Financial Services Association, April 22 (Reporter Zhou Xiaoya) Since this year, the solid-state battery concept has ignited the market's enthusiasm for a new round of investment in the new energy sector, and the price performance of lithium carbonate futures has continued to receive market attention.

How to seize future investment opportunities around the new energy sector? On April 20, at the “Corporate Risk Management Conference in the Context of New Energy and Dual Carbon” jointly organized by the School of Economics and Management of the University of Hong Kong and Minmetals Futures, guests such as Guo Chenguang, representative of the commodity division of the Guangzhou Futures Exchange, Huang Shanyan, assistant director of the Minmetals Securities Research Institute and head of new energy, and Zeng Yuke, a lithium carbonate researcher at Minmetals Futures, put forward their views deep into the new energy industry chain.

In their view, the lithium carbonate market pattern continues to exceed supply and demand, and the impact of policies on the demand side is worth paying attention to. A new round of power grid reform will spawn a new direction of investment in the new energy sector. From the perspective of enterprise risk management, a sound risk management system can help enterprises withstand the impact of market fluctuations, and use derivatives such as futures and options for risk management, which will help enterprises achieve smooth operation.

Will lithium carbonate futures weaken in the future?

Since this year, lithium carbonate futures prices have rebounded after hitting a low of 92,400 yuan, and are currently hovering above the 100,000 yuan mark. Subsequent lithium carbonate market trends have also received market attention.

Zeng Yuke, a lithium carbonate researcher at Minmetals Futures, mentioned that from the supply side, lithium prices experienced a steep decline in 2023, but resource-side South American salt lake, African, and domestic hard rock projects will still contribute strong increases (+47%) in 2024. Mining companies currently have abundant cash flow, and sales prices are close to cost and are determined to stop production. Underlying cost support is strong. Note that the phased shutdown of high-cost mines disrupts market sentiment and drives lithium prices to rebound.

Looking at the demand side, he believes that the previous rebound in lithium carbonate prices was mainly based on fluctuations in upstream production discontinuation on the supply side, and looking ahead to subsequent market conditions, the market is looking forward to the impact of the policy on the demand side of the market.

He analyzed that in 2024, in the context of favorable domestic policies and the automobile price war, demand for lithium batteries in the terminal market is expected to increase by 27%, higher than the forecast at the beginning of the year (15% to 20%). Among them, it is worth noting that the automobile price war boosts sales of new energy vehicles and that the electricity policy stimulates energy storage installations.

Overall, he believes that lithium carbonate continues the market pattern where supply exceeds demand. “Based on the sales price of 100,000 yuan per ton of lithium carbonate, the annual surplus exceeds 200,000 tons. The supply-side is more flexible, and lithium prices are under pressure above. The lower price limit is strongly supported, making it difficult to reach the low point of lithium prices in the previous cycle. It is expected that lithium prices will fluctuate in a range and bottom out.”

From the perspective of futures hedging, he suggested that lithium prices weaken to an appropriate low level. Buyers could consider holding stocks through market positions, and when the market pulls back, sellers seize shipping timing and lock in profits.

In fact, since it went public on July 21 last year, the operation of lithium carbonate futures has continued to receive attention. Guo Chenguang, representative of the commodity division of the Guangzhou Stock Exchange, mentioned that since lithium carbonate futures were listed, market trading has been active, the scale has increased steadily, the investor structure has gradually matured, and price influence has continued to increase, and it has become an important reference for enterprises to trade.

He stressed that industrial enterprises should adhere to the principle of “one look, two tests, three participation”, focus on rebuilding the system, controlling risks, and making a good combination of time and present, and investors should deepen industry research and participate rationally in the market.

What are the future investment opportunities for the new energy industry?

Since this year, the stock market has experienced a wave of “solid-state battery” concept stocks rising and falling, and this new investment hotspot in the new energy industry has attracted market attention.

Will “solid-state batteries” be the starter for a new round of market in the new energy sector? Huang Shanyan, assistant director of the Minmetals Securities Research Institute and head of new energy sources, believes that the reason why concepts such as “solid state batteries” and “low-altitude economy” are popular in the market is that the popularity of capital investment in the new energy industry has not abated, and no new innovation points have appeared in the industry, so even a small breakthrough can attract countless capital investments.

In her view, a green economy based on new energy sources is an important means of China's economic development transformation. Therefore, in the long run, China's new energy still has broad prospects for development. Currently, there are still structural contradictions in China's new energy industry, but it is precisely structural conflicts that have led to the creation of a new production chain, and the new energy industry has great opportunities for industrial investment.

Focusing on the trend of development and differentiation of the new energy industry, Huang Shanyan believes that from the power generation side, photovoltaics and wind power are still important carriers of renewable energy. The upgrading and iteration of photovoltaic technology still has certain investment opportunities. Offshore wind power is developing rapidly, and there are many investment possibilities in the future.

From the transmission side, she said that subsequent progress in power grid reform is worth watching. “In fact, the power grid is an 'highway in the air' for power transmission. China's renewable energy generation and regional imbalance on the electricity consumption side places higher demands on UHV allocation, but regional geographical protection will also have certain bottlenecks, and strong support from national policies is needed to break the existing imbalance.”

Data shows that since the “dual carbon” target was proposed in 2020, the compound annual growth rate of China's power grid investment was only 1.1%, far lower than the 31.9% compound growth rate of power supply investment. As the proportion of installed wind and light continues to grow, power grid construction lags significantly behind power supply construction, and the pressure to consume new energy will gradually become apparent.

According to Huang Shanyan, in the future, under the new wave of reform of the State Grid, enterprises in the field of inverters and other fields related to power grid investment will enjoy great benefits, which will also lead to new investment directions in the new energy sector.

From the electricity consumption side, as the share of new energy sources in the region increases, power grid conflicts have become more prominent, spawning opportunities for smart grids and virtual power plants. Industrial and commercial energy storage and power side energy storage grid-side energy storage will rapidly enter a period of explosion. The lithium battery NEV industry enters a mature period after the industry, and the entry barriers for future innovator projects will become even higher. However, it is still difficult to make a fundamental breakthrough in the development of fuel cells in the short term.