Report summary:
The 154 environmental protection and public utility stocks we tracked lost 1.72 percentage points to the Shanghai index this week and outperformed the Shanghai index by 18.19 percentage points year to date. This week, Shandong Xinneng Taishan Power Generation Co.Ltd(000720) , Tianjin Capital Environmental Protection Group Company Limited(600874) , Zhejiang Tuna Environmental Science & Technology Co.Ltd(603177) increased by 17.32%, 10.25% and 10.04% respectively, showing good performance Tianjin Motimo Membrane Technology Co.Ltd(300334) , Ningbo Energy Group Co.Ltd(600982) , Jiangsu Jiuwu Hi-Tech Co.Ltd(300631) decreased by 12.24%, 11.89% and 9.17% respectively, showing poor performance.
Lithium salt prices fell slightly, and the rise of concentrate supported the high shock of lithium prices. According to SMM data, as of Friday (April 1), the quotation of battery grade lithium carbonate was 502500 yuan / ton, a month on month decrease of 05000 yuan / ton; The quotation of industrial grade lithium carbonate was 485000 yuan / ton, with a month on month decrease of 0500 yuan / ton; The quotation of battery grade lithium hydroxide is 491500 yuan / ton, unchanged month on month; The quotation of industrial grade lithium hydroxide is 479000 yuan / ton, unchanged month on month. On March 31, fastmarkets evaluated the price of battery grade lithium carbonate in China at 495000 yuan / ton, a decrease of 7500 yuan / ton month on month; The evaluation price of battery grade lithium hydroxide in China is 495000 yuan / ton, with a month on month decrease of 5000 yuan / ton. The evaluation price of battery grade lithium carbonate in the East Asian market is US $71.5/kg, unchanged month on month; The evaluation price of battery grade lithium hydroxide in the East Asian market is US $77.5/kg, unchanged month on month. This week, the price of lithium carbonate in China fell slightly, while lithium hydroxide remained unchanged. In terms of supply, lithium carbonate in Qinghai has gradually increased, lithium hydroxide is still overhauled by manufacturers, and the overall supply is low. In terms of demand, cathode materials were gradually purchased in April at the end of March. At present, it is mainly rigid demand. Under the background that the supply increased slightly and the demand remained stable, the price of lithium salt decreased slightly. We judge that Q2 belongs to the off-season of downstream procurement, with a slight increase in upstream supply month on month, and the price may fluctuate slightly. However, considering the high cost of lithium concentrate, the decline is limited. To sum up, we expect future prices to remain high and volatile.
MT cattlin 2022q2 lithium concentrate is priced at US $5000 / ton, supporting the high price of lithium salt.
On April 1, allkem announced that the sales price of 2022q1 spodumene concentrate was about 2218 US dollars / ton (SC 6%, CIF), including the tons delayed in 2021q4. As for the pricing guidance of 2022q2 lithium concentrate, the company said that the strong situation of spodumene market is supporting the in-depth discussion on the pricing of spodumene concentrate of about 5000 US dollars / ton (SC 6%, CIF) in Q2. The sales volume is about 50000 tons, and the processing cost of lithium carbonate corresponding to spodumene concentrate of 5000 US dollars / ton is 320000 yuan / ton. On March 31, the evaluation price of fastmarkets lithium concentrate was 5750 US dollars / ton, an increase of 1125 US dollars / ton month on month. On April 1, Platts energy information assessed that the price of lithium concentrate (SC6) was maintained at US $5000 / ton (FOB, Australia). Ken brinsden, managing director and part-time CEO of pilbaraminerals, said at the recent RRs investor luncheon that in the second half of 2021, the average sales price of the company’s lithium concentrate was 1250 US dollars / ton, and in 2022q1, the guiding price was between 2600 and 3000 US dollars (6% grade). However, the current actual price is between about $4500 and $5000 per ton. At the same time, Ken believes that this is a very healthy pricing and may remain strong for some time. Because a mine takes five to seven years to start and operate, but you can build a chemical plant and a car plant in less than two years, so it takes quite a long time to catch up at the mine end. We judge that the long-term association price of 2022q3 lithium concentrate will continue to rise sharply month on month. The cost of processing plants using spodumene to process lithium salt continues to rise, and it is difficult to make a correction in the price of lithium salt.
Accelerate the construction of a modern energy system and help achieve the goal of carbon peak and carbon neutralization. On April 1, Zhang Jianhua, Secretary of the party leading group and director of the national energy administration, said in the people’s Daily that during the “14th five year plan” period, we should accelerate the construction of a modern energy system, build an energy power, fully ensure national energy security, help achieve the goal of carbon peak and carbon neutrality, and support high-quality economic and social development. The article puts forward that green and low-carbon has become the main theme of energy development. In the past five years, renewable energy has provided about 60% of the world’s new power generation. China’s energy structure has been continuously optimized, and the proportion of non fossil energy consumption has reached about 16.6%. The 14th Five Year Plan period is a critical and window period for carbon peak, and the task of energy development and transformation is more urgent. In terms of measures to comprehensively build a modern energy system, the article puts forward: 1) comprehensively improve the ability of energy security; 2) Build a clean and low-carbon energy production and consumption system; 3) Promote the coordinated development of regional urban and rural energy; 4) Improve the scientific and technological innovation ability of the energy industry; 5) Enhance the efficiency of energy governance; 6) Open up new prospects for win-win cooperation in energy. Among them, building a clean and low-carbon energy production and consumption system, promoting the construction of an energy supply system with clean and low-carbon energy as the main body, and improving the effective consumption of clean energy will contribute to the development of new energy industry, accelerate the rapid increase of China’s wind, light and other power generation installed capacity, help new energy operating enterprises form scale advantages as soon as possible, and promote the healthy development of the industry. At the same time, we have guided green energy consumption habits, accelerated the transformation process of green power consumption, and helped achieve the goal of carbon peak and carbon neutrality.
The overall trading activity of thermal coal market is not high, and the decline is obvious in some areas. In terms of China Shipbuilding Industry Group Power Co.Ltd(600482) coal producing areas this week, the coal mines in the main producing areas are in normal production, and most mainstream large mines actively fulfill the long-term agreement. The wait-and-see mood of end users has increased, the enthusiasm of traders has also declined, the number of vehicles to transport to mines has decreased, the shipment speed of coal mines has slowed down, some coal mines in some areas have accumulated inventory, and the overall market price is weak. In terms of ports, the trading activity of the northern port market this week was not high, and the price was mainly downward under pressure. Recently, with the seasonal decline of daily consumption of power plants, the pace of procurement has slowed down, a small number of tenders have a strong mentality of price reduction, and the pit mouth price has also decreased. The shipping cost of underground coal has decreased, and the regulation strength at the policy end has also been expected to increase. Some traders’ panic psychology has been fermented, the quotation has continued to decline, and the decline has expanded by the end of the month. In terms of downstream demand, the demand side weakened as a whole this week. This week, the daily consumption of the power plant fell seasonally, the procurement demand slowed down, and the coal consumption of the power industry weakened; At the same time, the wait-and-see mood of non power users has also strengthened, and the number of ships at the anchorage of northern ports has decreased significantly.
The average price of LNG in China was adjusted in a narrow range, and the overall trend of natural gas in the United States was first up and then down.
In terms of LNG supply in China this week, the output increased month on month, the liquid level of liquid plants was mostly low, and the amount of sea and gas arriving at the port decreased slightly month on month compared with last week; In terms of demand, the downstream has maintained a state of on-demand procurement recently. On the one hand, the current price is too high, on the other hand, it is obviously limited by transportation in many places. The downstream procurement path is not smooth, and the wait-and-see mood is obvious. On the whole, with the end of the winter heating season, the urban fuel demand continues to decline, and there is still room for industrial demand to improve.
Next week’s LNG supply may fluctuate at a low level, and the demand may be weak. Therefore, Zhuo Chuang information expects that China’s LNG market may show a certain slow trend in the short term, but the price is still dominated by narrow fine-tuning. In this cycle, the US natural gas market as a whole showed a trend of rising first and then falling. On the one hand, the situation in relevant international regions continued to be tense, which was good for us natural gas exports. At the same time, the continued downward natural gas inventory data also played a certain role in supporting prices; On the other hand, the expectation of temperature rise and the inhibition of high prices on demand have led to a decline in market prices.
Investment advice
The long-term association price of lithium concentrate in 2022q2 MT cattlin mine is US $5000 / ton, which has doubled compared with 2022q1, and the corresponding lithium carbonate processing cost is RMB 320000 / ton. It is expected that the price of lithium concentrate in Q3 Australia will rise further, and it is difficult for lithium salt to recover under the support of high cost. As early as the beginning of 2021, Pilbara minerals, 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. At the same time, the long-term agreement price of 2022q2-3 lithium concentrate will rise sharply. In these two quarters, under the condition of high fluctuation of lithium salt price, the profit differentiation per ton of lithium salt processing plants and integrated enterprises will become more and more obvious. It is suggested to pay attention to the enterprises integrating upstream and downstream. 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].
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.
