Investment summary:
Talk every Monday:
In 2022, the market price of BDO decreased significantly, from more than 30000 yuan / ton at the beginning of January to around 25000 yuan / ton, down as much as 16%. This is mainly due to the continuous decline in the weekly operating load of the largest downstream spandex industry near the Spring Festival, the reduction in the consumption of raw material PTMEG by spandex and the simultaneous reduction in the consumption of BDO by PTMEG, while the operation in the upstream continues to be high, resulting in a short-term imbalance between supply and demand. We believe that downstream spandex and PBAT will provide strong demand support, and BDO prices are expected to rebound, which is good for companies with relevant layout.
The launch of new capacity was delayed. With the continuous rise of BDO price, more than 10 enterprises have announced the construction of new BDO capacity since 2021. The proposed capacity in the next five years will exceed 8 million tons, about four times the current capacity. However, considering the capacity launch cycle, only 100000 tons / year of Wanhua Chemical Group Co.Ltd(600309) and 300000 tons / year of Donghua Tianye will be put into operation this year, Most other devices will not be put into operation until after 2023.
The downstream demand continues to improve. When it is difficult to release the new capacity in the short term, the downstream demand continues to explode, and the supply-demand mismatch pattern is expected to continue in 2022. BDO downstream products mainly include PTMEG, PBT and PBAT. As the most important downstream, the spandex industry has started a new round of capacity expansion cycle. During the 14th Five Year Plan period, the spandex capacity is expected to double, and the annual capacity of the spandex industry will reach about 2 million tons. It is estimated that by 2025, the total demand for BDO in China’s spandex industry will be 1.98 million tons. In addition, pay attention to the demand of degradable plastic PBAT for BDO. Although the current proportion is still low, the promotion of degradable plastics is expected to accelerate under the promotion of the plastic ban order. The consumption of BDO by PBAT is expected to exceed 3.85 million tons in 2025, forming a strong support for the BDO market.
Investment strategy: Although the BDO industry will face greater pressure on production capacity in the future, the actual release will be after 2023, and the demand for downstream spandex and PBAT is expected to increase significantly, driving the BDO price to rebound. It is suggested to arrange Xinjiang Zhongtai Chenical Co.Ltd(002092) and Inner Mongolia Junzheng Energy & Chemical Group Co.Ltd(601216) industry leaders with raw material advantages and scale advantages.
Market review:
Sector performance: this week, CITIC’s basic chemical sector rose 3.1%, and the composition of the Shanghai Composite Index rose 1.9%. Compared with the Shanghai Composite Index in the same period, the basic chemical sector led by 1.2 percentage points. In terms of sub sectors, the sub sectors of basic chemical industry mainly rose this week, among which sub sectors such as potassium fertilizer, phosphorus fertilizer and phosphorus chemical industry, lithium electric chemicals, carbon fiber and inorganic salts led the rise; Civil explosive products, spandex, coatings, inks and pigments, tires, polyurethane and other sub sectors led the decline. Rise and fall of individual stocks: the basic chemical sector led the rise this week, including Aba Chemicals Corporation(300261) , Henan Qingshuiyuan Technology Co.Ltd(300437) , Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) , Zhuzhou Times New Material Technology Co.Ltd(600458) , Yunnan Yuntianhua Co.Ltd(600096) ; The leading stocks include Shanxi Huhua Group Co.Ltd(003002) , Skshu Paint Co.Ltd(603737) , Poly Union Chemical Holding Group Co.Ltd(002037) , Hunan Nanling Industry Explosive Material Co.Ltd(002096) , Tibet Gaozheng Explosive Co.Ltd(002827) .
Risk tips: the risk of fluctuations in international oil prices, the risk of repeated global epidemics, etc.
