What are the investment opportunities under the European energy crisis?
uSMART盈立智投 09-13 09:46
The supply is limited and the energy crisis becomes more and more serious.
Russia began to export only 20% of European natural gas in July, and Nord Stream-1 has been closed since September 2. The price of TTF natural gas in the Netherlands is four times that of the same period. The pricing mechanism of the European electricity market causes electricity prices to be indirectly determined by natural gas prices. The superimposed extreme drought limits the production of hydropower and nuclear power, making the spot price of electricity in Europe more than five times higher than in the same period last year.
Source: research on CITIC Construction Investment Securities
With European residents signing 22-year packages, residential electricity prices are likely to triple that of last year without subsidies. In order to alleviate the impact of rising energy prices on residents and energy companies, the meeting of EU energy ministers on the 9th will discuss measures such as setting a ceiling on natural gas prices.
In October, natural gas consumption will enter a rising period, and LNG imports will increase sharply compared with the same period last year. However, taking into account the limited capacity of Europe to receive LNG, the low water level of the Rhine River will continue, and the rare "triple" La Nina climate event may occur this winter, there may still be a large gap in European natural gas in winter, supporting the high price of natural gas during the year.
The energy crisis aggravates inflation, and the risk of European debt default arises again.
The rise in energy prices brought about by the war between Russia and Ukraine has left Europe mired in low growth and high inflation. HICP in Europe continued to climb in August, reaching an all-time high of 9.1%. Although the euro zone grew 0.5% and 0.7% month-on-month in the first and second quarters, the German economy, which is dominated by manufacturing, stagnated.
Limited energy supply directly restricts industrial production in Europe. PPI in the euro zone has been above 30 per cent for six months in a row, and industrial production in Germany and France has been negative for a consecutive quarter compared with the same period last year. On the demand side, manufacturing PMI in the eurozone as a whole fell into contraction for the first time since November 2020.
The slowdown in industrial production is a drag on trade, with Germany's trade balance reaching an all-time low of 800 million euros in May and France's trade deficit widening. The huge trade deficit also pushed the euro below parity against the dollar. The ECB was forced to join the global "water collection model", raising interest rates 50BP again in September after raising interest rates 75BP in July.
The interest rate spread between Germany and Italy once soared to 258BP, close to the level of the European debt crisis, the effectiveness of ECB policy tools under high inflation is in doubt, and the risk of European debt default is back. The recession in Europe is expected to continue to heat up.
Organic in danger, tap potential opportunities
1) if a full-scale crisis breaks out, safe-haven assets will benefit relatively, focusing on opportunities for safe-haven assets such as gold. The European debt crisis began to spread to core France, where most of the main assets were negative, gold rose 9.4% against the trend due to increased risk aversion, the renminbi strengthened, and the equity market fell by A shares (- 24.9%) & gt; German (- 16.2%) & gt; Dow (- 0.8%).
2) at present, there is a shortage of energy supply in Europe, focusing on the domestic natural gas supply, LNG production / receiving stations / LNG ships (storage plates, etc.); the sharp rise in electricity prices in Europe, the shortening of consumer education time and the rapid increase in the penetration of household energy storage market.
3) Metal plate, pay attention to zinc / aluminum. Chemical sector concerned, MDI/TDI, vitamins, ethylene, urea, methionine and other price increases are expected, air-source heat pump as a substitute for natural gas heating, demand may increase rapidly.
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