Crude oil rose unabated, and the prices of soda ash, PVC, TDI, MDI, PTA and other products returned to the upward track. On the other hand, semiconductors and new energy materials are highly concerned.
Industry trends:
Among the 101 chemical varieties tracked this week, the prices of 52 varieties rose, 13 varieties fell and 36 varieties remained stable. The top five varieties were ethylene, dichloromethane, aniline, toluene and methyl ethyl ketone; The top five varieties of decline were liquid chlorine, NYMEX natural gas, acetic acid, urea and calcium carbide.
WTI crude oil closed at US $93.90/barrel this week, and the closing price rose by 1.72% this week; Brent crude oil closed at US $95.10/barrel, closing up 1.96% this week. Affected by the substantial reduction of EIA crude oil inventory, the geopolitical tension between Russia and Ukraine and the news that the United States requires its citizens to evacuate Ukraine within 48 hours, crude oil rose sharply at the end of this week, and the oil distribution hit $95 for the first time since 2014. According to the EIA data of the United States, as of the week of February 4, the commercial crude oil inventory of the United States excluding the strategic reserve unexpectedly decreased by 4.756 million barrels, significantly exceeding the expected increase of 369000 barrels. In addition, the US Non seasonally adjusted CPI in January released this week was 7.5%, higher than the 7.3% expected by the market, the fastest rising rate since 1982. Goldman Sachs significantly raised the Fed’s interest rate hike expectation for this year to seven times, after five interest rate hikes in 2022. In the future, the geopolitics of Russia and Ukraine may be at risk of intensifying conflicts, while the high inflation in the United States and the number of interest rate hikes exceeding expectations have a certain negative impact on oil prices; In addition, the Iranian nuclear agreement will become the biggest variable in international oil prices this year. If Iranian crude oil returns to the market in the second half of the year, the oil distribution price may decline significantly. On the premise that Iranian crude oil cannot return to the market, the crude oil supply may continue to be tight, and the oil distribution price may continue to rise in the near future.
Soda ash continued to rise this week. According to Baichuan Yingfu, the average market price of light soda ash closed at 2463 yuan / ton, with a weekly closing price increase of 9.96%. Due to the reduced load production of soda ash manufacturers in Henan, Shandong, Tianjin and other provinces during the Winter Olympics, the logistics slowed down during the Spring Festival, the market supply decreased, and the transaction focus continued to move upward. Meanwhile, the overall operating rate of the industry this week was 73.5%. Henan Zhongyuan Chemical Phase III plant was shut down and Henan Jinshan Huojia plant was shut down; On the whole, the supply end of soda ash decreased slightly. On the inventory side, the total inventory of Chinese soda ash manufacturers in the week ended February 11 was 1289100 tons, an increase of 66000 tons month on month. In the medium and long term, with the promotion of the national policies of carbon neutralization and carbon peak, the photovoltaic glass industry line has been put into operation continuously. The demand for soda ash by photovoltaic glass will increase rapidly in the past three years, and relevant policies such as steady growth may also boost the demand for soda ash.
TDI (East China) closed at 19500 yuan / ton this week, with the closing price up 5.41% from last week and 27.04% from the beginning of the year. In terms of supply, Wanhua Fujian TDI unit is restarted, and the supply is still limited. Yantai Juli unit is still in shutdown and maintenance. Gansu Yinguang unit is expected to restart after February, and the overall supply has not increased significantly. Overseas, a serious explosion occurred in the third unit of yncc in Lishui National Industrial Park, quanluonan Road, South Korea, resulting in four deaths and four injuries. According to Baichuan Yingfu, the explosion chemical plant supplies raw materials for the surrounding MDI and TDI units. The explosion may lead to the joint production reduction of MDI and Hanhua chemical TDI units in Jinhu Mitsui, South Korea, which will promote the rise of polyurethane market price in the short term. TDI export is expected to continue to be boosted, and the price is expected to continue to rise.
Investment suggestions:
This week’s view
Cyclical industries: crude oil prices continued to rise this week, and downstream petrochemical products such as ethylene, propylene and butadiene generally rose. As of January 28, 2022, Shenwan basic chemical industry index closed at 4476 points, with a weekly decrease of 3.3%; Shenwan petroleum and petrochemical index closed at 2311 points, down 3.1% for the week. Potassium fertilizer, fluorine chemical industry, refrigerant, inorganic salt, other fiber and other sub industries led the increase; Synthetic leather, coating, paint and ink manufacturing, viscose, phosphorus chemical industry, phosphate, spandex and other sub industries led the decline. At present, the valuations of industry leading companies and private refining and chemical leaders have returned to a low level, and the adjustment may be relatively sufficient. The stock price performance may return to the rising trend after the festival.
Growth companies: the average market price of battery grade lithium carbonate exceeded 380000 Yuan / ton, and the price of new energy materials remained high. According to the data of Baichuan Yingfu, the average market price of battery grade lithium carbonate closed at 380400 yuan / ton this week, with a weekly increase of 5.5%. The prices of EVA, diaphragm, NMP, polysilicon and DMC remained high. Since the beginning of the year, the adjustment of individual stocks of new materials has been obvious, but the situation of short supply of semiconductors and new energy materials has not changed, and the stock price performance after the festival is expected to usher in valuation repair.
Stock portfolio: from the perspective of sub industry prosperity, pesticides, infrastructure related chemicals, semiconductor materials and new energy materials are expected to maintain a high prosperity. From the perspective of valuation, after full adjustment, the valuation of private refining, industry leaders, new materials and other related chemical enterprises has returned to a low level again. In the medium and long term, with the sustainability of profits exceeding expectations, high-quality chemical assets are expected to usher in value revaluation. Recommended stocks: Wanhua Chemical Group Co.Ltd(600309) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Rongsheng Petro Chemical Co.Ltd(002493) , Zhejiang Nhu Company Ltd(002001) , Zhejiang Huangma Technology Co.Ltd(603181) , Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Lianhe Chemical Technology Co.Ltd(002250) , Lier Chemical Co.Ltd(002258) , Crystal Clear Electronic Material Co.Ltd(300655) , Valiant Co.Ltd(002643) , Sobute New Materials Co.Ltd(603916) , Shandong Sinocera Functional Material Co.Ltd(300285) etc.
February gold shares: Crystal Clear Electronic Material Co.Ltd(300655)
Risk tips
1) large fluctuations in oil prices caused by changes in geopolitical factors; 2) The global epidemic situation has changed.
