Key investment points
This week’s view
Belarus potash fertilizer plant announced force majeure, and the global supply may decline significantly. Around February 16, Belarus told its customers that due to the sanctions imposed by the United States and Europe, the export of its potassium fertilizer products was limited and it would not be able to deliver. In addition, Belarus originally planned to use Lithuanian ports for the export trade of potash fertilizer. Under the current US sanctions, Lithuania announced that it would prohibit the transit of Belarus potash fertilizer, further increasing the difficulty of Belarus potash fertilizer export. Belarus is a major supplier of potash fertilizer in the world, accounting for about 17% of the global output. If Belarus potash fertilizer cannot enter the international trade market, the global potash fertilizer supply will become more and more tight.
According to the data of USDA, the planting area of the world’s main crops corn, soybean and cotton will increase by 2%, 1% and 3% year-on-year in 2022. The increase of planting area will promote the demand for agricultural materials. At the same time, the high Shenzhen Agricultural Products Group Co.Ltd(000061) price industry has boosted farmers’ planting enthusiasm. With the decline of supply, the global demand for agricultural materials will improve in 2022, and the price of overseas potassium fertilizer may continue to rise. It is suggested to pay attention to Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Qingdao East Steel Tower Stock Co.Ltd(002545) , and Qingdao East Steel Tower Stock Co.Ltd(002545) .
China Chemical price index (CCPI): this week, CCPI rose 0.9% over last week, 2.7% over the same period last month, 6.0% during the year and 9.5% over the same period last year.
Products with large increase this week: liquid argon (Shaanxi), 69.23%; Japanese LNG spot, 51.85%; Tetrachloroethylene (East China), 44.44%; Liquid oxygen (Shaanxi), 27.42%; Us N.Y. hub spot, 25.93%.
Products with large decline this week: acetic acid (East China), – 17.02%; Melamine (Sichuan), – 15.38%; Industrial naphthalene (East China), – 11.50%; Anthracite (q6500, Jincheng), – 10.58%; Maleic anhydride (East China), – 10.31%.
Polyurethane: the new production capacity is limited, and the supply and demand of MDI is expected to maintain a tight balance. Looking forward to the follow-up, at present, there is almost no large-scale new capacity planning on the supply side except Wanhua Chemical Group Co.Ltd(600309) and since the new capacity is mainly concentrated in Wanhua Chemical Group Co.Ltd(600309) hands, the better competition pattern of the industry is expected to remain stable. In terms of demand, the downstream of MDI remains stable at present. In the medium and long term, the downstream demand of MDI maintains a stable growth rate. Overall, the supply and demand pattern of MDI will maintain a tight balance, and the price is expected to remain high under the tightening of supply and demand. Recommend key points.
Coal chemical industry: from the perspective of the latest product raw material price difference, the downstream supply and demand of some coal chemical products are still tight, and the product price difference is in a high position. For example, the price difference between DMF, acetic acid, coal to ethylene glycol co production DMC, urea and other products and raw materials (bituminous coal) is 95.0%, 26.1%, 53.0% and 81.1%, and the profit is at a high level. Recommend Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , the leading enterprise of China coal chemical industry.
Pesticide / chemical fertilizer: the demand for agricultural materials such as pesticide and chemical fertilizer is still good. According to USDA prediction, the planting area of global bulk crops will increase. The global agrochemical boom cycle is expected to continue in 2022, and agrochemical products will benefit from the growth of overseas demand. The peak season of spring farming in China is coming, and phosphate fertilizer and potassium fertilizer may benefit from the increase in demand. As of February 20, Sino-Agri Leading Biosciences Co.Ltd(603970) technical drug price index was 182.22, down 0.48% week on week and 5.3% month on month. Pesticides are mainly recommended Jiangsu Yangnong Chemical Co.Ltd(600486) , Lianhe Chemical Technology Co.Ltd(002250) , Lier Chemical Co.Ltd(002258) , and chemical fertilizers are recommended to pay attention to Qinghai Salt Lake Industry Co.Ltd(000792) , Sichuan Development Lomon Co.Ltd(002312) .
Chemical fiber: Taking polyester filament POY as an example, the current price / price difference is at the historical quantile of 26.9% and 15.7% respectively. In the future, with the mitigation of the epidemic, the demand for textile and clothing in the downstream of chemical fiber will continue to be repaired, which is expected to further accelerate the repair of product price and price difference. Focus on Tongkun Group Co.Ltd(601233) , Xinfengming Group Co.Ltd(603225) .
New materials: lithium battery materials: the trend of automobile electrification has become, and power battery materials are expected to usher in an explosion.
Semiconductor materials: target materials, CMP polishing pads, high-end photoresists and other semiconductor materials have a foreign dependence of more than 90%, and trade uncertainty and industrial upgrading accelerate localization. Tail gas catalytic material:
“National six” emission standards will be implemented in stages, and zeolite and other related products are expected to continue in large quantities. Photovoltaic materials:
In the 14th five year plan, the proportion of non fossil energy consumption in primary energy will be further increased, and the downstream photovoltaic installation may meet the growth, driving the demand for new photovoltaic materials. Focus on the leader of power battery electrolyte Guangzhou Tinci Materials Technology Co.Ltd(002709) , Shenzhen Capchem Technology.Ltd(300037) , the leader of cathode materials Beijing Easpring Material Technology Co.Ltd(300073) , the global leader of photovoltaic adhesive film Hangzhou First Applied Material Co.Ltd(603806) , the platform company of semiconductor materials Jiangsu Yoke Technology Co.Ltd(002409) , the leading enterprise of catalytic materials Valiant Co.Ltd(002643) , Shandong Sinocera Functional Material Co.Ltd(300285) .
Wanhua Chemical Group Co.Ltd(600309) released MDI listing price in March. This week, Wanhua Chemical Group Co.Ltd(600309) , Huntsman and BASF announced the listing price of MDI in China in March Wanhua Chemical Group Co.Ltd(600309) polymerized MDI market listing price: 22800 yuan / ton (unchanged month on month); The listing price of pure MDI is 26800 yuan / ton (mom + 3000 yuan / ton). According to Baichuan and Longzhong information, the settlement price of aggregated MDI in Wanhua Chemical Group Co.Ltd(600309) 2 was 21500 yuan / ton (barrel acceptance, month on month + 300 yuan / ton). In terms of market price, this week, the price of pure MDI (East China) increased by 1.5% to 23750 yuan / ton, the price of polymerized MDI (East China) decreased by 5.7% to 20000 yuan / ton, and the comprehensive price difference of MDI (to pure benzene) in East China narrowed by 5.3% to 160180 yuan / ton.
The demand after the festival was good, and the price of silicon industry chain products generally rose.
Metal silicon: demand is improving, and the price of metal silicon continues to rise. According to Baichuan information, in terms of supply, the construction in Southwest China is stable and the supply is stable; The current construction in Northwest China has increased slightly, and the output has increased; Due to the high electricity price, enterprises in Hunan have not opened the furnace yet, and the supply is low. In terms of demand, since the second half of last year, polycrystalline silicon from many manufacturers has been put into operation successively. At present, the start-up of polycrystalline silicon industry is high and the demand is stable; The demand for organosilicon is good, driving the demand for metal silicon; In terms of silicon aluminum alloy, the resumption of production of downstream silicon aluminum alloy manufacturers drives the demand for metal silicon. In addition, the rising price of raw materials supports the cost of metal silicon. Metal silicon (421, Yunnan) continued to rise 0.7% to 22150 yuan / ton this week, up 3.7% since this month.
Organosilicon: export demand is good, supply shrinks, and prices continue to rise. According to Baichuan information, in terms of supply, Zhejiang Zhongtian device is currently shut down and is expected to restart at the end of the month; Hubei Xingfa is in load reduction production; The single unit of a large foreign factory was shut down due to force majeure, or until May.
The overall operating rate of the industry is about 80%. In terms of demand, the demand for silicone rubber and silicone oil in the downstream is rising. Recently, the export of silicone is active, and the overall demand is good. At present, some orders of silicone enterprises before the Spring Festival need to be delivered. Orders in March are also being followed up. The market inventory is low and the supply is tight. Enterprises mainly supply core customers. On Tuesday, the price of methylcyclosiloxane (DMC) (East China) continued to rise by 7.7% to 35000 yuan / ton, and the price difference of DMC metal silicon methanol increased by 14.2% to 19544 yuan / ton.
Soda ash prices continued to rise. According to Baichuan and Longzhong information, in terms of supply, Jiangsu Shilian was added this week and resumed work from the 21st; Tianjin Bohua Chemical Co., Ltd. and Shandong Haitian Chemical Co., Ltd. increased production. This week, the supply of soda ash market increased, and the overall operating rate of the industry continued to decline by 0.80pcts to 76.95%. In terms of demand, the demand for soda ash in China was relatively stable this week; After the festival, the start-up of glass enterprises changed little, and the demand for heavy alkali was relatively stable; The demand for soda ash in the downstream industries of light alkali, such as daily glass, pyrosulfite, bubble alkali, disodium bicarbonate, metallurgy, printing and dyeing, water treatment and so on, is acceptable. This week, the price of soda ash (heavy, East China) is 2800 yuan / ton (mom + 1.8%), and the price of soda ash (light, East China) is 2600 yuan / ton (mom + 0.8%); The price difference between soda ash, raw salt and power coal increased by 0.7% to 1541 yuan / ton.
Tight supply and demand combined with cost support, and the prices of cathode materials such as lithium iron phosphate cathode materials continued to rise.
Lithium iron phosphate: according to Baichuan information, in terms of demand, the production and sales of new energy vehicles remain strong, the demand for lithium iron phosphate continues to improve, and the demand of energy storage market is also good. In terms of supply, the output of lithium iron phosphate continued to increase this week, but the current weather is still relatively cold, which has an impact on the extraction of lithium at the end of the salt lake, and the tight supply of lithium carbonate is difficult to ease. Therefore, some lithium iron phosphate manufacturers still have a shortage of upstream raw materials, but it has eased compared with before. The operating rate of lithium iron phosphate industry this week was 106% (unchanged month on month and adjusted back last week). In terms of raw materials, the price of lithium carbonate continued to rise, supporting the cost of lithium iron phosphate cathode materials. This week, the price of lithium carbonate (battery grade, Jiangsu) was 480000 yuan / ton (mom + 9.1%), and the price of lithium iron phosphate cathode material continued to rise by 11.9% to 160000 yuan / ton.
Ternary materials: according to Baichuan information, in terms of demand, the current demand for new energy vehicles downstream of ternary materials is improving, but at present, due to the high price, the new orders of ternary materials enterprises remain stable. In terms of supply, the output of Yuan materials on Wednesday was flat compared with that of last week, and the overall operation situation was relatively stable. The operation rate of ternary materials industry was 92%, which was flat month on month (retrospective adjustment last week). The market prices of lithium carbonate and lithium hydroxide at the raw material end continued to rise, supporting the cost of ternary materials. This week, the price of lithium hydroxide (battery grade, Sichuan) was 416000 yuan / ton (mom + 13.7%, caliber adjustment), the price of ternary cathode material (523) was 329500 yuan / ton (mom unchanged), and the price of ternary cathode material (811) was 354500 yuan / ton (mom unchanged).
The supply of tetrachloroethylene decreased, the demand was good, and the price rose. In terms of supply, the supply of tetrachloroethylene industry is tight. Due to the overseas epidemic, the inbound volume of imported goods is limited. According to Baichuan information, the construction of mainstream factories in China was stable this week, and the overall construction load was about 80%. In terms of demand, the current is the traditional peak export season for downstream refrigerants, and the domestic trade demand is also gradually recovering. The operating rate of downstream refrigerant R125 manufacturers has increased and the purchase of raw materials has increased. The price of vinyl chloride (East China) rose 44.4% to 13000 yuan / ton on Thursday.
The supply of yellow phosphorus in the upstream is tight, the demand for downstream products is good, the price of phosphorus chemical industry chain rises, and the heavy snow in Yunnan causes force majeure of the plant, and the supply of yellow phosphorus decreases. In terms of supply, Yunnan, the main production area of yellow phosphorus, suffered from line failure due to heavy snow this week, and some yellow phosphorus production enterprises stopped production for maintenance, resulting in a decline in supply. In terms of demand, the downstream demand for yellow phosphorus is strong, and the downstream enterprises are very active in procurement and order inquiry.
The downstream enterprises started at a high level and had a good demand for yellow phosphorus. At present, the shipment of yellow phosphorus enterprises is smooth and new orders are sufficient. At present, enterprises mainly supply early orders. This week, the price of yellow phosphorus (Guizhou) rose 14.1% to 36500 yuan / ton.
The downstream demand for phosphorus trichloride is strong and the price rises. On the supply side, due to the sharp rise in the price of raw material yellow phosphorus, some phosphorus trichloride enterprises suspended receiving orders and mainly sent Chinese orders. In terms of demand, the demand for downstream flame retardants and glyphosate is good, and the overall demand for phosphorus trichloride is good. In addition, the price of yellow phosphorus supports the price of phosphorus trichloride. On Wednesday, the price of phosphorus chloride (99%, Jiangsu) rose 13.7% to 10800 yuan / ton.
The demand for spring ploughing is improving, and the price of monoammonium phosphate is rising. In terms of supply, according to Longzhong information, the operating rate of monoammonium phosphate industry this week was 58.45%, down 0.25 PCTs month on month. This week, the monoammonium phosphate units in guoshute, North Lake and West Yichang were shut down for maintenance. In terms of demand, the downstream spring ploughing was started, the downstream compound fertilizer enterprises started to improve, and the orders to be issued by the enterprises were scheduled to the middle of March. The demand of the phosphate fertilizer industry was good. This week, the price of monoammonium phosphate (55% powder, Jiangsu) increased by 1.6% to 3100 yuan / ton.
China’s potash supply continued to be tight, and salt lake group raised its official quotation. In terms of supply, according to Baichuan information, at present, China’s potash enterprises are starting to improve, but the inventory remains low. In terms of imported potash fertilizer, the port arrival volume is limited, and the border trade arrival volume is less. China’s overall supply is insufficient. In terms of demand, with the start of spring farming in China, the operating rate of downstream compound fertilizer has increased, the demand for potassium chloride has increased, and the tightening of supply and demand has driven up the price. Salt Lake Group announced the official price in February, and the official quotation for the arrival price of its benchmark product was 3900 yuan / ton, an increase of 410 yuan / ton over the previous month.
BDO industry has many maintenance devices, the supply decreases and the price increases. In terms of supply, this week, Henan Kaixiang, Shaanxi bideo and Xinjiang Xinye maintenance industry saw a decline in industry supply and tight spot supply in the market.
In terms of demand, the downstream demand is stable, and the downstream enterprises maintain contract procurement. BDO enterprises in production have a smooth shipment and low inventory. At present, they mainly focus on contract order delivery, and the signing of new orders is limited. This week, the price of BDO (East China) increased by 3.5% to 28200 yuan / ton.
Terminal demand gradually recovered and DMF prices rose. In terms of supply, the production of mainstream enterprises such as Hualu and Luxi is stable, the production load of Shaanxi Xinghua is reduced due to steam problems, the maintenance of Henan Junhua plant is continued, and the industry supply is reduced. In terms of demand, the demand in the terminal market recovers, the downstream slurry enterprises start higher, and the demand for DMF is better. Downstream electronic and pharmaceutical enterprises purchase on demand, and the demand is stable.
The price of DMF (East China) rose 1.8% to 16800 yuan / ton this week.
Under the background of “double carbon”, new energy and new materials welcome rapid development:
(1) for traditional bulk chemicals, “double carbon” has a huge impact on supply: in the long run, it will accelerate the optimization of the supply side, concentrate the production capacity to the leader, and further deduce the industrial trend of “the strong is always strong”; In the short term, the centralized production restriction caused by the “power shortage” and “double carbon” goals may be relaxed, the supply of subdivided fields may be relaxed, and the fine products and products may benefit from the decline of raw material prices.
(2) the demand for new energy, high-end manufacturing and high value-added new materials is expected to grow significantly with the encouragement of policies. The “double carbon” goal will bring major changes to China’s industry. Driven by policies, the new energy industry chain is expected to grow rapidly with the downstream demand; On the other hand, in recent years, the uncertainty of Global trade has increased, superimposing the requirements of high-quality economic development under the background of “double carbon”, and some key materials in China welcome domestic substitution.
(3) under the background of industry boom differentiation, the supply and demand pattern of some sub industries will continue to improve, especially in some sub sectors where the demand affected by the epidemic has not been repaired and the upstream and downstream construction is limited due to the “one size fits all” energy consumption dual control policy in some regions, or will usher in profit restoration in the post epidemic period.
Investment strategy: under the background of “double carbon”, the industry has been facing changes, starting with three main lines to grasp the investment opportunities of the chemical industry in 2022.
(1) the strong will continue to strengthen, lock in the industrial pattern and reshape the key forces. With stricter safety and environmental protection and clear “double carbon” objectives, the moat of leading enterprises with integration, large-scale and low-cost advantages continues to strengthen: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , China Jushi Co.Ltd(600176) and privatization targets.
(2) industry differentiation, select industry profits and welcome repair. The weakening of the impact of the epidemic has led to better demand, and the tight balance between supply and demand in the industry remains unchanged; The impact of power and production restriction on the operating rate is expected to weaken, the price of upstream raw materials will fall, and the enterprise profit will be thickened. Focus on polyester filament and other chemical fiber products, tires, catalytic materials and other automotive industry chain chemicals.
(3) the trend of industrial transformation promotes the growth opportunities of new materials. Under the background of “double carbon”, when the energy revolution is going on, the general trend of photovoltaic and electric vehicle industry is highly deterministic; Industrial trends such as import substitution bring growth opportunities for relevant sub industries.
Among the heavy positions held by 21q3 actively managed public funds, the market value of basic chemical positions accounted for 7.17% (QoQ + 2.50 PCT), and the free circulation market value of all A-share basic chemical accounted for 5.93% (QoQ + 0.96 PCTs). In contrast, the proportion of heavy positions in the basic chemical sector has exceeded its market value, and the proportion of the basic chemical sector allocated by public funds has reached the highest level since 2009.
Continue to grasp the three core main lines and Nuggets’ investment opportunities in the chemical industry in the second half of 2021.
(1) the medium and long term will continue to focus on the key forces for reshaping the industrial pattern: the development stage of China’s chemical industry is prone to fundamental changes since the supply side reform in 2016. In the context of stricter safety and environmental protection, the competitive advantage of leading enterprises has been continuously highlighted. With the clear goal of “double carbon”, the trend of the strong and the strong in the chemical industry has been further established, and the moat of leading enterprises with integration, large-scale and low-cost advantages has been continuously strengthened. Focus on: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , China Jushi Co.Ltd(600176) and private refining and other chemical core assets.
(2) the central line embraces the general trend of industrial development, and some new material tracks usher in historic opportunities: as an important link connecting upstream resource products and downstream manufacturing, the chemical industry covers various fields such as high-end manufacturing, cutting-edge technology and people’s livelihood consumption. At present, the development of global economy and the transformation of industry have brought historic opportunities for relevant chemical materials, embracing the three main lines of new industrial development trends, new opportunities for global industrial chain reconstruction and new demand for consumption upgrading. Focus on: enjoy the global wave of automotive electrification – lithium battery materials (four major battery core main materials and related auxiliary materials, etc.); The golden age of photovoltaic industry under the new energy revolution – photovoltaic materials (module materials and auxiliary materials, etc.); Under the background of anti globalization, the key materials of “neck” accelerate the opportunity of domestic substitution – semiconductor materials; New demand for products under the background of consumption upgrading – food additives, etc.
(3) grasp the high prosperity of chemicals caused by the gap between supply and demand in the short term: start from both ends of supply and demand, and select high prosperity chemicals with continuous tight balance between supply and demand. On the demand side, its downstream demand is either driven by the general trend of the industry, or boosted by the recovery of the terminal field from the bottom of the epidemic, or driven by the policy stimulus under the background of overseas easing, and the overall demand continues to improve. On the supply side, the flexibility of the original capacity has reached the limit, the time for the new capacity to be put into operation has not come, and the immediate new increment is limited, resulting in a tight balance between supply and demand of chemicals. Some products are affected by “dual control of energy consumption”, and the supply side has been greatly reduced, resulting in tighter product supply and demand, and the profit is expected to continue to be high. Focus on: MDI, titanium dioxide, PVC, acrylic acid, ester and other chemicals related to the real estate (post) cycle industrial chain; Agricultural chemicals with a sharp increase in demand for urea and phosphate fertilizer against the background of rising prices of global crops such as grain; Polyester filament, DMF, acetic acid and other textile and clothing industry chain chemical fiber products; Some chemicals with better supply and demand pattern, such as upstream materials of new energy, silicon chemical industry and fluorine chemical industry.
Focusing on the following: ‘ Wanhua Chemical Group Co.Ltd(600309) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\, Rongsheng Petro Chemical Co.Ltd(002493) , Lier Chemical Co.Ltd(002258) , Valiant Co.Ltd(002643) , Hangzhou First Applied Material Co.Ltd(603806) (jointly covered by Xingzheng Dianxin group), Shenzhen Capchem Technology.Ltd(300037) , Jiangsu Yoke Technology Co.Ltd(002409) , etc.
Risk warning: the risk that the demand for chemical products does not meet expectations, the risk of sharp decline in international oil prices, and the risk of ineffective implementation of environmental protection
