Rare earths, lithium ores and lithium iron phosphate are long-term holdings of fund institutions. They constitute the basic projects of the fund's assets and have become fixed assets. Over time, the focus on these actions will become increasingly important. higher. Rare earths currently have no stocks of one hundred yuan, Baotou, Inner Mongolia, is the rare earth capital of the world and the world's largest distributor of northern rare earths. It is only a matter of time before the 100 yuan mark is reached.
Why lithium battery-related sectors have exploded
Among lithium battery-related sectors, the lithium ore index (884785.WI) has been the most surprising recently. The index started in April and as of noon on July 21, the index had increased by 116.98% in 75 trading days. The stock that recorded the largest increase in the indiit is China Mining Resources, which increased by 192.98% during the same period. Ganfeng Lithium Industry, the two biggest leaders in the sector, rose 97.85% and Tianqi Lithium Industry rose 109.4%. The main reason is that the volume and price of lithium-related materials have increased.
⒈From the demand side, first of all, the lithium battery industry has broad market coverage, including 3C products represented by our familiar smartphones and digital cameras, the needs of construction of 5G base stations in the communication technology revolution. , and The demand for energy storage from new energy generation represented by wind and photovoltaic power generation, the demand for power batteries for new energy vehicles, the electrification of ships, the market of replacement of lead acid batteries, etc. Among them, the promotion of new energy vehiclesreceived the most attention. Domestic consumption has slowly recovered this year, but sales of new energy vehicles maintain rapid growth. Data shows that from January to June 2021, the cumulative sales of new energy vehicles amounted to 1.206 million, a year-on-year increase of 201.5%; installed capacity of electric batteries reached 52.5 GWh in June, a year-on-year increase; of 200.3%.
⒉On the supply side, take as an example the lithium salt needed to manufacture lithium batteries. In June 2021, lithium salt manufacturers are still in the passive clearance phase. According to Asian Metal data, lithium salt manufacturers' production in June 2021 (equivalent to LCE) is estimated at around 26,300 tonnes, a monthly decline of -8%, mainly affected by manufacturers' production cuts . in Jiangxi and Sichuan; the production of ternary materials is around 27,700 tons, +1.15% month-on-month, demand continues to strengthen; Finished product inventories of lithium salt manufacturers (equivalent to LCE) are estimated at around 4,000 tonnes, -40.9% month-on-month and inventory reduction continues. It is estimated that the inventory days of Chinese lithium salt manufacturers fell to 4.5 days in June, down -2.5 days month-on-month, which exceeded the lowest value of historical reference data. We see that strong demand in the lithium industry persists, but supply is limited and material inventories remain low.
Is the lithium battery industry very profitable?
Affected by the above-mentioned supply-demand relationship, upstream and downstream enterprises of the battery industry in lithium have made substantial profits. Ganfeng Lithium and Tianqi Lithium, the two companiesleaders in the upstream sector, both issued strong half-year performance guidance. The preview of the semi-annual report released by Ganfeng Lithium Industry indicates that it is expected to achieve net profit attributable to the parent company of 1.3 billion to 1.6 billion yuan, a year-on-year increase of 730 .75% to 922.46%. Tianqi Lithium Industry adjusted from its previous forecast loss of 130 million yuan to 250 million yuan to a forecast profit of 78 million yuan to 116 million yuan, turning a loss into a profit year-on-year . in the middleFor tourism, lithium batteries are the most notable.
The overall performance of the lithium battery sector has increased significantly since this year. According to wind data, the operating profit of lithium batteries in the first quarter of 2021 was 107.371 billion yuan, a year-on-year increase of 90.86%.and the net profit attributable to the parent company was 77.69 yuan, a year-on-year increase of 344.34%. The performance and profitability of the lithium battery industry have improved significantly this year.
Taking the leading lithium battery company as an example, Ningde Times achieved operating profit of 19.167 billion yuan in the first quarter of 2021, a year-on-year increase of 11.224 billion yuan, and net profit attributable to the parent company. was 1.954 billion yuan, an increase of 163.38% year-on-year; million yuan, a year-on-year increase of 156.22%.