The 154 environmental protection and public utility stocks we tracked outperformed the Shanghai index by 0.99 percentage points this week. Year to date outperformed the Shanghai Composite Index by 24.80 percentage points. This week, Ningbo Energy Group Co.Ltd(600982) , Jiangsu Jiangnan Water Co.Ltd(601199) , Lingda Group Co.Ltd(300125) increased by 31.90%, 12.62% and 10.07% respectively, showing good performance Tus Environmental Science And Technology Development Co.Ltd(000826) , Fujian Funeng Co.Ltd(600483) , Hangzhou Zhongtai Cryogenic Technology Corporation(300435) decreased by 18.72%, 7.18% and 5.27% respectively, showing poor performance.
There is still a gap between supply and demand of lithium resources, and the assessed price of lithium concentrate has risen to US $5000 / ton.
According to SMM data, as of Friday (March 4), the quotation of battery grade lithium carbonate was 496000 yuan / ton, up 31000 yuan / ton month on month; The quotation of industrial grade lithium carbonate was 483000 yuan / ton, up 32000 yuan / ton month on month; The quotation of battery grade lithium hydroxide was 453500 yuan / ton, up 38000 yuan / ton month on month; The quotation of industrial grade lithium hydroxide was 441000 yuan / ton, up 31000 yuan / ton month on month. Lithium salt prices continued to rise this week. Some manufacturers still had maintenance during February. The superimposed production cycle was short and the supply was stable. On the demand side, some manufacturers still stock goods. The demand for iron lithium and ternary power at the downstream has increased slightly. Under the background of the gap between supply and demand, the price has increased rapidly. On March 4, Platts energy information estimated that the price of lithium concentrate (SC6) was US $5000 / ton (FOB, Australia), an increase of US $500 / ton compared with 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.
We will continue to improve the ecological environment and promote carbon peaking and carbon neutralization in an orderly manner.
On March 5, the 2022 government work report was released. In terms of ecological and environmental protection, the government work report pointed out that the task of 2022 should continue to improve the ecological environment and promote green and low-carbon development. We will strengthen pollution control, ecological protection and restoration, properly handle the relationship between development and emission reduction, and promote the harmonious coexistence between man and nature. In terms of traditional energy, based on resource endowment, we should adhere to the principle of building first and then breaking, overall planning, and orderly reduction and substitution. Strengthen the clean and efficient utilization of coal, and promote the transformation of energy conservation and carbon reduction, flexibility and heating of coal and electricity. In terms of new energy, we will promote the planning and construction of large-scale wind and solar power bases and their supporting regulatory power sources, and improve the consumption capacity of the power grid for renewable energy power generation. In terms of industrial energy conservation, we will promote energy conservation and carbon reduction in iron and steel, nonferrous metals, petrochemical, chemical and building materials industries, and resolutely curb the blind development of high energy consumption, high emission and low-level projects. In terms of result assessment, we will promote the transformation from “dual control” of energy consumption to “dual control” of total carbon emission and intensity. The target of energy consumption intensity will be comprehensively assessed within the 14th Five Year Plan period (the 14th five year plan stipulates that the energy consumption per unit of GDP will be reduced by 13.5% during the 14th Five Year Plan period), with appropriate flexibility. New renewable energy and raw material energy will not be included in the total energy consumption control. In 2021, the energy consumption per unit of GDP decreased by 2.7% over the previous year, close to the expected target of reducing by about 3%. 2022 is the first year in recent years that there is no specific target value for the reduction of energy consumption per unit of GDP except 2020 affected by the epidemic.
The price of thermal coal maintained a rising momentum, and the release of future demand supported the high operation of coal prices.
The trading atmosphere of China Shipbuilding Industry Group Power Co.Ltd(600482) coal market is improving this week. In terms of producing areas, most coal mines in China’s main producing areas organized production according to the approved production capacity this week, China’s coal output remained at a high level, and large state-owned mines mainly fulfilled long-term cooperation and guaranteed supply of resources; The land sales of local coal mines are basically normal, and some coal mines give priority to the needs of long-term customers. On the whole, the negotiation atmosphere of the power coal market in the main production area this week is good, the coal mine shipment is smooth, and there is no inventory accumulation. In terms of downstream demand, the procurement demand of downstream users in China continued to release this week, and the actual transportation was mainly rigid demand. Recently, industrial power consumption has gradually picked up, the daily consumption of power plants has increased, and the replenishment of main power plants is mainly based on the realization of long-term cooperation; The coal purchase demand of small power plants, chemical industry, steel and other non power users continues to release, but the actual purchase is more cautious, and the transportation is mainly rigid demand.
The average price of LNG in China fell after rising, and the overall natural gas in the United States was strong and volatile.
In terms of supply, China’s LNG output increased this week, another round of bidding volume of Northwest feed gas increased this week, the tight supply of liquid plant resources tended to improve, and the shipment of tank batch at the terminal decreased slightly; In terms of demand, although the price performance was strong in the early stage of this week, the terminal demand continued to decline, which was more supported by the low liquid level of the liquid plant. With the continuous downturn of the demand for replenishment by urban fuel users, the slow resumption of production and work by industrial users, and the demand for urban fuel and point supply was not ideal, so the average price of LNG in China fell after rising this week. Based on the overall supply and demand situation, the LNG supply may increase next week, but the demand may decrease or not increase. Due to the reduction of seasonal replenishment support, LNG demand has returned to a weak state. However, due to the smooth shipment in the early stage, the liquid level of most LNG plants is low, and the cost of feed gas in Northwest and other places is still high, so the decline of LNG price is expected to be limited. The overall US natural gas market was strong and volatile in this cycle. During the cycle, the problems of Russia and Ukraine continue to exist, and the problem of natural gas supply and demand in Europe is still not well solved. Insiders in the market believe that this will continue to increase the export of us natural gas to Europe, which will greatly support the US natural gas market. However, the overall temperature of the United States has warmed during the cycle, which has played a certain role in restraining the rise of the market.
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.
