Cost rise pressure is difficult to resolve Aluminum electrolytic capacitor prices spread

The overall decline in the color plate, including lithium batteries, aluminum and precious metals sector gains top, tin, rare earth and other sectors fell more. In terms of prices, copper and aluminum in the base metals have risen, and in the case of small metals, lanthanum oxides and other types have risen. We believe that on the one hand, we must pay attention to the possibility of new energy demand exceeding expectations and the valuation of the cobalt-lithium sector. On the other hand, we must pay attention to the disturbances on the supply side of rare earth, tungsten and other varieties under the intensification of domestic environmental protection. The cost of aluminum electrode foils in the field of material processing has risen due to environmental protection factors, and the price increase is expected to continue. In the context of trade frictions, the Hi-Tech materials segment is still worthy of attention.

1. Rare Earths: Oxidized Antimony and Antimony Oxide Rising, Light Natural Rust Tightening

According to SMM news, the prices of lanthanum and lanthanum products continued to increase this week. As of Friday, lanthanum oxide mainstreams were 333-335 thousand yuan/ton, metal lanthanum 442-250 yuan/ton, and thorium oxide 125,000 yuan/ton. . According to SMM, affected by environmental protection inspections in Jiangxi Province, more than a dozen rare earth separation companies have stopped production. The prices of mainstream rare earths have started to rise, and the number of inquiries has increased. It is expected that this verification will take more than one month, and rare earth prices will fluctuate greatly. With the strengthening of environmental protection, the regional production capacity of rare earths and other resources that are relatively concentrated may be affected. Given the high-tech properties of rare earths and the existence of policy support expectations, it is recommended that attention be paid.

2. Cobalt-lithium: Cobalt-lithium Warming: Recurring Opportunities, Focusing on Cutting-edge

We believe that when the current subsidy for retreat, the positive sentiment has already passed and the positive effects begin to show. At the same time, the expansion of overseas cobalt-lithium resources remains uncertain. We believe that the vigorous development of the dual-energy system and the three-way energy storage of new energy vehicles in 2019 is expected to drive the rapid development of lithium cobalt. In the future, the increase in cobalt and lithium will be gradually locked in strategic position by the industry giants, and the supply may even be in short supply again. After the expiration of the June subsidy, if demand continues to grow at a high rate, we believe that the stock market will boost the price of lithium cobalt. When the consensus of the industry leading standard expects PE to be lower than 20X, it is recommended to actively focus on the band allocation opportunities.

3. Aluminium electrode foil: The pressure of rising costs is difficult to resolve and the price of aluminum electrolytic capacitors spreads.

According to the International Electronics Business Report, China’s larger aluminum electrolytic capacitor plant, Aihua Group (603989), announced at the end of April that it would increase its selling price by 8%. Japan’s Rubycon and Taiwan-based Cambon Electronics also issued price increase information. We believe that the increase in the price of aluminum electrolytic capacitors is due to the consumption of large amounts of acid in the production of foil into their main raw materials. Affected by environmental protection policies, the rising cost of aluminum electrolytic capacitors has pushed up prices of aluminum electrolytic capacitors. We expect that the shutdown capacity in China will be difficult to resume production in the short term; it is recommended to pay attention to the relevant targets with corrosion and foil production capacity.

4. Continued trade frictions, focusing on the value of precious metals and electronic materials

Recently, the trade friction between the United States and many countries has continued to ferment. We believe that the price of gold under the weak dollar cycle will remain high based on the risk aversion sentiment under the trade friction of high-tech products. We believe that gold and silver should be paid attention to risk-avoidance varieties. In addition, the U.S. trade taxation is mainly aimed at the Hi-tech industry. We believe that it is expected to force domestic technology industries to accelerate the domestic substitution process of key materials in the Hi-Tech industry chain. We recommend focusing on semiconductors, display materials such as targets, and processing consumables.