[Key words this week]: Tesla raises prices again; The implementation of Shanxi Guoxin Energy Corporation Limited(600617) automobile subsidy policy; Lithium carbonate preparation accelerates the price rise; The overseas epidemic is heating up rapidly.
Market review: 1) in terms of small metals, the sales volume of new energy vehicles in China reached a new high in October, the penetration rate of new energy passenger vehicles was close to 20%, the prosperity of the industry continued to rise, and 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 rose 4.9% month on month this week, Battery grade lithium carbonate increased by 10.6% 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 metal cobalt rose by 1.2% 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 demand expectation of rare earth. The quotation of praseodymium and neodymium oxide rose by 1.3% 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 – 0.2% and 1.6% respectively; ② The real yield of 10-year US bonds increased from -0.97% → – 1.06%, and Comex gold closed at US $1828.6/oz, up 0.93% month on month.
Macro “three factors” summary: the policy direction of China’s steady growth is clear; PMI of Markit manufacturing industry in the United States fell in December; The overseas epidemic has accelerated; Specifically: 1) in China, the central economic work conference emphasized “stability first and seek progress while maintaining stability”, and LPR showed “asymmetric interest rate reduction”. In December, the national manufacturing PMI rebounded slightly. In December, China’s official manufacturing PMI index was 50.3 (the former value was 50.1) and the non manufacturing PMI index was 52.7 (the former value was 52.3); By item, the production PMI index is 51.4 (former value 52.0), the new order PMI index is 49.7 (former value 49.4), the finished product inventory PMI index is 48.5 (former value 47.9), the ex factory price PMI index is 45.5 (former value 48.9), and the employee PMI index is 49.1 (former value 48.9); 2) In the United States, the PMI of Markit manufacturing industry fell in December. The PMI of Markit manufacturing industry in the United States in December was adjusted to 57.8 (previous value 58.3), and the PMI of business activities of Markit service industry was adjusted to 57.5 (previous value 58.0); In the third quarter, the annualized rate of the final value of GDP was 2.3% (the previous value was 6.7%); The contracted sales index of existing houses in November was 122.40 (the previous value was 125.20); The number of initial claims for unemployment benefits disclosed this week was 198000, down 0.8 month on month. 3) The PMI index of Europe in December is expected to decline and the epidemic situation is heating up. The total assets of the European Central Bank this week were 8.512 billion yuan (the previous value was 85.11); In December, the PMI of manufacturing industry in the euro area is expected to be 58.0 (the former value is 58.4), and the PMI of service industry is expected to be 53.3 (the former value is 55.9); This week, the United Kingdom, Germany and France added 371172.4 cases of covid-19 diagnosis on a daily basis, 160083.8 cases more than last week, and the epidemic is heating up. 4) The rhythm of each economy is different, but the decline direction of the global overall prosperity remains the same. In November, the global pmi54 8. Annular rise 0.30.
Base metals: driven by both supply and demand, it recorded the largest annual increase since 2009. During the week, the trading was light during Christmas and New Year holidays; China’s monetary policy has made great efforts, with obvious marginal improvement, supporting copper prices under the effect of the end of the year. In 2021, driven by tight supply and increased demand, industrial metal prices recorded the largest annual increase since 2009. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose and fell by 1.6%, – 0.2%, 0.8%, 0.6%, – 0.4% and 3.1% respectively this week, and the prices rose and fell each other; The annual increases and decreases were 25.8%, 42.0%, 15.2%, 28.6%, 91.6% and 25.0% respectively. Aluminum and tin increased the most.
1. For electrolytic copper, the market is basically at the end of the long order negotiation at the end of the year. The long order trial report of electrolytic copper of major smelters in 2022 is 150-200 yuan / ton, and the long order next year is basically 50-70 yuan / ton higher than this year, which also confirms the market’s confidence in the sustainability of low inventory. On Wednesday, the social inventory of electrolytic copper was 81700 tons, and the weekly inventory increased by 3100 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-up this week is relatively stable, while the northern region, especially Henan, is still worried about the possible production reduction in the future Winter Olympic Games and still pays close attention to the production and delivery orders. Affected by the decline in power coal prices this week, the profit of single ton electrolytic aluminum was 2541 yuan, up 39.81% month on month. This week, China’s aluminum ingot inventory in eight places totaled 799000 tons, and 65000 tons went to the warehouse every week.
3. For zinc ingots, in terms of Shanghai zinc, the consumer end has further weakened recently, and some enterprises will stop production in January; On the other hand, the epidemic situation in Shaanxi hindered the transportation of zinc ingots, and the warehousing volume of zinc ingots in Shanghai continued to be low. The total zinc ingot inventory in seven places this week was 120100 tons, down 4100 tons 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 produced and sold 434000 and 427000 new energy vehicles respectively, with a year-on-year increase of 1.3 and 1.2 times respectively. The Shanxi Guoxin Energy Corporation Limited(600617) vehicle subsidy policy was implemented. In 2022, the subsidy for non-public new energy vehicles decreased by 30% on the basis of 2021, the subsidy for public new energy vehicles decreased by 20%, and the technical parameters remained unchanged, The subsidy for new energy vehicles will continue until December 31, 2022, and the vehicles licensed after 2023 will no longer be subsidized, which is in line with the expectation; 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. Battery grade lithium carbonate increased by 10.6% over last week, battery grade lithium hydroxide quotation increased by 10.1% over last week, and spodumene quotation increased by 4.9% over last week. 1) Due to the shortage of hard lithium concentrate, Pilbara’s third lithium concentrate auction was finally concluded at the price of US $2350 / ton (FOB), which converted the lithium concentrate (CIF, 6.0% grade) to about US $2644 / ton, pushing up the production cost of lithium carbonate to about 175300 yuan / ton LCE. 2) On the supply side, when Chinese smelters enter the year-end maintenance period, the epidemic in Argentina breaks out, the supply at home and abroad may be reduced, and the bullish sentiment in the upstream is obvious; 3) On the demand side, the price difference between lithium carbonate and lithium hydroxide has increased, and the demand for causticization has increased. Some lithium iron manufacturers have increased their inquiry for lithium hydroxide, and lithium hydroxide is expected to follow up; 4) Lithium salt inventory: lithium carbonate inventory decreased by 5.63% month on month from 5863 to 5533 tons; Lithium hydroxide inventory increased from 408 to 397 tons, down 2.7% month on month. 5) On the overseas resource side, Chile’s presidential election landed, the left-wing party boric was elected, and policy uncertainty increased.
3. With the tightening of raw materials, cobalt prices may rise further. The quotation of MB cobalt (standard grade) and MB cobalt (alloy grade) increased by 0.1% and 0.1% month on month respectively, and the tax included price of metal cobalt in China has reached 536500 yuan / ton; China’s metal cobalt, cobalt sulfate and cobalt trioxide rose by 1.2%, 2.5% and 0.5% respectively. 1) On the supply side, in November 2021, China’s total import of cobalt raw materials was 8100 metal 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 continue until at least the first quarter of 2022; 2) A new variant strain of Omicron was found in South Africa, spreading faster than before. Cobalt raw materials from the Democratic Republic of the Congo (DRC) are mainly transported through Durban port, South Africa, and the shortage of raw materials is further exacerbated; 3) Ternary material enterprises began to resume work, lithium cobaltate enterprises increased their willingness to purchase, and the demand for aerospace and military industry recovered, the demand for overseas replenishment increased, the trading was vigorous, and the overseas cobalt price rose. 4) The inventory of cobalt intermediates in smelting enterprises remains low. At present, the price inversion of Chinese and overseas electric cobalt manufacturers is relatively serious, the production scheduling of electric cobalt enterprises is reduced or stopped, the inventory of electrolytic cobalt continues to be removed, and the price continues to rise.
4. Reshaping the pattern of rare earth permanent magnet industry. 1) In the spot market, the quotation of praseodymium neodymium oxide in China increased by 1.3% to 851000 yuan / ton compared with last week; In terms of medium and heavy rare earths, the quotation of dysprosium oxide and terbium oxide increased by 0.3% and 0.9% compared with last week. The spot circulation in the market is limited, and large manufacturers are willing to support the price. 2) On the demand side, the output of Nd-Fe-B enterprises in November was 22125 tons, an increase of 8.22% month on month and 4.78% year-on-year; 3) In terms of inventory, praseodymium neodymium oxide inventory decreased by 188 tons to 2627 tons compared with last week, a month on month decrease of 6.68%. 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 151600 yuan / ton, up 2.20% 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, and the price of antimony ingot was 73500 yuan / ton, unchanged 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.
