The price of lithium carbonate is expected to remain stable at this stage, and the price rise of new energy vehicles will ease the cost pressure. As of March 20, the price of cobalt concentrate (East China) this week was US $31 / lb, up 1.97% from last week. At present, the rise of overseas cobalt prices has generated emotional transmission to China, while the demand side tends to be cautious about cobalt procurement, and the short-term cobalt price is expected to fluctuate. In terms of lithium salt, the average price of battery grade lithium hydroxide (> 56.5%) was 493900 yuan / ton, up 2.49% from last week, and the average price of battery grade lithium carbonate was 517500 yuan / ton, flat from last week. Baichuan Yingfu data show that the lithium carbonate inventory is stable compared with last week, with a slight increase, but little change. The manufacturer started normally, but the downstream inquiry intention was slightly negative than before. Lithium carbonate operated steadily, the transaction was slightly dull, and the price was adjusted in the high area. It is reported that major new energy vehicle enterprises have recently announced price increases ranging from several thousand yuan to tens of thousands of yuan to alleviate the pressure on the cost of upstream raw materials. We are still optimistic about the terminal demand of new energy vehicles after the price rise. It is expected that the performance of the lithium battery industry chain will grow rapidly in the first quarter. It is suggested to pay attention to the first quarter report of the lithium battery sector.
Suggestion: the production and sales of new energy vehicles have been strong since the beginning of the year, but the upstream battery grade lithium carbonate is in short supply, driving the rapid rise in the price of cathode materials, and the profitability of lithium battery manufacturers is under pressure. Continue to recommend the midstream links with good competition pattern, and be optimistic about the leading companies with cost advantages and performance advantages: 1) cathode & precursor: the production and sales growth rate is considerable, the demand space for lithium iron phosphate is open in the future, the trend of high nickel of ternary cathode is clear, and the leading enterprises actively expand their production and seize the market share of high-end precursors; 2) Lithium battery manufacturers: Although the price of battery grade lithium carbonate has increased significantly and the profitability of lithium battery manufacturers is under pressure, we are still optimistic about the global automotive automation process and the market value growth space of leading battery enterprises, so we can buy on bargain hunting appropriately; 3) Diaphragm track with good competition pattern and profitability: the gross profit margin of head diaphragm enterprises has remained above 40% in recent three years. The head enterprises have full production and sales. Under the rigid production expansion cycle, the leading enterprises give priority to the growth of demand market. With the advancement of overseas electrification process, the proportion of overseas customers is increased, which is expected to further improve profits; 4) Electrolyte race track: with the expansion of electrolyte production, the market is worried about its periodicity. The head company benefited from the long-term association orders, the impact of price disturbance was stabilized in 2022, and the cost and profit advantages were further highlighted by adding new lithium salt business; 5) Lithium battery equipment: during the high-speed growth period of the 14th five year plan, the power battery started the second production expansion tide, superimposed with the rapid growth of overseas demand, the main lithium battery manufacturers accelerated their layout in Europe, and China's leading lithium battery equipment enterprises will obtain new demand growth points; 6) Lithium copper foil race track: in 2022, the supply gap is uncertain, and the leading enterprises are expected to benefit first.
Risk tips
The production and sales of new energy vehicles are less than expected, and the policy is less than expected; New orders or delivery lower than expected; Risks of technological renewal; Market competition intensifies risks; Supply chain shortage risk, etc.
