Pay attention to investment opportunities brought by negative electrode graphitization shortage

Pay attention to investment opportunities brought by negative electrode graphitization shortage

The demand of the electric vehicle industry continues to burst, and the shortage of the supply chain is becoming more and more prominent. Graphitization, as a key link of the negative pole, is also affected by the double-control policy. The graphite electrodes we can supply. The recent price rise has attracted market attention. As for the background of graphitization price rise and the possible impact, we summarize:

1. Graphitization has been in short supply since 2020 Q4, mainly due to high demand and double-control production restriction

Graphitization is mainly used for artificial graphite negative electrode and graphite electrode (electric arc furnace steelmaking). In the past, the output of negative electrode was relatively low, and it was mainly outsourced to the graphite electrode supply chain, so the linkage between supply and demand and price is strong. In 2017, the iron and steel industry banned floor steel and switched to electric arc furnace steel making, which significantly boosted the graphitization demand and realized the continuous growth from 2017 to 2018.

However, with the increase of the scale of the negative industry, the graphitization of the negative electrode is turned into independent production (theoretically, the graphitization capacity of iron and steel can be turned into the graphitization of the negative electrode, but first, the demand of the steel chain is relatively good and the supply is in short supply; Second, the economy of iron and steel scheme to negative electrode is not good, there is the cost of conversion, and it is not the best choice of the industrial chain), which is more affected by the supply and demand of this link. The price of negative electrode graphitization will gradually drop after 2019 and drop to the level of 13,000-15,000/ton by the end of 2020. Since 2020 Q4, the graphitization price has bottomed out and rebounded, basically reaching 15,000-18,000/T in 2021 H1, and the contract price of graphitization of artificial negative electrode in 2021 Q3 has risen to about 21,000/T, with the highest price exceeding 23,000/T.

The domestic negative electrode graphitization capacity will be maintained at about 700,000 tons from 2019 to 2020, and the domestic negative electrode output will reach 160,000-170,000 tons in 2021Q2 (considering the man-made proportion, the quarterly output is expected to be about 140,000 tons, with an annual output of 550,000-600,000 tons). There is no gap in itself. However, under the double-control policy of national energy consumption, the capacity of Inner Mongolia has shrunk. According to the data, more than 40% of the domestic graphitization capacity is distributed in Inner Mongolia, while the impact of power and production restriction in Inner Mongolia ranges from 15% to 30%, which affects about 100,000 tons of graphitization capacity. Thus forming a phased shortage of graphitized production in 2021 Q2. And in 2021 Q3, the industry boom in the context of the sequential rise further aggravate the shortage.

2. The negative electrode enterprise self-built graphitization is the general trend, but it can evaluate the progress of power shortage

Negative electrode enterprises have a clear trend of increasing the independent supporting of graphite. Even without the factors of graphitization price increase and energy consumption constraints, negative electrode enterprises have also increased the capacity planning of graphitization and the improvement of self-sufficiency rate due to the demands of supply chain stability and comprehensive cost reduction.

However, under the background of double-control, the progress of graphitization construction is restricted, which is reflected in: 

1) the energy evaluation of new projects needs the approval of provincial governments, and the project approval cycle is prolonged; 

2)  The completed project may be delayed due to the local power supply. 

Generally speaking, the expansion and construction in progress projects have obtained energy evaluation indicators, and even if there is a lag in reaching production, it is only phased; The energy evaluation of new projects really depends on the local energy evaluation indicators, but the industry quality enterprises have been in advance of the position of the layout.

At present, the newly added graphitization capacity of listed companies includes: 1) Putalai Inner Mongolia Phase II 50,000 tons (2021 Q3 has been completed, has not yet reached production capacity, expansion project), Sichuan 200,000 tons integration (phase I 100,000 tons, originally planned 2022 H2 production capacity, new project); 2) Shanshan Co., Ltd. has 52,000 tons in Inner Mongolia Phase II (completed at the end of 21st, expansion project), and 200,000 tons in Sichuan integrated base (Phase I 100,000 tons, new project); 3) Zhongke Electric Guizhou Great 45,000 tons (2022 Q1 production capacity, expansion project), Sichuan Jineng 15,000 tons (2022 Q1 production capacity, expansion project); 4) Baterui (man-made accounts for 50-60%, and the rest are natural without graphitization), 40,000 tons in Shandong (planned to reach production in 2022 years, new projects), 20,000 tons in Sichuan (planned to reach production in 2022 years, new projects), and 50,000 tons of graphitization jointly invested with Fuan will be solved by Fuan.

On the whole, since it is difficult to estimate the graphitization outsourcing capacity, we have counted the self-owned capacity of the head enterprises and measured the self-owned capacity gap. It can be seen that the graphitization that needs outsourcing has increased since 2020 H2, and will remain high from 2021 H2 to 2022 H2. If the planned production capacity is less than expected, the gap may widen.

3. The shortage of the total amount of graphitization industry has a positive impact on the profits of the leading negative listed companies, and relevant targets continue to be recommended

Previously, based on the production expansion plan of negative electrode enterprises, the market is expected to face certain price reduction pressure in 2022, and the unit profit may narrow. However, the current shortage of graphitization has become a common problem faced by the industry, and the price of terminal cathode products is likely to remain stable or even rise (some customers have realized product price adjustment from July to August). For companies with high graphitization self-sufficiency rate, the profit outlook is more positive.

From the perspective of specific companies

1) Putailai is the company with the highest graphitization self-sufficiency rate in the whole market, which is 60% in 2021 H1. After the second phase of Inner Mongolia is completed, it is expected to reach about 80% by the end of the year. After the Sichuan base successfully reaches production in 2022, it is expected to achieve self-sufficiency rate throughout the year. Therefore, the company's single ton profit (including graphitization) of negative electrode in 2022 is expected to remain at the level of 12,000-13,000 yuan in 2021 H1 (previously estimated 11,000-12,000 yuan); If there is an overall price increase in the industry due to the shortage of graphitization, Putailai's elasticity is the most significant, continue to be focused recommendation.

2) The graphitization self-sufficiency rate of other leading enterprises is expected to increase in 2022, with the increase of Zhongke Electric (equity) from 35-40% to nearly 70%, Shanshan Shares (equity) from about 40% to nearly 70%, and Beitree (only considering man-made) from 20% to 30-40% , to get more bussiness news here.