This week's Chemical Market Overview
After a sharp decline in the early stage, the market stabilized, of which Shenwan chemical rose 3.16%, outperforming the Shanghai and Shenzhen 300 index by 2.08%. In terms of targets, the performance of new energy chemical materials, titanium dioxide by hydrochloric acid method and potassium fertilizer was strong, and the civil explosion targets catalyzed by policies were under pressure in the early stage. The recent strong performance of the resumption is more or less related to the changes in its fundamentals, such as policies, performance and product prices. Our understanding is that in the defensive market, institutions will pay more attention to the present rather than poetry and distance.
Portfolio recommendation
\u3000\u3000 Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) 、 Shenzhen Wote Advanced Materials Co.Ltd(002886) 、 Sichuan Em Technology Co.Ltd(601208) 、 Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) 、 Jiangsu Flag Chemical Industry Co.Ltd(300575)
Major events of this week
Potash fertilizer: the Chinese negotiating team and Canadian potash company canpotex reached an agreement on the 2022 potash fertilizer contract on February 15, with the price of 590 US dollars / ton CFR, the same as that in India. The price of the 22-year large-scale contract is 343 US dollars higher than that of 21 years. This price is the highest price signed by China's potassium fertilizer contract in recent ten years, and the pressure of import cost continues to increase. However, at present, the market price of 60% of China's potassium chloride has exceeded 4000 yuan. The price of the large-scale contract plus the converted import cost of freight is about 4200 yuan, which is not much different from China's trading market. At present, the global potash supply is still affected by unstable factors in Belarus. China and India are the world's largest potash demand countries. The signing of the two orders is expected to support the global potash price to remain relatively high. In China, the downstream of potash fertilizer is related to agricultural development and food security. On the one hand, the international price is high and on the other hand, China's output is insufficient. It is expected that the price of large contract will support the market price of potash fertilizer in China. However, due to the impact of national policies on the price of domestic potash fertilizer, there is expected to be room for adjustment under the current policy state, but it is relatively limited, The price of domestic potash fertilizer still needs to pay attention to the changes of China's policy.
Reduction of down payment ratio of real estate in some cities: previously, the market was worried that there would be a significant pressure on the real estate completion end this year. We believe that under the background of stable growth and guaranteed delivery, the probability of significant negative contribution of the real estate completion end is small. Along this main line, it is suggested to pay attention to the investment opportunities of soda ash and PVC.
Rebound of new energy chemical materials: the market is concerned about the follow-up investment opportunities of this sector. Our understanding is that this sector will show a differentiation trend this year, and the performance fulfillment is the key. We are optimistic about PVDF, soda ash and conductive carbon black with good supply pattern and turning point of localization rate.
Risk tips
The epidemic affects the demand outside China, the crude oil price fluctuates violently, and the change of trade policy affects the industrial layout.
