Main points:
The core of the fundamentals supporting this round of lithium price rise lies in the significant structural change and growth logic on the demand side, the bottleneck on the supply side lies in resources, the mismatch between supply and demand dominates, and the lithium price center is at a high level with stronger sustainability
Demand side: 1) structural optimization: the proportion of demand in the field of new energy has reversed, exceeding the traditional industrial field of nearly half of 16 years, and the demand for lithium has been more obvious in more than half of 21 years; 2) Significant demand growth: the domestic demand for new energy vehicles has increased significantly. China’s cagr45% + in the past 20-25 years and five years has strengthened the growth of the industry, with rigid demand and strong growth certainty. Supply side: 1) resource side bottleneck: the bottleneck is the lithium resource side with a development cycle of 3-5 years, rather than the smelting side with a production cycle of 1-2 years, and the mismatch time of industry supply and demand is longer; 2) The industry is concentrated and the head is cautious: most of the world’s high-quality lithium resources have been developed and concentrated in the head lithium enterprises. The new development projects may be more difficult, the cycle is longer, and the production capacity release may be less than expected. The head lithium enterprises holding high-quality resources are cautious in the amount, and the supply of lithium resources is difficult to be released significantly in the medium and long term. 3) The strengthening of strategic attributes and geopolitical factors exacerbate supply uncertainty. It is estimated that from 2021 to 2023, the lithium supply shortage will be 1.0/1.4/0.8 million tons of LCE, and the inventory is at a low level and the amplification effect in the middle reaches. The supply side is optimistic and the growth rate is expected to be lower than the neutral expected growth rate at the demand side. Lithium supply may become the decisive factor for the release of capacity in the middle and lower reaches. The persistence of high lithium prices is supported by solid fundamentals and profits move up.
The rise in lithium prices did not reverse the downstream demand, and the demand for new energy vehicles was transmitted to better digest the cost
The primary target of vehicle launch and supply chain security is not to increase the overall market share of vehicle enterprises, and it does not affect the overall market share. According to the 21q4 performance of overseas lithium enterprises, there is still a large gap between the lithium price and the current market price, reflecting that the lithium cost of head battery factory and car factory still has advantages. The rise of lithium price has been gradually transmitted to the middle and lower reaches, and the cost pressure of battery manufacturers has been further transmitted to the terminal through negotiation with vehicle manufacturers. The sales data shows that new energy vehicles are driven by marketization, and the product power strongly supports the consumer demand, gradually eliminating the market’s concerns about the decline of subsidies and price rise. The market demand is the fundamental supporting factor of cost transmission.
The price of market mechanism is determined by supply and demand, and administrative coordination accelerates the development of lithium resources to ensure the safety of the industrial chain
In the process of price change and cost transmission, the relationship between supply and demand is the decisive factor of lithium price under the background of market mechanism. At the same time, administrative means coordinate all links to accelerate the development of China’s lithium resources, ensure the supply of lithium resources, fully follow the market law, ensure the safety of the supply chain from the market mechanism, strengthen the industrial competitiveness, and better support the healthy development of China Shanxi Guoxin Energy Corporation Limited(600617) automobile, a strategic emerging industry.
Investment suggestions: on the one hand, it is recommended to pay attention to companies with strong lithium resource attributes, on the other hand, it is recommended to pay attention to companies that can stabilize output and still have the potential to expand production, there is still room for cost reduction and high certainty of performance release
Risk warning: political policy risk; The energy storage development of new energy vehicles is less than expected; Disruptive technological breakthroughs; Product prices fell more than expected; The price of raw materials fluctuates. It is recommended to pay attention to the company’s profit forecast and rating:
