Non-ferrous industry: supply may continue to be lower than expected, lithium resources are expected to maintain a high prosperity for a long time – yqqlm

　　Lithium: The largest lithium mine project in Europe was aborted, and the lithium supply side was disrupted by regeneration.1) The three major lithium resource countries in South America are discussing the establishment of a lithium producer organization, and the supply pattern may be further optimized. According to the Rio Times, Argentina, Bolivia and Chile are discussing the creation of an organization of lithium producers similar to the Organization of the Petroleum Exporting Countries. According to USGS, in 2020, Argentina, Bolivia and Chile will account for about 60% of the global lithium resources; Argentina and Chile will account for 30% of the production. We believe that if the Lithium Producer Organization’s vision is truly implemented: on the one hand, the concentration of lithium supply will be greatly improved, and the industry structure is expected to be further optimized; on the other hand, under the guidance of the government, corporate behavior will be more rational, and lithium prices will be more stable. . In other words, the “lower limit” of lithium prices may rise significantly, and the past boom and bust situation is difficult to reproduce, and the high level sustainability is expected to increase; 2) Serbia announced its rejection of the Jadar lithium mine project, and the development of global lithium resources is hindered and long. This week, the Serbian government halted Rio Tinto’s Jadar lithium mine for political and environmental reasons. Jadar is Europe’s largest greenfield lithium project, according to Rio Tintoannouncement, the lithium oxide resource of the project reaches 2.48 million tons (equivalent to 6.12 million tons of LCE, the volume is close to the Australian mine Pilbara), the original planned annual outputBatteryGrade lithium carbonate 58,000 tons. At present, some opinions in the market believe that the development of lithium mines is easy. As some greenfield projects start construction one after another, the lithium industry may return to a surplus state in the short term. The miscarriage of the Jadar lithium mine project just falsifies this view. In fact, the development cycle of lithium mines is usually around 3-5 years. Considering factors such as policies, environmental protection and process matching, the actual development time will be further For example, mature mines such as Mt Cattlin and Mt Marion have experienced 7-8 years from the start of construction to stable production. Therefore, we believe that the increments that new projects can provide in the short and medium term may be very limited, and the new lithium supply in the next few years will be difficult to match the annual demand growth of 100,000 to 250,000 tons of LCE+. The contradiction between supply and demand in the industry may exist for a long time. “Long-term high prosperity of lithium resources. Related targets:Rongjie shares、Made by Kodak、Shengxin Lithium Energy、Tianqi Lithium Industry、Yahua Group、Jiangte Motor、Ganfeng Lithium Industry、Yongxing Materials, Zangge Holdings,Tianhua ultra clean、China Mining Resources、Tibet Mining、Tibet City InvestmentWait.

Rare earths: Tight supply and demand are expected to exist for a long time, and the continuous strengthening of new energy attributes is expected to promote the reconstruction of the rare earth valuation system. 1) In the short term, tight supply and demand will support rare earth prices to remain high. ① On the supply side, as the Spring Festival is approaching, some small scrap factories have stopped production and some metal factories have declined due to insufficient raw materials; ② On the demand side, the demand for replenishment of downstream orders has improved. ③In terms of inventory, according to Baichuan Information, this week, the inventory of praseodymium and neodymium oxide continued to decrease by 3.6% month-on-month to 2,400 tons. Weak supply and low inventory make it difficult to alleviate the contradiction between supply and demand in the short term. Considering that domestic indicators are expected to release restraint, overseas production capacity is close to full production, and it is expected that supply will remain tight throughout 2022, supporting rare earth prices to remain high. 2) In the long run, rare earths are at the starting point of a new era of supply and demand reshaping, and the valuation system is restructured. In the future, rare earths are expected to replicate the historical logic of high demand for lithium-cobalt new energy, and its supply side is even better than lithium-cobalt. With the upward movement of the price center, companies may continue to realize high profits and grasp the core of global pricing power. Asset Price Revaluation Opportunities. Related targets:Northern Rare Earth、Minmetals Rare Earth、Baotou Steel Co., Ltd.、Shenghe Resources、Xiamen Tungsten IndustryWait.

Risk warning: supply exceeding expectations risk, demand less than expected risk, policy change risk.

(Article Source:Northeast Securitiesgraduate School)

Article source: Northeast Securities Research Institute

Responsible editor: 26

Original title:[Northeast Nonferrous Zeng Zhiqin]Industry Weekly Report: Supply may continue to be lower than expected, and lithium resources are expected to maintain a high prosperity for a long time