the central bank cut the one-year LPR to 3.8%, and China’s monetary policy has obviously shifted to easing under the continuous reduction of reserve requirements and interest rates. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by 2.0%, 4.2%, – 1.6%, 4.1%, 0.4% and 2.2% respectively this week, and the price rose as a whole.
1. For electrolytic copper, China copper smelter and Freeport finally finalized the long-term benchmark of copper concentrate processing fee in 2022. Antofagasta has confirmed to follow this processing fee within a week, and the buyer and the seller finally reached an agreement on the loose trend of copper concentrate Market in 2022 compared with that in 2021; On the supply side, the Peruvian community agreed to temporarily lift the blockade on the Las bambas copper mine. The market’s expectation of China’s accumulated reserves under the weak consumption of downstream from January to February is basically determined. The social inventory of electrolytic copper on Wednesday was 78600 tons, and the weekly inventory was 3600 tons.
2. For electrolytic aluminum, at the supply side, China’s electrolytic aluminum output continues to run at a low level; On the demand side, the start of construction this week is relatively stable, but the concern of environmental protection and production restriction of the Winter Olympic Games still exists. This week, the total inventory of aluminum ingots in China’s eight places was 864000 tons, and the weekly inventory was 46000 tons.
3. For zinc ingots, overseas fundamentals and European electricity price problems are further exacerbated; In terms of zinc in Shanghai, the consumption showed a certain weakness after the sharp rise of zinc price. Due to environmental protection problems in Tangshan, most small and medium-sized zinc plating plants stopped production, while large enterprises are expected to reduce production by more than 50% in January. The rest of North China enterprises are expected to be affected by the production restriction brought by the Winter Olympic Games in January. The total zinc ingot inventory in seven places this week was 124200 tons, which was flat on a weekly basis.
Upstream lithium battery raw materials: the prosperity of the global new energy industry continues to rise, the electric vehicle market in China, the United States and Europe resonates, and the upward trend of upstream raw material prices continues to strengthen:
1. The demand boom continued to rise and the price transmission was smooth: 1) in November, China’s production and sales of new energy vehicles completed 434000 and 427000 respectively, with a year-on-year increase of 1.3 and 1.2 times respectively. China Automobile Association expects that the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles will reach 5 million in 22 years, with a year-on-year increase of 47%; 2) The US Shanxi Guoxin Energy Corporation Limited(600617) policy was further strengthened. The house of Representatives passed President Biden’s $1.75 trillion social expenditure and climate bill, of which $1.25 trillion was used for electric vehicle tax credit, which will be considered by the Senate in the next step; 3) According to SMM, the price of China’s battery industry has basically increased uniformly recently. Recently Byd Company Limited(002594) , GuoXuan, Penghui and Funeng have successively issued price increase letters. The production scheduling of new energy vehicle industry chain continued to increase.
2. The end of the year is approaching, and the price of lithium carbonate is accelerating upward again. This week, the price of pool grade lithium carbonate increased by 10.0% compared with last week, the price exceeded 250000 yuan / ton, the quotation of battery grade lithium hydroxide increased by 4.4% compared with last week, and the quotation of spodumene was flat compared with last week. 1) There is a shortage of hard lithium concentrate, The third lithium concentrate auction of Pilbara was finally concluded at the price of USD 2350 / ton (FOB), which was converted into lithium concentrate (CIF, 6.0% grade) is about US $2644 / ton, pushing up the production cost of lithium carbonate to about 175300 yuan / ton LCE. 2) on the supply side, some enterprises in Qinghai stop signing orders this week and are expected to start shipping in January, with obvious bullish sentiment in the upstream; 3) on the demand side, the price difference between lithium carbonate and lithium hydroxide increases, the demand for causticization increases, and lithium hydroxide is expected to rise; 4) lithium salt storage The inventory of lithium carbonate decreased by 4.85% month on month from 6143 to 5863 tons; Lithium hydroxide inventory increased by 19.30% month on month from 315 to 408 tons. 5) On the overseas resource side, the Chilean presidential election was held, the left-wing party boric was elected, and the policy uncertainty increased. Sqm proposed a new production expansion plan, which is expected to reach 270000 tons in 24 years, and Pilbara lowered the production guidelines for fiscal year 22.
3. With the tightening of raw materials, cobalt prices may rise further. MB cobalt (standard grade), MB cobalt (alloy grade) quotations rose by 1.3% and 1.3% month on month, respectively, and the tax price of China’s metal cobalt has reached 536000 yuan / ton; China’s metal cobalt, cobalt sulfate and cobalt trioxide rose by 0.7%, 1.5% and 3.5% respectively. 1) on the supply side, China’s total import of cobalt raw materials in November 2021 was 8100 gold tons, up 50% month on month and down 10% year-on-year. According to the feedback of the industrial chain, the uncertainty of shipping schedule will be at least 50% Continue to the first quarter of 2022; 2) A new variant strain of Omicron was found in South Africa, spreading faster than before, Congo (gold) cobalt raw materials are mainly transported through Durban port, South Africa, and the shortage of raw materials is further exacerbated; 3) ternary material enterprises have begun to resume work, lithium cobaltate enterprises have increased their willingness to purchase, and the demand for aerospace and military industry has warmed up, the demand for overseas stock replenishment has increased, the trading is booming, and the overseas cobalt price has risen. 4) the inventory of cobalt intermediate products of smelting enterprises has remained low, and the epidemic situation in Zhejiang Province has been repeated, According to SMM, the output of cobalt sulfate is about 700 tons, accounting for about 12% of the total supply of the industry, and cobalt chloride is 600 tons, accounting for 13.6% of the total supply of the industry in the current month.
4. Reshaping the pattern of rare earth permanent magnet industry. 1) In the spot market, the quotation of praseodymium and neodymium oxide in China fell by 1.5%. In China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) December, the listing price of praseodymium and neodymium oxide was 816900 yuan / ton, up 7.12% month on month. The spot circulation in the market was limited, and large manufacturers were willing to support the price. 2) On the demand side, 22125 tons, an increase of 8.22% month on month; 3) In terms of inventory, the inventory of praseodymium and neodymium oxide increased by 27 tons to 2815 tons compared with last week, an increase of 0.97% month on month. 4) Overseas mines and Myanmar mines resumed import at the end of November, with a total import of 1220 tons of REO in November, of which mixed rare earth carbonate mines were not imported; U.S. mineral imports reached 23307 tons (about 7984 tons of REO), a significant increase of 520% month on month, mainly due to the impact of customs clearance cycle. The import data from January to November was basically the same as that of the same period last year. 5) in terms of policy, China Rare Earth group was officially listed in Ganzhou, reshaping the industry pattern.
5. Nickel: the supply of raw materials is tight and the price remains strong. 1) SHFE nickel closed at 148300 yuan / ton, up 2.62% month on month. 2) On the supply side, the Indonesian President reiterated his plan to stop the export of all bulk commodity raw materials. Previously, the Indonesian government planned to restrict the construction and export of FeNi and NPI smelters and encourage the construction of nickel sulfate, stainless steel and other smelters locally; 3) On the demand side, according to the production plan of each steel plant in December, the total output of stainless steel crude steel of 30 steel plants was about 2.71 million tons, an increase of 95000 tons compared with that in November.
6. Lithium positive and negative current collectors: copper foil and aluminum foil industries maintain a high business cycle. 1) Aluminum foil: zhongkehaina has invested in 1GWh sodium ion battery production line, which is expected to be put into operation in 22 years. Compared with lithium-ion battery, its positive and negative electrodes need aluminum foil. Aluminum foil has entered a high business cycle, with limited new expansion of production, and the processing fee is easy to rise but difficult to fall. 2) Copper foil: subject to the supply bottleneck of core production equipment such as cathode roller, the new effective capacity of lithium copper foil is limited, and the supply and demand structure is mismatched. Under the general trend of lightness and thinness, the processing fee of extremely thin copper foil will generally rise by 5000-10000 yuan in 2021, which is easy to rise but difficult to fall.
7. Antimony: the shortage of raw materials remains unchanged. The price of antimony concentrate in China was 57000 yuan / ton, up 0.88% from last week; The price of antimony ingot was 73500 yuan / ton, up 0.68% from last week. At present, it is difficult for most smelters to replenish raw materials, and the price has stopped falling and stabilized.
Investment suggestion: maintain the “overweight” rating of the industry
1. For base metals, China’s economic work in 2022 will be “stable”, which will provide some support for the price of base metals. However, from the global dimension, 1) changes in the structure before, during and after the outbreak of overseas economic demand, and 2) the global liquidity taper trend remains unchanged, and the downward trend of base metals may not have been fundamentally changed.
2. For the upstream raw materials of new energy, such as lithium cobalt rare earth copper foil, aluminum foil and magnetic materials, the short-term prosperity is still strong, the general direction of the medium and long-term three-year prosperity upward cycle will not change, and the industrial prosperity is the most clear! Firmly watch!
Core target: 1) new energy vehicle industry chain: Ganfeng Lithium Co.Ltd(002460) , Tianqi Lithium Corporation(002466) , Sinomine Resource Group Co.Ltd(002738) , Yongxing Special Materials Technology Co.Ltd(002756) , Sichuan Yahua Industrial Group Co.Ltd(002497) , Zhejiang Huayou Cobalt Co.Ltd(603799) , China Molybdenum Co.Ltd(603993) , China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Shenghe Resources Holding Co.Ltd(600392) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , Jl Mag Rare-Earth Co.Ltd(300748) , Earth-Panda Advanced Magnetic Material Co.Ltd(688077) , Jiangsu Dingsheng New Material Joint-Stock Co.Ltd(603876) , Nuode Investment Co.Ltd(600110) , Guangdong Jiayuan Technology Co.Ltd(688388) etc. 2) Base metal: Yunnan Aluminium Co.Ltd(000807) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Tianshan Aluminum Group Co.Ltd(002532) , Sunstone Development Co.Ltd(603612) , Zijin Mining Group Company Limited(601899) , Tongling Nonferrous Metals Group Co.Ltd(000630) etc. 3) Precious metals: Shandong Gold Mining Co.Ltd(600547) , Shengda Resources Co.Ltd(000603) etc.
Risk tips: macroeconomic fluctuation, import and environmental protection policy risk, gold price fluctuation risk, new energy vehicle sales less than expected risk, premise assumption of supply and demand calculation less than expected risk, etc.
