Upstream lithium raw materials
The prosperity of the global new energy industry continues to rise, the domestic and European electric vehicle market resonates, and the upward trend of upstream raw material prices continues to strengthen:
1. The demand boom continues to rise. 1) in February 2021, the production and sales of new energy vehicles completed 124000 and 110000 respectively, down 36.2% and 38.8% respectively from the previous month, an increase of 7.2% and 5.8% respectively over the same period last year; 2) sales of new energy vehicles in five European countries (Britain, France, Germany, Norway and Sweden) totaled 74100 units in January, an increase of 31% over the same period last year; 3) Volkswagen held its first Power Day, on March 15. It is expected that six superbattery factories will be built in Europe in 2030, and the total production capacity will reach the year of 240GW/. 4) in terms of 3C consumption, in February 2020, the domestic mobile phone market shipped 21.759 million units, an increase of 241% over the same period last year, of which 15.071 million 5G phones were shipped, accounting for 69.3% of mobile phone shipments in the same period. In the first quarter of 21, the orders of domestic head battery enterprises are expected to exceed Q4 in 2020, and the production schedule of the industrial chain will continue to increase.
2. The rising cycle of lithium carbonate begins. Industrial-grade lithium carbonate is up 1.2% this week, and battery-grade lithium carbonate is up 1.8%. 1) the downstream began to purchase and stock the raw materials from March to May, while the overhaul of large factories led to a decline in production, the domestic supply of battery-grade lithium carbonate was relatively tight, and the orders of large factories were full, and there was no surplus inventory for sale. The price will further accelerate; 2) the price difference between battery-grade lithium carbonate and battery-grade lithium hydroxide will expand to 16100 yuan / ton, and the upward trend of lithium carbonate price will be transmitted to lithium hydroxide. 3) Lithium concentrate inventory in Western Australia mines has been accelerated. The output of lithium concentrate in 2020Q4 Australia's main mines is 213200 dry tons, sales volume is 222400 dry tons, inventory has dropped by 9289 dry tons, lithium salt plant profits have been repaired, and lithium concentrate prices may accelerate.
3. The upward direction of cobalt price remains unchanged. This week, MB standard cobalt prices fell 5.5 per cent, while domestic metal cobalt and cobalt sulfate prices fell 2.5 per cent and 8.8 per cent, respectively. 1) the shortage of raw materials is expected to ease in the second quarter, the overall wait-and-see mood downstream is relatively strong, the signing of orders of some downstream enterprises slows down, and cobalt prices are under short-term pressure; 2) from the point of view of the lengthening cycle, the demand side of the downstream continues to improve, driven by popular models, the output of new energy vehicles continues to be high, and orders for cobalt tetroxide also increase slightly. Overseas magnetic materials, catalysts, electronics and other industries have signs of recovery one after another, overseas traders have increased procurement, cobalt prices have not changed the upward direction.
4. Rare earths and permanent magnets have entered the stage of "simultaneous rise in quantity and price". On the supply side, the Ministry of Industry and Information Technology released the first batch of rare earth total control targets in 2021, an increase of 18000 tons of REO, and about 3200 tons of praseodymium and neodymium oxide over 2020. On the demand side, the green economy, mainly new energy vehicles, frequency conversion home appliances and wind power, continues to grow, driving praseodymium-neodymium oxide in short supply, and prices continue to rise. Domestic praseodymium-neodymium oxide rose 2.3% this week compared with last week. NdFeB N35 blank quotation is the same as last week, praseodymium-neodymium oxide inventory decreased by 72 tons. NdFeB magnets as the "shadow" downstream of the rare earth plate, with the "raw material inventory-gross margin pricing" model, directly benefit from the upward price of rare earths.
5. The medium-and long-term industrial trend is more clear: 2019-2020 as the starting point, upstream materials such as cobalt, lithium, copper foil, aluminum foil and magnetic materials will enter the upstream of prosperity for 3 years. In particular, with the development of overseas new energy vehicles, the status of leading enterprises in the industrial chain is becoming more and more important, and the leading premium will become more and more obvious.
Investment advice: maintain the "overweight" rating of the industry
1. The upstream raw materials of new energy, such as lithium, cobalt and rare earths, etc., the supply and demand structure supports the three-year business cycle; the valuation moves down in the short term due to systemic risks, but profits bring another layout opportunity.
2. For basic metals, under the policy expectations of dual control assessment and carbon neutrality, there are expectations of supply contraction and overall cost curve rise in high energy-consuming industries. In addition, the domestic social finance data exceeded expectations in February and the United States formally passed the 1.9 trillion stimulus policy. The basic metals will not change in the short term. The micro level maintains a high boom, but US bond yields rise rapidly or suppress interest rate-sensitive terminal demand, closely tracking changes in replenishment and macro policies at home and abroad.
Third, the core target
1) New energy vehicle industry chain: Ganfeng Lithium Industry, Tianqi Lithium Industry, Huayou Cobalt Industry, Hanrui Cobalt Industry, Luoyang Molybdenum Industry, Yahua Group, Northern rare Earth, Shenghe Resources, Zhenhai Magnetic Materials, Jinli permanent Magnet, etc.
2) basic metals: Zijin Mining, Yunnan Aluminum Co., Ltd., Shenhuo Co., Ltd., Tianshan Aluminum Industry, Suotong Development, etc.
3) Precious metals: Shandong gold, Chifeng gold, Shengda resources, etc.
IV. Risk hints
The risk of policy fluctuation such as macroeconomic fluctuation, import and environmental protection, the fluctuation risk of gold price, the lower-than-expected risk of new energy vehicle sales, the premise assumption of industry supply and demand measurement is lower than the expected risk, etc.
