In the afternoon, a large number of stocks hit the daily limit! Australia suddenly reports a major positive development! The 13 trillion sector is experiencing a full-scale breakout!

Lithium batteries are showing sustainability!

On the afternoon of March 27, Ganfeng Lithium’s A-shares hit the daily limit, and Hong Kong stocks rose more than 12% at one point, reaching HKD 76.35 per share. Haike New Energy, Chuaneng Power, Tianyuan Co., Shida Shenghua, Weiyuan Co., and Yongshan Lithium also hit the daily limit, with nearly 30 stocks in the entire sector hitting the limit at one point. According to statistics, the total market capitalization of lithium battery concept stocks A and B shares reached 13.6 trillion yuan.

Some analysts believe that the demand for lithium batteries is exploding due to high oil prices, and global lithium battery orders are flooding into China. Additionally, the supply side is exceptionally weak, and no one expected that super mining giant Australia may enter a standstill due to diesel supply issues.

It is worth noting that today, the overall performance of non-ferrous metals was impressive, with gold and silver both recording good gains, and lithium carbonate performing very strongly. Meanwhile, the U.S. dollar index also experienced a significant drop.

Lithium Batteries Continue to Explode

Following yesterday’s explosion, lithium batteries surged again in the afternoon. Hong Kong lithium battery stocks continued to strengthen in the afternoon, with Ganfeng Lithium rising more than 12%, Tianqi Lithium rising more than 7%, CATL rising more than 6%, BYD shares rising nearly 5%, and Ningde Times rising more than 3%.

A-shares ignited the entire sector after Ganfeng Lithium hit the daily limit. Dinglong Co. and Haike New Energy both hit the daily limit at 20%, Haichen Pharmaceutical, Tianhua New Energy, and Huasheng Lithium rose more than 10%, while stocks such as Hangzhou Electric Co., Tibet Mount Everest, Shengxin Lithium Energy, Dandong South, and Shida Shenghua hit the daily limit, with nearly 30 stocks in the entire sector hitting the limit or rising more than 10%.

Brokerage firms believe that the demand for lithium mines is on the verge of exploding, while the weak supply is leaking everywhere. The demand for lithium batteries is exploding due to high oil prices, and global lithium battery orders are flooding into China. Scenarios such as energy storage, new energy passenger vehicles, and new energy heavy trucks can all clearly feel the strong new demand. This part represents the incremental demand of the future.

Based on the experience of the Russia-Ukraine conflict, it is expected that in two months, that is, by May, domestic production expectations will be clearly revised upward, and the quantity will be settled. The supply side is exceptionally weak, and no one expected that super mining giant Australia may enter a standstill due to diesel supply issues.

Australia has closed four refineries in the past ten years, leaving only two domestically. Nearly 90% of finished oil relies on imports. Diesel is mainly imported from Singapore, South Korea, and China. However, since the Middle East war, Asian countries have struggled to secure their own finished oil supply, let alone export to supply Australia. At least six fuel ships (mainly including diesel) have been canceled or delayed. Australia’s oil inventory is only about one month, the lowest level among International Energy Agency member countries, and the ongoing war will lead to a crisis in Australia’s fuel supply.

Australian iron ore producer Fenix announced that its mining operations have begun to be affected due to restricted diesel supply caused by the Iran war, forcing it to reduce some business activities. Diesel consumption in Australia’s mining industry accounts for 30% of domestic usage, with regional diesel reserves varying, and overall inventory lasting 15-30 days. In terms of output value, the importance of lithium mines ranks below coal, iron ore, and gold, making it not a priority for supply protection. Therefore, Australia’s lithium mine production, which accounts for 30% of global supply, may shrink in the short term or even face shutdown.

The U.S. Dollar Index is an Important Indicator

On March 27, lithium carbonate futures also performed strongly, surging more than 6% in the afternoon. Other non-ferrous commodities also performed well. Spot gold broke through $4470 per ounce, rising more than 2% during the day. Spot silver touched $70 per ounce, rising 3% during the day. Meanwhile, the U.S. dollar index also began to weaken. Analysts believe that the U.S. dollar index will be the most important investment indicator in the future.

Currently, the situation in the Middle East is overturning Wall Street’s optimistic expectations for the dollar. The Bloomberg Dollar Index has risen more than 2% since March, likely achieving its best monthly performance since July last year. This shift is due to the influx of safe-haven funds and rising oil prices weakening the market’s bets on Fed rate cuts. However, this rally has also raised questions about the long-term position of the dollar. In 2025, the Bloomberg Dollar Index is expected to fall about 8%, marking the largest decline since 2017, mainly due to market expectations of continued Fed rate cuts and rising discussions on “de-dollarization.”

Deutsche Bank warns that the Middle East war is testing the dollar’s status as a currency for oil trade settlements, which may accelerate the shift to other currencies. Additionally, if high oil prices long-term drag down the global economy, expectations for Fed rate cuts may reignite, which could lead to a weaker dollar. Both Goldman Sachs and Morgan Stanley believe that heightened economic concerns will suppress the dollar. While institutions like TD Securities and Manulife Investment Management have closed some dollar short positions, they still expect the dollar to depreciate in the medium term, with the euro likely to appreciate. However, in any case, the dollar’s decline will benefit the performance of non-ferrous metals.

Typeset by: Wang Lulu

Proofread by: Lv Jiubiao