This week's view: natural gas and electricity prices rise together, and Europe's energy transformation is expected to accelerate
The EU's natural gas power generation accounts for a relatively high proportion and is highly dependent on imports. Natural gas is an important part of the EU power system, accounting for more than 20% of power generation. Constrained by the relative shortage of its own resources, the EU is highly dependent on imports of natural gas, of which Russia is the most important natural gas supplier, accounting for 45% of the EU's natural gas imports in 2021.
The surge in European natural gas prices has led to a rapid rise in electricity prices. Under the influence of multiple factors such as post epidemic demand recovery, abnormal climate and blocked supply, the European natural gas price ushered in a rapid rise in 2021. According to the statistics of the world bank, the European natural gas price reached US $38 / million BTU in December 2021, more than four times higher than that at the beginning of the year. The rise of natural gas price directly drives the synchronous increase of power generation cost in Europe. In 2021, the wholesale price of electricity in Germany, France and other major European countries has increased by 2-3 times. Under the European power market mechanism, the rise of power generation side cost will be directly transmitted to end users. Since the second half of 2021, the electricity price of European residents and industry and Commerce has also shown a rapid upward trend. Considering the complex and changeable geopolitical situation such as the current conflict between Russia and Ukraine and the great uncertainty of European natural gas supply in the future, the subsequent European energy prices may continue to remain high or even rise further.
Soaring natural gas prices are expected to accelerate the process of energy transformation in Europe. Against the background of rising natural gas and electricity prices, the European Commission released the REpower EU action plan aimed at strengthening EU energy security and sustainability on March 8, 2022, which plans the future energy development path from the perspectives of diversified gas supply, accelerating electrification and promoting industrial transformation. We believe that the rise in natural gas prices will effectively improve the economy of new energy relative to fossil energy, so as to stimulate the installed demand of new energy on the power generation side and user side in Europe.
Market review this week: the adjustment range of power equipment sector is large in the 10th week of 2022
This week, the power equipment sector fell 0.2%, outperforming the CSI 300 index by 0.8%, among which the battery sector performed best (+ 4.5%), power grid equipment (- 5.2%) and wind power equipment (- 6.6%) performed relatively poorly.
Industry chain tracking: the price of lithium battery industry chain fluctuates, and the prices of battery chips and components rise
Lithium battery: the downstream demand boom is superimposed, and the shortage of some raw materials continues. The overall price of the lithium battery industry chain remains high this week. Among them, the price of Sanyuan 811 cathode material maintains an upward trend, the price of electrolyte decreases by different ranges, the price of lithium carbonate increases slightly, and the prices of electrolytic nickel and electrolytic cobalt decline.
Photovoltaic: the price of silicon material and silicon wafer stabilized this week, and the price of battery and module rose. Driven by the strong demand at home and abroad, China's Silicon demand is good in the short term, while the new supply lags slightly, and the high price of silicon tends to stabilize after the year. In the case of high raw material prices, the transaction prices of battery chips and components rose to varying degrees this week.
Risk tips: changes in new energy industry policies, supply chain bottlenecks lead to lower than expected demand, intensified market competition leads to decline in industry profitability, etc.
