Report summary:
The 154 environmental protection and public utility stocks we tracked lost 0.51 percentage points to the Shanghai index this week and outperformed the Shanghai index by 19.99 percentage points since the beginning of the year. This week, Ningbo Energy Group Co.Ltd(600982) , Jiangsu Jiuwu Hi-Tech Co.Ltd(300631) , Shanxi Guoxin Energy Corporation Limited(600617) increased by 12.48%, 7.97% and 7.87% respectively, showing good performance Shenyang Jinshan Energy Co.Ltd(600396) , Huaneng Power International Inc(600011) , Ning Xia Yin Xing Energy Co.Ltd(000862) decreased by 13.12%, 10.75% and 8.96% respectively, showing poor performance.
2022q2 lithium concentrate long-term cooperative price outlook, continue to be optimistic about upstream and downstream integrated enterprises
Looking back from 2021 to now, the two fastest growing quarters of the long-term association of lithium concentrates are 2021q4 and 2022q1, respectively, US $1 Ccs Supply Chain Management Co.Ltd(600180) 0 / ton and US $25 Jinzai Food Group Co.Ltd(003000) / ton, almost doubling month on month. The main reason is that the price of lithium salt doubled earlier than the previous quarter. Although the growth rate of lithium concentrate in Australia lags behind that of lithium salt in China by one quarter, what we can see is that it will make up for the rise in the next quarter, but due to the time difference, it has left huge profits to China’s lithium salt processing plants. Based on the maximum selling price of lithium concentrate of 2022q1 pilbaraminerals of US $3000 / ton, the profit is divided into upstream mines: the downstream lithium salt plant is 3:7. At present, it is time for Chinese lithium salt processing enterprises and Australian lithium concentrate suppliers to discuss and sign the long-term cooperative price of 2022q2 lithium concentrate. The price of lithium carbonate in the middle and late March of 2022 was 505000 yuan / ton, which doubled month on month compared with the price of lithium carbonate when signing the price of lithium concentrate last quarter. The long-term cooperative price of 2022q1 lithium concentrate was 25 Jinzai Food Group Co.Ltd(003000) dollars / ton. How much did the price of 2022q2 lithium concentrate rise, We can learn a little from the evaluation price of a third-party organization. On March 17, the evaluation price of fastmarkets lithium concentrate was $4625 / ton, an increase of $625 / ton month on month. On March 25, Platts energy information assessed that the price of lithium concentrate (SC6) was maintained at US $5000 / ton (FOB, Australia). On March 9, Ken brinsden, the part-time CEO of the managing director of pilbaraminerals, said that the price of 2022q2 lithium concentrate preliminarily evaluated by him was 4500 US dollars / ton. If BMX auction was conducted now, assuming that the profit margin of lithium salt processing plant was about 20%, the price of lithium concentrate would exceed 6000 US dollars / ton. The spodumene concentrate imported from Australia accounts for about 60-65% of the lithium salt raw materials in China. Assuming that the long-term cooperative price of lithium concentrate in 2022q2 doubles to US $5 Jointo Energy Investment Co.Ltd.Hebei(000600) 0 / ton month on month, it means that the cost of most lithium salts produced in China will rise to RMB 32 Shenzhen Capstone Industrial Co.Ltd(000038) 0000 / ton. Later, when the price of lithium salt in 2022q2-3 is relatively stable, the profit margin of the industrial chain will probably transfer to the upstream.
The 14th five year plan for modern energy system was released to promote the formation of a green and low-carbon energy consumption model.
On March 22, the national development and Reform Commission and the National Energy Administration issued the “14th five year plan” for modern energy system (hereinafter referred to as the “plan”). The plan proposes that by 2035, decisive progress will be made in the development of high-quality energy and a modern energy system will be basically completed. The ability to ensure energy security has been greatly improved, green production and consumption patterns have been widely formed, and the proportion of non fossil energy consumption has been further significantly increased on the basis of reaching 25% in 2030. Renewable energy power generation has become the main power supply, the construction of new power systems has achieved substantial results, and the total carbon emissions have decreased steadily after reaching the peak. The “14th five year plan” is the key period to achieve carbon peak and promote carbon neutralization. Renewable energy will change from the incremental supplement of energy and power consumption to the main body of energy and power consumption, accelerate the transformation of energy structure to green and low-carbon, contribute to the expansion of the installed scale of wind power and photovoltaic power generation, and promote the rapid development of new energy industry. The wide formation of green production and green consumption patterns will help the consumption of clean energy, maintain the stability and security of the power grid, and make the sustainable development of clean energy.
The power coal market is supported and may remain high in the future.
China Shipbuilding Industry Group Power Co.Ltd(600482) coal market has support this week. In terms of origin, most of the coal mines in the main production areas are in normal production this week, and the mainstream large mines actively fulfill the long-term association and guaranteed supply resources. The market circulation resources are relatively limited. Some coal mines give priority to the demand of the platform, and the platform resources are sufficient, but it is difficult to ask for a car. The automobile transportation turnover efficiency has not been improved, and the automobile transportation fee of some routes has increased. On the demand side, the purchase demand of end users continues to release, while intermediate traders are more fast in and out, and the enthusiasm of coal storage on the site is not high. In terms of ports, the transaction in the thermal coal market of northern ports this week is mainly based on the rigid needs of downstream users. This week, it was difficult to transfer automobile transportation resources into some ports in the north, and the resources of fire transportation to the port were mainly long-term cooperation. The coal resources in the market were still relatively limited, and the quotation of traders was strong; However, the acceptance of downstream users to high prices is not high, and the market transaction is not active. To the second half of this week, the port coal price stagnated and showed signs of loosening. In terms of downstream demand, this week, some power plants in some parts of China have released the demand for inventory, and have a high enthusiasm to fulfill the long-term cooperative coal; In addition, some cement users are nearing the end of peak shifting and kiln shutdown, and the demand for procurement and preparation is released. The procurement of other non power users continues to be carried out on demand. Although the number of ships at the port anchorage is reduced compared with the same period last week, it remains at a high level.
The average price of LNG in China was adjusted in a narrow range, and the overall natural gas in the United States fluctuated upward.
In terms of supply, China’s LNG production increased this week, the liquid level of liquid plant was generally controllable, the amount of sea and gas arriving at the port decreased slightly month on month compared with last week, and the shipment volume of tank batch at the terminal continued to decline; In terms of demand, due to the impact of cold air in some northern regions, the demand for urban fuel has rebounded slightly. At present, due to the high price of terminal, the cross regional circulation of Chinese liquid plants has increased, supporting the price of liquid plants. However, at present, the logistics traffic is obviously blocked, the cross regional circulation is more difficult, and the average price of LNG in China has been adjusted in a narrow range. Next week, the LNG market supply may fluctuate at a low level, and the demand may be weak. Zhuo Chuang information expects that the LNG price may be stable and downward in the later stage, but the decline may be very limited. In this cycle, the overall shock of the US natural gas market was dominant. During the cycle, the geopolitical problems in Europe continued to be tense and there was no good improvement, and the US natural gas export maintained a certain intensity; In addition, the US natural gas inventory has declined, and the market is worried, which has a certain supporting effect on the US natural gas market.
Investment advice
As early as the beginning of 2021, pilbaraminerals, which sold lithium concentrate overseas, and Galaxy resources, which had not been merged at that time, publicly stated that the upstream resource side was the strongest in this round of shortage, and advocated that the downstream processing of upstream resources should be a profit sharing model of 73%. In 2021, due to the price rise of lithium carbonate in China one quarter earlier than that of overseas lithium concentrate and the inventory effect of lithium concentrate, the single ton profit of processing plants and integrated enterprises did not show very differentiation. However, in 2022, especially q2-3 in 2022, it is difficult for China to have lithium concentrate inventory to dilute the cost of externally extracted lithium concentrate, and when we see the high fluctuation of lithium salt price in these two quarters, the profit differentiation between lithium salt processing plants and integrated enterprises per ton will become more and more obvious. It is suggested that we pay attention to upstream and downstream integrated enterprises. It is recommended to pay attention to the under construction Lijiagou spodumene mining and beneficiation project, which will cooperate with Dagu Dongchuan energy investment to integrate and develop the lithium resources in Ganzi and ABA in the future [ Sichuan New Energy Power Company Limited(000155) ]. The beneficiary targets include [ Tianqi Lithium Corporation(002466) ] which has been increasing production in the next five years and can achieve large 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 lithium mica resources.The, [ 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 the national industrial policy. Promoting the integrated construction and professional operation of urban domestic waste treatment facilities is the development trend of the industry, and the professional waste treatment service providers providing integrated investment, construction and operation services will have 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.
