Core view
1. Driven by both demand and cost, the price of lithium iron phosphate continues to rise. Since 2021, the price of lithium iron phosphate has continued to rise. In 2021, the price of lithium iron phosphate increased from 37000 yuan / ton at the beginning of the year to 107000 yuan / ton at the end of the year, an increase of 189.19%. Since 2022, the price of lithium iron phosphate has continued to rise. As of March 4, 2022, the price is 163000 yuan / ton, an increase of 52.3% over the beginning of the year. There are two main reasons for the increase in the price of lithium phosphate and iron phosphate: 1) the increase in the price of lithium phosphate. Downstream applications of lithium iron phosphate include power batteries and energy storage equipment. In terms of power batteries, lithium iron phosphate, due to its advantages of higher safety and lower cost, achieved the reverse overload of ternary materials for the first time in November 2021. In 2021, the cumulative loading volume reached 79837 MWh and 5490.1 MWh for ultra ternary materials. In terms of energy storage equipment, according to cnesa data, by the end of 2020, the cumulative installed capacity of electrochemical energy storage in China had increased by 91.2% year-on-year. Among them, lithium-ion batteries account for 88.8%, ranking first in all kinds of electrochemical energy storage technologies. 2) The price of raw materials supports the high-level operation of lithium iron phosphate. The raw materials of lithium iron phosphate are mainly lithium carbonate and iron phosphate, and the cost is mainly dominated by lithium carbonate. Since the second half of 2021, the price of lithium carbonate has risen sharply, from 87500 yuan / ton in July 2021 to 507400 yuan / ton, an increase of 479.89%, and the momentum has not slowed down. In addition, as of March 4, 2022, the inventory of lithium iron phosphate was 130 tons, 21% of the same period in 2019. Based on the above, in the short term, supported by the cost side and low inventory, the price of lithium iron phosphate may remain high. In the long run, the demand for downstream power batteries and energy storage equipment is growing rapidly, and the lithium iron phosphate industry is expected to continue to prosper.
2. As of March 4, 2022, the price index of China’s chemical products reported 5726 points, up 3.2% on a weekly basis. The market price of C1 methanol rose by 9.7% and acetic acid fell by 10.4%. In terms of methanol, the main reason for the price rise is that on the one hand, driven by the rise of international prices, on the other hand, the operating rate of traditional downstream industries continues to rise; In terms of acetic acid, at present, the operating rate of acetic acid industry is high, the market supply is sufficient, and the inventory pressure is large. At the same time, the operation of acetate is always low, and the downstream demand is low.
3. Over the past week, international crude oil prices have risen sharply. As of March 4, the main futures prices of Brent and WTI crude oil rose to US $118.1 and US $115.7 per barrel respectively, with weekly increases of 20.6% and 26.3% respectively, both reaching a new high after 2014. The sharp rise in crude oil was mainly due to increased concerns about the obstruction of Russian oil exports. Last week, western countries upgraded their sanctions against Russia, some Russian banks will be delisted by swift, and the geopolitical conflict between Russia and Ukraine further intensified.
4. Market review. Among the 27 Shenwan level III sub industries in the chemical industry, 10 sectors rose or remained flat last week, and 17 sectors fell. Among them, other plastic products increased the most, with an increase of 6.4%; The pesticide sector had the largest decline, with a decline of 7.1%. The top three weekly increases were Guangxi Hechi Chemical Co.Ltd(000953) , North Chemical Industries Co.Ltd(002246) , Anhui Annada Titanium Industry Co.Ltd(002136) , with weekly increases of 44.8%, 20.7% and 16.8% respectively; The top three weekly declines were Hunan Zhongke Electric Co.Ltd(300035) , Shenzhen Dynanonic Co.Ltd(300769) , Shanghai Kinlita Chemical Co.Ltd(300225) , with weekly declines of 14.9%, 14.5% and 14.3% respectively.
Investment advice
Relevant targets under the prosperity of lithium iron phosphate market may benefit, such as Hubei Yihua Chemical Industry Co.Ltd(000422) , Shenzhen Dynanonic Co.Ltd(300769) , Hunan Yuneng, etc.
Risk tips
Upgrading of safety and environmental protection policies, abnormal fluctuations in the price of lithium iron phosphate, substitution of lithium iron phosphate by new technologies, etc.
