Lithium resources stocks rise and stop the contradiction between supply and demand aggravate next year's plate boom can be sustainable?

Today (December 28), the salt lake lithium extraction plate strengthened sharply, and by the close, the plate index was up more than 6%. In terms of individual stocks, Wharton Technology, Mount Qomolangma, National Machinery General Motors, Zhaoxin shares, Jinyuan shares, Zangge Mining, Tibet City Investment rose by the daily limit, Tibet Mining and Lanxiao Science and Technology rose more than 9 percent. Tianqi Lithium Industry, Salt Lake shares, Koda Manufacturing, Jiuwu Hi-Tech, Ganfeng Lithium Industry and other stocks rose among the top gainers.

The contradiction between supply and demand continues to intensify, and lithium prices are expected to continue to rise.

Since the beginning of this year, thanks to tight supply and strong demand, lithium prices have continued to rise, with the average price of), SMM lithium carbonate (99.5% battery grade / domestic) reaching 264000 yuan / ton as of December 28th. According to recent reports, some lithium enterprises have received quotations of 300000 yuan per ton of lithium salt. in addition, driven by downstream demand, the supply of lithium salt is insufficient, and upstream enterprises basically do not carry out long orders. Some lithium salt companies predict that the concentrate will usher in the most critical moment next year.

Huaan Securities pointed out that the supply-side salt lake seasonal production reduction, smelting capacity release is also subject to ore, short-and medium-term global supply increment; but the demand-side lithium power production increases month by month, battery factories and mid-stream material plants prepare goods before the year, at the same time, the middle and lower reaches expand production and scale to enlarge the demand for upstream. Inventory in all sides of the industry is low, the contradiction between supply and demand intensifies, spot prices accelerate, contract prices of large factories rise month by month, bulk prices jump, and lithium prices remain high under the support of supply and demand.

Lithium prices continue to rise, lithium resources companies are expected to benefit. Cinda Securities pointed out that it is expected that as the sales of new energy vehicles continue to heat up in the peak season, the stock boom at the end of the year and the continuing shortage of resources supply, lithium prices will maintain an accelerated upward trend, while supply and demand of lithium resources are expected to remain in a state of shortage in 2022, and lithium resources supply may become the biggest deficiency in the lithium industry chain, and lithium resources enterprises will face a revaluation. It is suggested to focus on undervalued enterprises or enterprises with marginal growth of lithium resources that are rich in lithium reserves and benefit from rising lithium prices.

The performance of the secondary market is weak, focusing on shifting from price increases to performance.

Although lithium prices continue to refresh their highs, the lithium resources sector has not performed well recently and has been in shock since December. As of the close today (December 28), the sector index has fallen nearly 0.97% this month, and most stocks have gone green. According to the rise and fall of this month, Tibet Mining, Mount Qomolangma, Tibet City Investment and Tianqi Lithium Industry have all dropped more than 10%, but some stocks have performed well. Tibetan mining rose nearly 37%, and Salt Lake shares rose nearly 17%.

Tianfeng Securities believes that lithium prices continue to rise and the secondary market performance is weak, just like the previous cycle of lithium prices, share prices and fundamentals also deviated in the previous cycle, performance is more critical. At the same time, the market is worried that the lithium sector is still biased towards cyclical attributes, high prices are difficult to maintain, and earnings at the top of the cycle cannot be valued. As the demand of the new energy industry continues to improve next year, the lithium price center will remain high throughout 2022. When the market sees that the price of lithium salt remains strong and gradually forms a consistent expectation on the price, it will focus on the performance improvement brought about by the expansion of its own alpha. The long-term logic of the lithium plate is "moving volume" rather than "moving price".

In addition, the rise in lithium prices has caused market panic, worried that lithium has become a bottleneck in the development of the electric vehicle industry. Citic Securities pointed out that concerns about the rapid rise in lithium prices and the "insufficient supply of lithium" have led to a significant adjustment in the lithium sector. The new global supply of lithium can meet the growth of downstream demand in 2022, and lithium will not become a hard constraint on the development of the electric vehicle industry. Restricted by the mineral resources development cycle, lithium is expected to become one of the most sustainable links in the power battery industry chain. At the same time, it is expected that the catalyst and rising power of the plate will shift from "price increase" to "performance". Lithium plate has a strong valuation advantage and allocation value in 2022.

Looking forward to the lithium resources plate market, Huaxi Securities believes that under the current background, the integrated enterprises with the guarantee of upstream resources and the increment of resources are obviously more competitive. It is recommended to pay attention to the Lijiagou lithium pyroxene mining project under construction. In the future, it will join hands with the major shareholder Chuan Neng to integrate Sichuan Energy Power for the development of lithium ore resources in Ganzi and Aba Prefecture. The beneficiaries include Rongjie shares that are promoting the 2.5 million t / a lithium ore selection project in Yuanyang Dam, Tianqi Lithium Industry, which has been increasing production and can achieve production through OEM in the next five years, and Salt Lake shares with excellent potash and lithium performance in 2022. It is expected that Yongxing materials will be selected and expanded in Huashan, Zhongbai City next year.