Core Viewpoint - The price of lithium carbonate has surpassed 170,000 yuan per ton, with a significant increase in both futures and spot markets, indicating a shift in trading methods and the re-emergence of sales agreements in the industry [3][4][5]. Group 1: Price Trends - On January 13, the main contract for lithium carbonate futures on the Shanghai Futures Exchange hit a limit up, reaching 174,060 yuan per ton, with a cumulative increase of over 40% this month [3]. - The highest market price for battery-grade lithium carbonate exceeded 160,000 yuan per ton on January 13, continuing to rise from the previous trading day [4]. Group 2: Sales Agreements - Recent signals indicate that sales agreements, which were prevalent during the last upcycle and quiet during the downcycle, are making a comeback [6]. - Sales agreements typically grant buyers priority procurement rights for a certain percentage or all output from a project, with stricter performance obligations [7]. - The essence of sales agreements is not about lower prices but about greater certainty regarding supply [9]. Group 3: Characteristics of Sales Agreements - The strength of certainty in sales agreements is reflected in three aspects: higher coverage ratios, stronger rights, and flexible pricing mechanisms [10][11]. - A recent example includes a binding 10-year sales agreement between Lilac Solutions and Traxys North America for 50,000 tons of lithium carbonate, covering 100% of Lilac's planned capacity [12]. Group 4: Domestic Developments - Leading domestic lithium companies are also showing movements towards sales agreements, particularly in financing and asset integration transactions [13]. - Ganfeng Lithium announced a financial support agreement with Lithium Argentina, which includes a sales agreement for 6,000 tons of lithium carbonate equivalent [14]. Group 5: Market Dynamics - The current cycle shows that sales agreements are not only occurring at the resource end but also in demand-side strategies, as companies seek to manage risks amid rising costs [16][17]. - The return of sales agreements often coincides with periods of supply uncertainty and rising prices, as seen in previous cycles [18]. Group 6: Future Supply and Demand - The market is experiencing a shift in supply and demand expectations, with predictions of a potential shortage in 2026 amid strong growth in energy storage demand [20]. - The anticipated increase in lithium demand for energy storage is projected to grow by 71% in 2025 and an additional 55% in 2026 [20]. Group 7: Implications of Sales Agreements - The re-emergence of sales agreements may compress liquidity in the spot market, making prices more susceptible to marginal transactions [23]. - The arrangement of locking quantities without locking prices could redistribute risks and profits along the supply chain, with upstream securing sales and downstream providing financing support [24]. - When sales agreements are embedded in financing and asset integration terms, they evolve from procurement arrangements to transaction pricing, pushing the industry towards further integration and capitalization [25].

1. Report Industry Investment Ratings No relevant content provided. 2. Core Views of the Report - Global crude oil supply and demand are becoming more relaxed, and the progress of the peace talks led by the US has increased concerns about the release of Russian oil supply, causing oil prices to drop to their lowest level this year [1] - Precious metals continued to be strong overnight. The loose trading continued after the Fed meeting, and gold is approaching its historical high. If it breaks through, the strong performance of precious metals is expected to continue [2] - The prices of various metals and commodities are affected by factors such as supply - demand relationships, policy changes, and cost factors, showing different trends of rise, fall, or shock [3][4][5] 3. Summary by Relevant Catalogs Energy Commodities - **Crude Oil**: EU sanctions on Russia and US sanctions on Venezuela have affected the global oil market. Under the background of loose supply and demand, the potential release of Russian oil supply after the peace talks has put pressure on oil prices [1] - **Natural Gas**: No relevant content provided. - **Coal**: No relevant content provided. - **Liquefied Natural Gas (LNG)**: No relevant content provided. - **Carbon Emission Rights**: No relevant content provided. Metals - **Precious Metals**: Gold is approaching its historical high, and platinum and palladium are at high levels. The relatively low - valued platinum and palladium are favored by long - position funds. The long - term allocation rhythm is clear [2] - **Base Metals** - **Copper**: Overnight, LME copper rose and then gave back some gains. The high position volume in the Shanghai copper market suggests that long - position investors should temporarily reduce their positions and wait and see [3] - **Aluminum**: The medium - term upward trend of Shanghai aluminum remains unchanged. Long - position investors can hold their positions based on certain support levels and leave the market if they break [4] - **Zinc**: The LME's position limit plan is expected to end the soft squeeze on the outer market. The internal and external price difference is likely to converge, and it is a good time for cross - market reverse arbitrage. Shanghai zinc is in a short - term rebound [7] Chemicals - **Synthetic Materials** - **Polyethylene (PE)**: The supply of polyethylene is expected to increase, and the demand is weak, with low downstream inventory - building enthusiasm [25] - **Polypropylene (PP)**: The production of polypropylene is expected to increase slightly, and the short - term demand is weak [25] - **Basic Chemicals** - **Methanol**: The methanol market is in a narrow - range fluctuation. The supply - demand situation is difficult to improve significantly in the short term, and it is expected to be weak [22] - **Urea**: The supply - demand pattern of urea remains loose, and the price is expected to fluctuate within a range [21] Agricultural Products - **Grains and Oils** - **Soybeans and Soybean Meal**: The weather in South America has improved, and the US soybean data has not been adjusted. The domestic soybean and soybean meal inventories have decreased. The strategy is to wait for the weather changes in South America and go long on the main contract at low prices [33] - **Palm Oil**: The palm oil market is facing high - inventory pressure and is expected to be neutral or weak in the short term [34] - **Livestock and Poultry Products** - **Pigs**: The supply of pigs is still abundant, and the price is expected to be weak in the short term. The medium - to - long - term price may have a second bottom [38] - **Eggs**: The egg futures price of the 01 contract is leading the market, but the price is still in the previous range. The far - month contract needs to pay attention to chick replenishment and old - hen culling [39] - **Cash Crops** - **Cotton**: The Zhengzhou cotton price has risen significantly. There are rumors that the planting area in Xinjiang will decrease next year. The sales progress is fast, and the demand is stable. The industry can consider hedging opportunities [40] - **Sugar**: The international sugar market supply is sufficient, and the US sugar faces pressure. The production progress in Guangxi is slow, but the production forecast for the 25/26 season is good [41] Others - **Shipping**: The SCFIS European route index has been released, and the 12 - contract is expected to fluctuate. The spot price is expected to rise, but there are risks such as additional supply pressure. The far - month 04 contract is recommended to be shorted on rallies [19] - **Financial Futures** - **Stock Index Futures**: The A - share market and stock index futures fell yesterday. The market is expected to be in a volatile and slightly upward pattern in the short term, depending on the implementation of domestic economic policies [45] - **Treasury Bond Futures**: The bond market is in a warm - up and volatile state. In the short term, it is difficult to break through the volatile adjustment pattern, and attention should be paid to the previous interest rate high points [46]

Core Viewpoint - The company reported a strong performance for 2024, with revenue and net profit significantly increasing year-on-year, indicating robust operational growth despite potential industry challenges [1] Financial Performance - In 2024, the company achieved revenue of 233.859 billion yuan, a year-on-year increase of 33.3%, and a net profit attributable to shareholders of 49.1 billion yuan, up 105.78% year-on-year, resulting in earnings per share of 3.08 yuan [1] - For Q4 2024, the company recorded revenue of 59.122 billion yuan, a year-on-year increase of 44.6%, but a quarter-on-quarter decline of 19.6%. The net profit for Q4 was 10.976 billion yuan, reflecting a year-on-year increase of 513.5% and a quarter-on-quarter decrease of 48.4% [1] Operational Metrics - The company’s container freight volume improved year-on-year, reaching 25.94 million TEUs, an increase of 10.12%. The trans-Pacific route benefited from a 13% increase in cargo volume due to rising U.S. import demand, while the Asia-Europe route saw a 13.3% decrease in cargo volume due to reduced effective capacity from the Red Sea detour [1] - The average SCFI composite index for container shipping rates in 2024 was 2506 points, representing a significant year-on-year increase of 149.2% [1] Industry Trends - The container shipping industry is expected to face supply pressures, with spot rates potentially continuing to decline. The SCFI rates for European and U.S. West Coast routes have decreased by 54.2% and 41.4% respectively since the beginning of the year [2] - Supply growth is projected at 6.2% for 2025 and 3.3% for 2026, while demand growth is forecasted at 0.0% for 2025 and -4.7% for 2026, indicating ongoing supply-demand pressures [2] - The recovery of the Red Sea route and U.S. tariff policies are critical variables affecting industry supply and spot rates. The current low number of vessels transiting the Red Sea suggests a challenging recovery ahead [2] Profit Forecast and Valuation - Due to better-than-expected long-term contract signing prices, the company has raised its 2025 net profit forecast by 13.7% to 27.1 billion yuan and introduced a net profit estimate of 20.5 billion yuan for 2026 [3] - The current A-share price corresponds to 8.5 times and 11.3 times the 2025 and 2026 price-to-earnings ratios, while the H-share price corresponds to 6.8 times and 8.8 times for the same periods [3] - The target prices for A-shares and H-shares remain unchanged at 16.30 yuan and 14.50 HKD respectively, indicating potential upside of 12.5% and 18.9% from current prices [3]