Report summary:
The 154 environmental protection and public utility stocks we tracked lost 2.28 percentage points to the Shanghai index this week and outperformed the Shanghai index by 21.16 percentage points since the beginning of the year. This week, Gcl Energy Technology Co.Ltd(002015) , Shenyang Jinshan Energy Co.Ltd(600396) , Jiangsu Jiangnan Water Co.Ltd(601199) increased by 9.39%, 9.19% and 7.48% respectively, showing good performance Zhejiang Tuna Environmental Science & Technology Co.Ltd(603177) , Xinjiang Xintai Natural Gas Co.Ltd(603393) , Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) decreased by 14.09%, 10.72% and 10.55% respectively, showing poor performance.
Lithium salt prices are stable and do not have the basis for a sharp decline
According to SMM data, as of Friday (March 18), the quotation of battery grade lithium carbonate was 503000 yuan / ton, up 10000 yuan / ton month on month; The quotation of industrial grade lithium carbonate is 485500 yuan / ton, unchanged month on month; The quotation of battery grade lithium hydroxide was 489500 yuan / ton, up 9000 yuan / ton month on month; The quotation of industrial grade lithium hydroxide was 477000 yuan / ton, up 9000 yuan / ton month on month. The price of lithium carbonate remained stable this week, which is in line with our previous judgment. Due to the recovery of lithium carbonate production in Qinghai Salt Lake in March, the production capacity began to climb after superposition maintenance, and the lithium carbonate supply increased month on month. Lithium carbonate prices are expected to remain high and volatile in the future. There was a large price difference between lithium hydroxide and lithium carbonate in the early stage, and lithium hydroxide showed a trend of catching up this week. It is expected that the price of lithium hydroxide will also remain high and volatile after wiping out the price difference. Due to the off-season of downstream consumption in the second quarter and the increase of supply month on month, the lithium salt price may fall slightly. However, at this stage, it is time for Australian enterprises and Chinese lithium salt plants to sign the long-term agreement of concentrate in the second quarter. Referring to the current lithium salt spot price index, the long-term agreement price of concentrate in the second quarter is expected to rise month on month compared with the first quarter. According to the data disclosed in the quarterly report of Australian mining enterprises, the long-term agreement in the first quarter is generally between us $26 Jinzai Food Group Co.Ltd(003000) / ton. On March 18, Platts energy information estimated that the price of lithium concentrate (SC6) was US $5000 / ton (FOB, Australia). Considering the month on month growth of the cost of raw lithium concentrate, the price of lithium salt did not have the basis to fall. It is expected that lithium salt will maintain stability at a high level in the second quarter against the background of the month on month rise in the price of raw lithium concentrate.
The power consumption of the whole society continued to grow, and the power production changed from decline to rise.
In February, China’s electricity consumption continued to grow, reaching 623.5 billion kwh, a year-on-year increase of 16.9%. From January to February, the total electricity consumption of the whole society was 1346.7 billion kwh, a year-on-year increase of 5.8%. By industry, the electricity consumption of the primary industry was 16.3 billion kwh, a year-on-year increase of 12.8%; The electricity consumption of the secondary industry was 841.3 billion kwh, a year-on-year increase of 3.4%; The electricity consumption of the tertiary industry was 248.8 billion kwh, a year-on-year increase of 7.2%; The domestic electricity consumption of urban and rural residents was 240.3 billion kwh, a year-on-year increase of 13.1%. The domestic electricity consumption of primary industry and urban and rural residents maintained double-digit growth. In terms of power generation, from January to February 2022, power production changed from decline to rise, with significant improvement month on month. The power generation capacity was 1314.1 billion kwh, a year-on-year increase of 4.0%, and a decrease of 2.1% in December last year. In terms of varieties, in addition to wind power, thermal power, hydropower, nuclear power and Cecep Solar Energy Co.Ltd(000591) power generation increased to varying degrees. Among them, the power generation of thermal power from January to February was 4.3% year-on-year, maintaining steady growth and playing the role of ballast; In terms of other renewable energy sources, hydropower, nuclear power and Cecep Solar Energy Co.Ltd(000591) power generation increased by 8.2%, 9.6% and 6.5% respectively, with steady growth in power generation and continuous optimization of the overall energy structure. Wind power generation decreased by 7.6% year-on-year. We judge that it is mainly due to the impact of the high base in the same period in 2021.
The transaction of thermal coal market is mainly based on the rigid needs of downstream users, and the release of future demand supports the high operation of coal prices.
This week, the transaction of China Shipbuilding Industry Group Power Co.Ltd(600482) coal market is mainly based on the rigid needs of downstream users. In terms of origin, most coal mines in the main production areas produced normally this week. Only some coal mines in some areas had equipment maintenance and other conditions, and the output fell slightly. On the whole, China’s supply is still at a high level. In some areas, the difficulty of automobile shunting increases, the turnover efficiency decreases, the number of long-distance vehicles to the mine decreases, and the shipment speed of coal mines dominated by automobile transportation slows down; Coal mines dominated by fire transportation have more stable shipments without inventory pressure. In terms of ports, the northern port power coal market is weak this week. Since last weekend, the inquiry enthusiasm of downstream users in coastal areas has declined, and the psychology of port traders to stop profit and ship goods has increased. The quotation of traders decreased significantly in the first half of this week; In the past two days, supported by cost and other factors, the decline of port coal price narrowed and slowed down. In terms of downstream demand, the temperature rebounded, the residential power load decreased, some main power plants in some areas began spring maintenance one after another, the enthusiasm for purchasing coal in the market was not boosted, and the replenishment of storage continued to be dominated by long-term cooperation; Steel, building materials and other non power users are more cautious in purchasing, mainly on demand.
The average price of LNG in China was adjusted in a narrow range, and the rise and fall of natural gas in the United States fluctuated.
The average price of LNG in China has been adjusted in a narrow range. In terms of supply, China’s LNG output has maintained an increase this week, the liquid level in the liquid plant is still at a low level, the arrival volume of LNG ships has increased slightly month on month compared with last week, and the shipment volume of tank batch at the terminal is still small; In terms of demand, with the cooling weather in North China, the delay of heating time in some areas, the terminal demand has picked up, coupled with the insufficient supply of tank batches at the terminal, and the “Southward” increase of resources in the north, but the current industrial demand is still insufficient. Limited by transportation and the current high price of LNG, the industrial demand still needs to be restored. The overall supply and demand of LNG in China will continue to fluctuate, or the overall supply and demand of LNG is expected to remain low in the later stage of next week, which is an important factor to support the overall supply and demand of LNG in China. The US natural gas market fluctuated in this cycle. The main reason for the upward market during the cycle was the influence of European geopolitics, which played a certain supporting role in the US natural gas market. The main reason for the market decline in the cycle is that the seasonal demand has declined with the rise of temperature. Overall, the market as a whole fluctuated in a narrow range.
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, and also affect the release speed of global medium and short-term lithium resource production, Lithium salt prices may remain high for at least two years in order to stimulate and accelerate the process of global resource development. As of March 18, 2022, the price of electric carbon has reached 517500 yuan. It is expected that in the future, with the release of production capacity at the end of Qinghai Salt Lake in March, the price will remain high and fluctuate. Even if there is a decline in the off-season of downstream consumption in the second quarter, it is also a slight decline and does not have a significant downward basis. 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 Dagu 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 output through OEM, and [ Youngy Co.Ltd(002192) ], which is promoting the 2.5 million T / a lithium ore beneficiation project in yuanyangba, with rich reserves of lithium mica resources, [ Jiangxi Special Electric Motor Co.Ltd(002176) ] is being processed for the exploration and mining of Xikeng lithium mica mine.
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.
