This article is edited by Minsheng Securities "Copper-Aluminum-Gold Resonance, Lithium Cobalt Dance-- Investment Strategy of Nonferrous Industry in 2021" and China Merchants's "cycle as Friends Series: dollar cycle and Commodity prices"

On Monday, the whole industrial chain of new energy vehicles broke out, from the upstream Ganfeng Lithium AH shares both broke the top, to the middle Ningde era rose 12% to a record high, and then to the downstream BYD and Great Wall Motor have soared.. Among these big gains, the fiercest one is Ganfeng Lithium H shares, which has risen more than three times a year.

High growth of new energy is determined.

In China, with the resumption of work and production in the second half of the year, the output and loading of power batteries have increased steadily.From July to October, the production and sales of new energy vehicles continued to rise compared with the same period last year, and the production and sales of new energy vehicles increased by 43.3% and 57.8% respectively compared with the same period last year. Power battery production and installed capacity also increased month by month, with a 45% increase in monthly power battery loading in October compared with the same period last year. Battery production data continued to improve in the second half of the year, and the demand for power batteries is expected to continue to expand next year.

The output of lithium iron phosphate in November was 18620 tons, an increase of 127.38% over the same period last year.. Since July, lithium iron phosphate production began to increase greatly, mainly BYD blade batteries and Ningde era CTP lithium iron phosphate batteries gradually entered the market, after October, including Wuling Hongguang and other lithium iron phosphate models sold significantly boosted the demand for lithium iron phosphate, the proportion of lithium iron phosphate batteries increased, and the output continued to rise. At present, the inventory of lithium iron phosphate is low, the production of lithium iron phosphate is expected to remain high, and the demand for lithium carbonate is expected to remain tight.

Internationally, the European new energy recovery plan continues to advance, French and German subsidies have been upgraded for the second time, and the layout of new energy by major European automobile companies has accelerated.At the same time, the global mainstream car companies will continue to release a number of electric models in 2021 (optimistic about Volkswagen ID series and Tesla, Inc. Model Y sales gradually), Europe and the United States have a strong certainty of new energy release. In October, the number of registered electric vehicles in Europe exceeded 147000, an increase of 206.25% over the same period last year, and the permeability reached 12%. It is optimistic that the volume of new energy will continue to be released and the permeability will continue to rise.

The supply of lithium concentrate continues to contract and the price center moves up.

After Australian lithium mining company Altura was acquired by Pilbara in December, there are only four mines in stable operation in Australia. Marion is fully underwritten to Ganfeng Lithium, while Talison mines are sold to Tianqi Lithium and Albemarle. After Altura was bought and shut down by Pilbara, Cattlin and Pilbara became the only companies that could sell lithium concentrate to the outside world.

Among them, the main sales customers of Cattlin are Ya Hua Group, Shengxin Lithium Energy and so on. Pilbara's main sales customers are Ronghui Lithium Industry, Tianyi Lithium Industry, Ganfeng Lithium, Great Wall Motor and so on. The supply of concentrate will shrink obviously in the future.

In 2020, the lowest price of industrial-grade lithium carbonate fell to 3520 yuan / ton, and the price of battery-grade lithium carbonate fell to 42500 yuan / ton. By the beginning of December, the average price of industrial-grade lithium carbonate had rebounded to 45950 yuan / ton, an increase of 26.76%, while the price of battery-grade lithium carbonate had rebounded to 48200 yuan / ton, an increase of 16.14%. The current lithium carbonate inventory has fallen to a low level and lithium carbonate prices are expected to continue to rise against the backdrop of cost support (upward lithium concentrate prices) and a rebound in demand.

The dollar entered a weak cycle, assisting a nine-year bull market in commodities

Lithium ore is a commodity, and the performance of commodities is closely related to the dollar.

Historically, there has been a negative correlation between the dollar and commodity prices (CRB spot index), the so-called "seesaw" effect. China Merchants believes that this is not as simple as the "pricing effect", but behind the dollar cycle falling (rising) → global credit expansion (contraction) → global aggregate demand expansion (contraction) → on commodity demand expansion (contraction) economic fundamental logic.

China Merchants believes that the dollar index has a period of 16 to 18 years and has the attribute of financial cycle. Driven by the Fed's unlimited quantitative easing monetary policy, the dollar will enter a weak cycle of nearly nine years from 2020.

The dollar is weak and commodities are stronger. China Merchants judged that starting from 2020, there will be a nine-year commodity bull market, in which with the adjustment of the inventory cycle, commodity prices will have ups and downs, but the high point of prices is expected to rise step by step.

Summary

The whole new energy vehicle industry chain is currently in a high boom, while the upstream "lithium mining stocks" continue to benefit from the development of the industrial chain, and benefit from the "weak dollar". May be able to become the Xinyuan car industry chain of many "Daniel" target "lie down to win".