Crude oil prices remained high, 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 49 varieties rose, 27 varieties fell and 25 varieties remained stable. The top five varieties were butadiene, dichloromethane, light soda ash, ion-exchange membrane caustic soda and ethylene; The top five varieties of decline were aluminum fluoride, liquid chlorine, acetic acid, acetic anhydride and urea (Baltic Sea small grain bulk).
WTI crude oil closed at US $91.8/barrel this week, with the closing price falling by 1.44% and the weekly average price rising by 2.03%; Brent crude oil closed at US $95.10/barrel, with the closing price down 1.56% and the weekly average price up 1.85%. Crude oil supply remained tight this week, geopolitical tensions did not ease, and the weekly average price of crude oil continued to rise. In terms of supply, according to EIA data, crude oil inventories increased by 1121000 barrels in the week ended February 11, an increase of 0.3% over last week; However, US Gulf refiners cut the operating rate to 83.5%, the lowest level since October last year. Meanwhile, IEA predicts that the actual output of OPEC + still lags behind the target output. In terms of demand, the IEA monthly report raised its crude oil demand forecast for 2022, and it is expected that the global demand will increase by 3.2 million barrels / day this year. In addition, OPEC said that the negative impact of Omicron on the economy was not as big as the previous strain, and the overall demand for crude oil was better. In the future, the market is still in the state of low inventory and destocking, the geopolitical uncertainty may continue, and the crude oil is expected to remain high and volatile.
The price of liquid caustic soda rose sharply this week. According to the data of Baichuan Yingfu, ion-exchange membrane caustic soda (30% converted into 100) closed at 4520 yuan / ton, with an average weekly price increase of 7.69%. In terms of supply, the output of liquid alkali this week was about 695000 tons, up 2.58% from last week, and the inventory was about 144000 tons, down 1.8% from last week. On February 13, Dongying large factory entered the maintenance in advance due to failure, and the supply of liquid alkali decreased. Meanwhile, Zhenyang chlor alkali, Chongqing Tianyuan and Yanhai chemical have maintenance plans at the end of February, and the impact of maintenance on the supply side may continue. In terms of demand, the export signing in Jiangsu is good, and the downstream alumina enterprises in southwest and South China are actively receiving orders. In the future, with the end of the Winter Olympic Games, the operating rate of liquid alkali downstream enterprises may increase, and the price still has strong support.
The price of yellow phosphorus rose this week. According to the data of Baichuan Yingfu, yellow phosphorus (Sichuan) closed at 32000 yuan / ton, with a weekly closing price increase of 4.92% and a weekly average price increase of 2.58%. The prices of phosphate rock, phosphoric acid and sodium tripolyphosphate were the same as last week. The output of yellow phosphorus this week was about 12600 tons, down 3.04% from last week; Inventory closed at 1210 tons, down 73.11% from last week. The decrease in yellow phosphorus supply this week was mainly due to the maintenance of manufacturers in Sichuan, and the overall operating rate decreased by 1.28 PCTs compared with last week. At the same time, the downstream demand is relatively stable, some manufacturers actively ship, and the inventory is significantly reduced. In the future, phosphate rock enterprises in some areas will stop mining, and the price of phosphate rock may rise, supporting the upward price of downstream phosphorus chemical products such as yellow phosphorus.
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 February 18, 2022, Shenwan basic chemical index closed at 4799.6 points, with a weekly increase of 3.2%; Shenwan petroleum and petrochemical index closed at 2488.8 points, down 0.3% for the week. Phosphorus fertilizer, pesticide, potassium fertilizer, phosphorus chemical industry, phosphate, daily chemicals and other sub industries led the increase; Coating, paint and ink manufacturing, synthetic leather, petroleum processing, civil explosive products, 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 have been relatively sufficient, and the stock price performance may return to the rising trend. Growth companies: the average market price of battery grade lithium carbonate exceeded 420000 yuan / ton, and the price of new energy materials remained high. According to the data of business agency, as of February 17, the average price of battery grade lithium carbonate in East China closed at 422000 yuan / ton, up 6.57% from the beginning of the week. 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 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.
