Potash fertilizer: on February 15, 2022, China’s joint negotiation group on imported potash fertilizer reached an agreement with the international potash fertilizer supplier Canadian potash company canpotex, which determined that the import price of standard potassium chloride in 2022 was cfr590 US dollars / ton, which was 139% higher than the contract price in 2021, and the contract was valid until December 31, 2022. On February 14, 2022, India also signed a potassium hypertrophy contract with canpotex, and the contract price was the same as that of China, both of which were cfr590 US dollars / ton. According to the import contract price of cfr590 US dollars / ton, the cost price of 60% powdered potassium chloride in Chinese ports is about 4200 ~ 4250 yuan / ton.
According to Ifind data, as of February 18, 2022, the average import price of 60% powdered potassium chloride in China was 4085 yuan / ton, and the average price of self-produced potassium chloride in China was about 3990 yuan / ton, slightly lower than the average import price. The price of potassium chloride produced in Qinghai Salt Lake is 3490 yuan / ton, which is significantly lower than the current average price of China and import. In terms of inventory, China’s potassium chloride inventory began to decline rapidly since Q2 in 2020. After entering 2021, China’s potassium fertilizer inventory continued to maintain a historically low level.
With the advent of the peak spring farming season in 2022, the supply of potash fertilizer in China remains tight, especially in the northeast. Due to the insufficient raw material reserves before the festival of compound fertilizer plants, the current shortage is relatively serious. Recently, there has been another epidemic in Manzhouli, which has also affected the transportation of goods at border trade ports to a certain extent. However, it is optimistic that with the signing of the contract, the relevant sources of goods will be supplemented one after another. In addition, China will continue to bid for the State Reserve potash fertilizer, which will also alleviate the shortage of potash fertilizer supply to a certain extent. However, it may cause some resistance to the continuous rise of potash fertilizer prices. Although the supply and demand situation and price trend of potash fertilizer are affected by many aspects, on the whole, the potash fertilizer market is still expected to maintain a high boom with the support of the high price of large contracts and the continuous strong demand in the downstream.
Weekly rise and fall of sectors: in the past five trading days, all sectors in Shanghai and Shenzhen stock markets showed an upward trend. This week, the Shanghai stock index rose by 0.80%, the Shenzhen Component Index rose by 1.78%, the Shanghai and Shenzhen 300 index rose by 1.08% and the gem index rose by 2.93%. CITIC basic chemical sector rose 4.2%, ranking fourth in all sectors. In the past five trading days, most of the sub sectors of the chemical industry showed an upward trend. The top five sub sectors of the rise and fall were: phosphorus fertilizer and phosphorus chemical (+ 11.0%), potassium fertilizer (+ 9.6%), lithium electric chemicals (+ 9.5%), carbon fiber (+ 7.4%), and rubber additives (+ 6.6%).
Rise and fall of individual stocks: in the past five trading days, the top gainers in the basic chemical sector are: Aba Chemicals Corporation(300261) (+ 66.73%), Henan Qingshuiyuan Technology Co.Ltd(300437) (+ 25.48%), * ST Chengxing (+ 21.15%), Zhuzhou Times New Material Technology Co.Ltd(600458) (+ 18.23%), Yunnan Yuntianhua Co.Ltd(600096) (+ 17.78%). In the past five trading days, the stocks with the largest decline in basic chemical industry include: Shanxi Huhua Group Co.Ltd(003002) (- 21.65%), Skshu Paint Co.Ltd(603737) (- 13.48%), Poly Union Chemical Holding Group Co.Ltd(002037) (- 12.43%), Hunan Nanling Industry Explosive Material Co.Ltd(002096) (- 12.22%), Tibet Gaozheng Explosive Co.Ltd(002827) (- 12.20%).
Investment suggestions: (1) the upstream oil and gas sector is suggested to pay attention to Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) , CNOOC and Enn Natural Gas Co.Ltd(600803) and other oil service targets. (2) White horse, the leader of undervalued chemical industry: it is suggested to pay attention to ① three chemical white horses: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) ; ② Private refining and chemical fiber sector: Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengyi Petrochemical Co.Ltd(000703) , Tongkun Group Co.Ltd(601233) , Xinfengming Group Co.Ltd(603225) ; ③ Light hydrocarbon cracking sector: Satellite chemistry, Oriental Energy Co.Ltd(002221) ; ④ Coal to olefin: Ningxia Baofeng Energy Group Co.Ltd(600989) . (3) New materials: it is suggested to pay attention to ① semiconductor materials: Crystal Clear Electronic Material Co.Ltd(300655) , Red Avenue New Materials Group Co.Ltd(603650) , Guangdong Huate Gas Co.Ltd(688268) , Jiangsu Yoke Technology Co.Ltd(002409) , Haohua Chemical Science & Technology Corp.Ltd(600378) , Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) , Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) , Tianjin Jiuri New Materials Co.Ltd(688199) , Hubei Dinglong Co.Ltd(300054) ; ② Wind power materials: carbon fiber, polyether amine, matrix resin, interlayer materials, structural adhesive and other related enterprises; ③ Lithium battery materials: electrolyte, lithium battery diaphragm, phosphorus chemical industry, fluorine chemical industry and other related enterprises; ④ Photovoltaic materials: upstream silicon materials, EVA, soda ash and other related enterprises; ⑤ OLED industry chain:
\u3000\u3000 Valiant Co.Ltd(002643) 、 Xi’An Manareco New Materials Co.Ltd(688550) 、 Jilin Oled Material Tech Co.Ltd(688378) 、 Puyang Huicheng Electronic Material Co.Ltd(300481) 。 (4) Traditional cycle sector: it is suggested to pay attention to relevant targets in the fields of pesticides, coal chemical industry, urea, dyes, vitamins, chlor alkali, etc.
Risk analysis: the risk of rapid decline and high oil price; Downstream demand is less than expected risk.
