Recent situation of the industry
Cobalt prices are basically stable this week, lithium prices are mixed, and nickel prices have fallen. In terms of lithium, the CIF price of 6% grade spodumene in China this week is US $2840 / ton, with a weekly ratio of + 0.71%. The prices of industrial carbon, electric carbon and lithium hydrogen are 47.15,49.65 and 4795 million yuan per ton, and the weekly ratio is flat, flat and + 1.05%. For cobalt, MB standard cobalt closed at 39.00 to 39.70 US dollars per pound, with a flat weekly ratio. Domestic prices of cobalt sulfate and electric cobalt were 11.90 yuan and 540000 yuan / ton, and the weekly ratio was-0.83%, unchanged. In terms of nickel, this week LME3 closed at US $33990 per tonne, while SHFE Nickel closed at 213,000 yuan per tonne, with a weekly ratio of-0.03 per cent and-1.60 per cent. The domestic prices of ferronickel and nickel sulfate are 1630 yuan / nickel point and 496 million yuan / ton, with a weekly ratio of-1.98%.
Comment
Lithium: lithium concentrate prices are expected to accelerate in the second quarter. Allkem4 announced a sharp increase in lithium concentrate price guidelines on March 1, and the company expects the average price of lithium concentrate to be as high as $5000 per tonne (SC6%,CIF) in the second quarter of 2022, a sharp increase of about 125 per cent month-on-month. We believe that the pricing of lithium concentrate lags behind the change of lithium salt price to a certain extent, as lithium salt factories and Australian lithium mining enterprises enter the time window to negotiate the purchase price of lithium ore from the end of March to early April, following the jump in lithium salt prices in the first quarter. Lithium concentrate prices are expected to accelerate in the second quarter. We believe that the upstream lithium resources as a tight supply and demand link in the lithium industry chain, the profit distribution among the corresponding industry chains is also expected to accelerate the transfer to the upstream, in this context, enterprises with a high degree of integration of resources smelting or expected to improve are expected to benefit from the dividend of resource price increases to a greater extent.
Cobalt: cobalt prices are slowing down, we think the main reason is that international cobalt prices have slowed down, MB cobalt prices have remained basically unchanged in April, second, ternary demand has weakened under high cobalt and nickel prices, downstream is worried about falling prices, and the buying mood is not good. Third, according to Baichuan information, the import volume of cobalt intermediate products to Hong Kong in March has improved, alleviating the shortage of raw materials in the smelter. Looking forward, we still judge that the inflection point of cobalt price appears in 2Q22 or after the middle of the year, and we still need to pay attention to three points: the first is the impact of the disturbance of logistics and transportation in Africa on China's import of cobalt intermediate products, the second is the marginal change of downstream new energy vehicles and ternary demand, and the third is the repeated disturbance of the epidemic situation to the domestic cobalt salt smelting output.
Nickel: Lunni remains relatively high, but it is still separated from fundamentals. This week, Lun Nickel closed at 34000 US dollars / ton, still at a high price level. SHFE nickel price is 213,000 yuan / ton, Hulun ratio is 88%. There is still a large price gap at home and abroad. Although nickel inventories on LME+SHFE exchanges at home and abroad are still at a low level of less than 80,000 tons, we still believe that LME nickel prices deviate from the current fundamentals. First, the nickel sulfate end, Huayou 30,000 tons of high matte nickel-nickel sulfate processing production line put into production, nickel bean consumption may decline in the second half of the year, nickel sulfate prices are expected to be reduced. Second, the nickel-iron end, we expect that the Indonesian nickel-iron project will increase the production scale of about 300000 tons of metal nickel this year, and the production capacity to be put into production will be even higher, which is expected to ease the cost pressure on nickel prices. Third, Indonesia announced the domestic trade base price of nickel ore in April, due to the rapid rise in the linked LME, but in fact, the Indonesian Ferro Nickel Plant may not adopt this price guideline in the settlement, partly or continue to use the March price, or choose to consume stocks and own mines mainly.
Valuation and suggestion
1) Lithium: it is recommended to pay attention to Ganfeng lithium industry, China Mineral Resources (uncovered), Zangge Mining (uncovered), etc.; 2) Cobalt and Nickel: it is recommended to pay attention to Huayou Cobalt Industry, Shengtun Mining (uncovered), Dow Technology (uncovered), etc.
Risk
1) the production and sales of new energy vehicles are lower than expected; 2) the new supply is higher than expected; 3) the epidemic repeatedly affects supply and demand.
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