Pilbara downgrades 2022 production guidelines Lithium prices are expected to remain high next year [Agency Review]

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In November, the production and sales of new energy vehicles both exceeded 450000, and the demand for lithium salt continued to increase.

In November, China's production and sales of new energy vehicles reached 457000 and 450000 respectively, an increase of 1.3 times and 1.2 times respectively over the same period last year. Among them, the market penetration rate of new energy vehicles in November was 17.8%, and the market penetration rate of new energy passenger vehicles reached 19.5%. From January to November, the production and sales of new energy vehicles completed 3.023 million and 2.99 million respectively, an increase of 1.7 times over the same period last year. The market penetration rate reached 12.7%. The production and sales data of new energy vehicles in China continued to improve in November, and the hot downstream demand for new energy will continue to drive the demand for lithium salt.

Pilbara lowered its 22-year production guidelines, and lithium price is expected to remain high in 22 years.

This week, the 22-year-02 contract for lithium carbonate has risen to 293500. In the short term, the demand for ternary materials and downstream products such as lithium iron phosphate is high, and the demand for orders is positive, and the superimposed terminal new energy vehicles are on the rise. On the other hand, power restrictions in various areas on the supply side and gas restrictions in the heating season in Qinghai have a significant impact on lithium carbonate production. Pilbara, one of the core supply increments next year, lowered its production guidance this week, including 1) the 21-year Q4 production guidance was lowered to 8.5-95000 tons of concentrate. (the original plan is 9-115000 tons of concentrate) 2) the production guidelines for the fiscal year 22 of Pilabra (46-510000 tons of concentrate originally planned) have been lowered to 40-450000 tons of concentrate. The supply and demand of lithium salt continues to be tight, and the price of lithium is expected to remain high for 22 years. Short-term suggestions: Tianqi Lithium Industry, Yongxing Materials, Yahua Group and so on.

More attention should be paid to performance cashing and price persistence than to the surge of short-term lithium prices.

At present, lithium prices continue to rise while the performance of the secondary market is weak. As we report the Tianfeng Q & A series: why the upstream lithium plate continues to deviate from the fundamentals, looking back on the previous cycle of lithium prices, stock prices also deviated from the fundamentals in the previous cycle, and the 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. And we believe that as the demand of the new energy industry continues to improve next year, the lithium price center will remain high for the whole of 22 years. 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, which is the logic that we have always mentioned that the lithium plate is "moving volume" rather than "moving price" in the long term. In the dark moment, we are still firmly optimistic about the allocation value of lithium plate next year.

Recently, the price of cobalt has reached a new high of the year.

Recently, the price of cobalt at home and abroad has continued to rise, and the average domestic price of cobalt has reached 430000 / ton, which has reached a new high for the year. The reasons are as follows: 1. The demand for cobalt is driven by the sustained high growth of global production and sales of new energy vehicles on the demand side; 2. The continuing epidemic in Africa on the supply side and the chaos in international shipping have led to a continuous decline in imports of cobalt raw materials. As of October, imports of cobalt intermediates totaled 665 million metal tons, an increase of 5%, but imports of 5200 metal tons in October, down 44% from a year earlier and 30% from the previous year, and supply-side disturbances are intensifying.

There are more than a thousand confirmed cases in South Africa in a single day, and the cobalt supply chain may face the risk of disruption again.

On November 26, mutated strains were found in South Africa, with more than 1,000 confirmed cases in a single day, and a number of countries have restricted the entry of South African personnel. South Africa, the largest transit place for cobalt transport in Africa, has been closed for 20 years because of the outbreak. If the new mutation is not effectively controlled in South Africa, the cobalt supply chain may once again face the risk of disruption. Looking forward to the future, the end of the year is the downstream battery factory centralized stock period, the shortage of raw materials may be further magnified, cobalt prices are expected to continue to hit a new high. Suggested attention: Huayou Cobalt Industry, Hanrui Cobalt Industry, Shengtun Mining and so on.

Risk hints: the risk of demand picking up less than expected, the risk of a sharp increase in upstream supply, the risk of repeated epidemics, and the risk of a substantial increase in inventory.