The 154 environmental protection and public utility stocks we tracked lost 1.38 percentage points to the Shanghai index this week and outperformed the Shanghai index by 21.65 percentage points since the beginning of the year. This week Wangneng Environment Co.Ltd(002034) , Qiaoyin City Management Co.Ltd(002973) , Jiangxi Hongcheng Environment Co.Ltd(600461) rose 13.49%, 5.89% and 5.15% respectively, showing good performance; Jiangsu New Energy Development Co.Ltd(603693) , Huaneng Power International Inc(600011) , Guangdong Electric Power Development Co.Ltd(000539) decreased by 18.45%, 17.54% and 16.26% respectively, with poor performance.
The Spring Festival procurement will end in mid January, and lithium salt prices will bid farewell to the accelerated rise period.
On January 6, fastmarkets evaluated the price of battery grade lithium hydroxide in China as 240000-250000 yuan / ton, up 7500 yuan / ton month on month; The quotation for battery grade lithium carbonate in China was 300000-33000 yuan / ton, up 32500 yuan / ton month on month. This week, as the material factories continued to replenish under the condition of continuous tight supply, the price of lithium carbonate in China continued to soar during the week, which in turn supported the lithium hydroxide Market (some enterprises purchase lithium hydroxide to process lithium carbonate) and the markets in East Asia, Europe and the United States. Fastmarkets evaluated the CIF price of battery grade lithium carbonate in China, Japan and South Korea at US $40-43 / kg, an increase of US $1.5/kg compared with last week; The estimated CIF price of battery grade lithium hydroxide in China, Japan and South Korea is US $35-37 / kg, up US $1 / kg from last week. On January 6, fastmarkets assessed the price of spodumene concentrate (SC6%) at $2500 / ton, an increase of $200 / ton month on month, far exceeding the price of the fourth quarter long-term agreement signed by the current enterprise. It is expected that the long-term association price of 2022q1 lithium concentrate will continue to rise under the background of strong demand and insufficient supply. Recently, the price of lithium carbonate has shown an accelerated upward trend, with an average daily increase of 3000-5000 yuan / ton, driven by the dual promotion of downstream spring festival goods preparation and supply shortage. It is expected that by mid January, the whole spring festival stock procurement will come to an end, the accelerated upward phase of electricity and carbon prices will end, and the price may reach 340000-350000 yuan / ton. Excluding the peak season and stock season, the price will be stable in this range for most of 2022, and the endless panic about the rising cost of downstream raw materials will dissipate.
Accelerate the release of opinions on the implementation of rural energy transformation and development, and support the large-scale development of clean energy in the county.
Recently, the national energy administration, the Ministry of agriculture and rural areas and the National Bureau of Rural Revitalization jointly issued the implementation opinions on accelerating the transformation and development of rural energy and Promoting Rural Revitalization (hereinafter referred to as the Implementation Opinions). The main goal is to build a number of green and low-carbon pilot projects for rural energy by 2025, continuously increase the proportion of wind power, Cecep Solar Energy Co.Ltd(000591) , biomass energy and geothermal energy in rural energy, further enhance the guarantee capacity of rural power grid, develop and expand distributed renewable energy, and widely apply new green and low-carbon models and new business forms. The implementation opinions pointed out that it is necessary to promote the spontaneous self use of electricity by thousands of villages and households, use the idle land of farmers and the roof of rural houses, build distributed wind power and photovoltaic power generation, allocate a certain proportion of energy storage, spontaneous self use, local consumption and surplus power on the Internet. This is conducive to the development of distributed wind power and photovoltaic, promote the increase of the installed scale of new energy, and the equipped energy storage facilities are conducive to the consumption and transmission of clean energy, and promote the utilization and development of rural clean energy. The large-scale development of wind, light and other new energy industries is expected to reduce the development cost of clean energy, improve the comprehensive utilization efficiency, and accelerate the construction of county or rural clean energy system. During the “14th five year plan” period, clean energy is bound to show a rapid development trend. The release of the implementation opinions, large-scale distributed new energy access and the improvement of the power supply guarantee capacity of rural power grid ensure the transformation and development of rural energy, and will also help China achieve the “double carbon” goal.
The price of thermal coal rebounded slightly, and the release of downstream demand supported the price.
The China Shipbuilding Industry Group Power Co.Ltd(600482) coal market rebounded slightly this week. In terms of origin, after the new year’s Day holiday, most of the coal mines in the main production area stopped production for maintenance in the early stage, and most of the coal mines resumed normal production. Some chemical users in the downstream were worried that some coal mines would stop production before the festival in the latter half of the year, the supply would be tightened, and there would be a release of an appropriate amount of reserve demand. Superimposed with the impact of the suspension of export risk of Indonesian coal, the sales situation of coal mines improved, and the inventory decreased, In some areas, the mine mouth prices rebounded, and the shipment rhythm did not slow down significantly after the price increase. In terms of downstream demand, China’s downstream power users still have a strong wait-and-see psychology for market coal this week, and their enthusiasm for coal inquiry and purchase in the market is not high; However, some non power users such as chemical industry and steel in the inland have released the demand for replenishment, which supports the pit mouth price.
China’s average LNG price fluctuated and increased, and us natural gas continued to fluctuate.
China’s average LNG price fluctuated and increased this week. In terms of supply, the output of LNG plant rebounded month on month, and the shipment volume of tank batch at the terminal decreased significantly; In terms of demand, after the festival, with the lifting of high-speed traffic restrictions, the market trading improved. Among them, the demand for urban fuel and supplementary storage in Shaanxi was obvious, driving the price rise in Shaanxi and surrounding areas; However, the overall temperature performance in China has been stable recently, which is still not conducive to the demand for natural gas by downstream users. LNG supply may fluctuate slightly next week, and demand may continue to be weak. It is expected that there may still be a small upward space in the LNG market in the near future, but the prices will vary depending on the shipment situation. The US natural gas market continued to fluctuate in this cycle. The main reason for the rise in the market during the cycle is that the demand for natural gas in the United States has increased due to the impact of local cold air, which supports the rise of the market; The main reason for the market decline during the cycle is that the overall natural gas inventory in the United States is relatively sufficient. Although the inventory situation is still in a downward trend, it is higher than the average value of the past five years, which has a certain negative impact on the market. In the future, due to the cooling of rainfall in the United States, the demand for natural gas heating increased, but the overall inventory was high, which restrained the increase. It is expected that the U.S. natural gas market will be mainly adjusted in a narrow range.
Investment advice
At present, countries all over the world regard lithium resources as strategic mineral resources. It is very important to ensure the supply security of lithium metal minerals and establish a local supply chain. At the same time, with the continuous rise in the price of lithium concentrate, the profits of non integrated lithium salt processing enterprises are gradually thinning, and the profits have been largely moved to the resource side. A typical example is aokuang, which is highly dependent on China’s lithium salt processing plants. In the last cycle, it only earned 30% of the profits of the industrial chain, and 70% – 80% of the profits in this cycle have been transferred to aokuang, which just confirms aokuang’s expectation that the profits of this cycle and China’s lithium salt plants will open at the beginning of the year. Under the current background, the competitiveness of integrated enterprises with upstream resource guarantee and incremental resources is obviously stronger. It is recommended to pay attention to the ongoing Lijiagou spodumene mining and beneficiation project. In the future, it will join hands with Dongchuan energy investment to integrate and develop the lithium resources in Ganzi and ABA. The beneficiary targets include [ Youngy Co.Ltd(002192) ] which is promoting the 2.5 million T / a lithium ore beneficiation project in yuanyangba. The greenbushes mine will increase production in the next five years and can achieve a large output of [ Tianqi Lithium Corporation(002466) ] through OEM, In 2022 [ Qinghai Salt Lake Industry Co.Ltd(000792) ] with good performance of potash fertilizer and lithium salt is expected to be completed [ Yongxing Special Materials Technology Co.Ltd(002756) ] by the middle of this year.
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) ] and [ Cecep Wind-Power Corporation(601016) ] new energy operation power stations have benefited, and the Hong Kong stock targets have benefited from [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 not as 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.
