Key news tracking this week
Recently, the State Council issued the comprehensive work plan for energy conservation and emission reduction in the 14th five year plan. The plan specifies that by 2025, the energy consumption per unit of China’s GDP will be 13.5% lower than that in 2020, the total energy consumption will be reasonably controlled, and the total emissions of chemical oxygen demand, ammonia nitrogen, nitrogen oxides and volatile organic compounds will be 8%, 8%, 10% and 10% lower than that in 2020 respectively. Energy conservation and emission reduction policies and mechanisms have been improved, the energy efficiency of key industries and the emission control level of major pollutants have basically reached the international advanced level, and remarkable achievements have been made in the green transformation of economic and social development.
Price tracking comments on key products this week
WTI oil prices rose 2% this week to US $86.82/barrel.
Key injection sub industries: ethylene glycol / heavy soda ash / TDI / ethylene PVC / polymerized MDI / titanium dioxide / urea rose by 5.5% / 3.1% / 2.8% / 1.6% / 1.4% / 1.0% / 0.8% month on month respectively this week; Rubber fell 4.0% month on month; VA / acetic acid / caustic soda / Spandex / viscose staple / viscose filament / VE / liquid methionine / pure MDI / solid methionine / DMF / calcium carbide process / PVC / light soda / silicone prices remained unchanged.
The top five sub industries of this week’s increase: trichloroethylene (East China) (+ 30.9%), butadiene (Southeast Asia CFR) (+ 20%), bituminous coal (q5500, Shanxi Youhun) (+ 14.7%), phthalic anhydride (East China naphthalene method) (+ 8.8%), butadiene (East China) (+ 8.3%).
Ethylene glycol: the market price of ethylene glycol in China rose significantly this week. This week, the supply side support weakened, the demand side operated weakly and stably, and the fundamentals continued to weaken, but the cost side was positive and strong, driving the strong rise of ethylene glycol market price.
Soda ash: this week, China’s soda ash market price rose, the market supply increased, and near the Spring Festival, the enthusiasm of downstream users to prepare goods gradually slowed down, some light soda users have stopped production and slowed down, and the demand side decreased slightly; However, soda ash manufacturers have sufficient orders. Supported by strong positive factors, the transaction focus of soda ash market continues to rise slightly.
Market performance of chemical sector this week
The basic chemical sector fell 3.11% compared with last week, and the Shanghai and Shenzhen 300 index fell 4.51% compared with last week. The basic chemical sector outperformed the market by 1.4 percentage points, ranking eighth in all sectors. According to the classification of inorganic chemical fertilizer (+ 0.5%) and other basic chemicals (+ 0.5%) in the week, fluorine and other refrigerants increased significantly (+ 1.0%).
Key sub industry views
(1) many factors affect the 22-year boom of the sub industry. The overall profitability of the pesticide industry is expected to improve in the 22-year period when the cultivated land area is expected to increase, grain prices remain at a high level, China’s supply is orderly and prices rise in the fourth quarter. It is recommended that Jiangsu Yangnong Chemical Co.Ltd(600486) , Shandong Weifang Rainbow Chemical Co.Ltd(301035) , Anhui Guangxin Agrochemical Co.Ltd(603599) , Limin Group Co.Ltd(002734) ; The prosperity of the tire industry has bottomed out, and the new energy field has brought development opportunities. It is suggested to pay attention to Sailun Group Co.Ltd(601058) , Qingdao Sentury Tire Co.Ltd(002984) . The boom of viscose industry is expected to reverse, and Tangshan Sanyou Chemical Industries Co.Ltd(600409) is recommended. (2) The demand economy is relatively weak, and the fields of semiconductor materials, military materials and other new materials are independent and controllable in the medium and long term; Focus on the chemical synthesis platform company Valiant Co.Ltd(002643) and China’s private gas leading enterprise Suzhou Jinhong Gas Co.Ltd(688106) . (3) The downstream demand is stable, and great attention is paid to the subdivided fields such as photovoltaic, wind power, new energy and sugar substitutes; Focus on recommending Shenzhen Capchem Technology.Ltd(300037) as the leader of new energy functional materials and Anhui Jinhe Industrial Co.Ltd(002597) as the leader of global sweeteners. (4) The vertical and horizontal expansion of the leading enterprises has highlighted the advantages of integration, and the profit center is expected to rise; Key recommendations are Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Zhejiang Nhu Company Ltd(002001) (joint medical coverage).
Risk warning: risk of large fluctuation of crude oil price; Covid-19 epidemic leads to less demand than expected risk; Safety and environmental protection risks
