Cycle study: lithium prices continue to rise
This week, the price of gold rose 3.0%, silver rose 6.7%, and the ratio of gold to silver returned to 78.6. Lithium carbonate demand continues to be hot, some southwest manufacturers of 2021Q1 lithium price has been raised to 50, 000 yuan / ton. With the US election on the ground, the market is optimistic about the subsequent fiscal policy boost and re-inflationary trading, while domestic demand continues to be strong, which is good for commodities such as gold / copper / aluminum.
Don't worry about small fluctuations in metal prices.
Aluminum: a small amount of electrolytic aluminum last week. Our point of view: we believe that this round of aluminum price rally has solid fundamental support: under the influence of the epidemic, domestic consumption is much higher than expected as the main driving factor, and domestic consumption is still strong in the future. Although 2021Q1 is about to enter the off-season to form a cumulative pool, the rate of inventory accumulation may be lower than expected, which does not affect the strength of aluminum prices. From January to October 2020, aluminum supply was obviously released under the stimulus of high profits (+ 4%), and aluminum exports decreased significantly (- 10%), but domestic social inventory has been low, which proves that domestic consumption is extremely strong and aluminum consumption is much higher than expected. According to our estimates, aluminum consumption will grow by 12% year-on-year in 2020 (almost no growth in 2019), exceeding market expectations in an all-round way.
Copper and zinc: production at the Chilean / Peruvian copper mine has not returned to pre-epidemic levels after the outbreak, and the strike continues. Vaccine landing market began to trade recovery expectations, copper mine capital expenditure during the epidemic will continue to shrink, 2021 may encounter a mismatch between supply and demand, continue to be bullish on copper and aluminum. Overweight rating: Zijin Mining Co., Ltd., Yunnan Aluminum Co., Ltd., Shenhuo Co., Ltd., Chinalco, etc.
The price of lithium carbonate continues to rise.
Lithium carbonate prices continued to rise to 42600 yuan / ton this week, Australian mine supply began to tighten after the bankruptcy of Altura, superimposed Tianqi part of the production capacity could not be guaranteed, and the electric car industry exceeded expectations. The production and sales of new energy vehicle companies continued to be strong in November. This electric car cycle may be driven by high-end consumer demand, we can see that domestic Xiaopeng / ideal / Weilai and other new power manufacturers have exceeded expectations in the third quarter. The demand for lithium carbonate is expected to reach about 400000 tons in 2021, and lithium prices may begin to rise slowly. Cobalt shou storage is of great strategic significance: 80 per cent of the global supply of cobalt comes from the Democratic Republic of the Congo, smelting capacity is almost concentrated in China, while China imports 90 per cent of its cobalt. Therefore, for China, a country with scarce cobalt resources, shou storage as a national strategic reserve is of absolute significance. From the perspective of the supply pattern of cobalt, the concentration of the lithium and cobalt industry is high, and the growth certainty of the leading companies is strong; it is estimated that in the next five years, the demand of the lithium salt industry will grow at a compound growth rate of 23%, and the demand for lithium hydroxide will grow at a compound annual growth rate of 40%. The compound growth rate of cobalt industry demand is more than 10%, maintaining the lithium-cobalt industry Overweight rating: Huayou Cobalt Industry, Ganfeng Lithium Industry, beneficiary targets: Hanrui Cobalt Industry, Ya Hua Group, etc.
Risk hint: the macro economy continues to be much lower than expected, and the production capacity of electrolytic aluminum is accelerated.
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