Talk every Monday:
Last week, the price of butadiene fell all the way to around 4500 yuan / ton, down more than 65% compared with the year’s high in August. As butadiene is the main raw material for the production of various synthetic rubber and various synthetic resins (ABS resin, SBS resin, etc.), the rise and fall of its price directly affects the cost of some chemicals.
The supply continues to increase. With the centralized operation of refining and chemical integration projects, the supporting butadiene units also increase. From 2017 to 2020, the production capacity of butadiene industry will maintain an annual growth trend, especially after 2020. According to the statistics of Longzhong information, in 2020, China’s butadiene capacity will increase by 830000 T / A, and the total capacity will reach 4.9 million T / A, an increase of 20% over 2019. In the first half of 2021, there was less production capacity, but the production was accelerated again in the second half of 2021. It is estimated that 680000 T / a butadiene unit will be put into operation in 2022, when the production capacity will reach about 6.4 million tons, and the supply pressure will increase unabated
Demand or affected. Synthetic rubber is its largest application field, in which cis-polybutadiene rubber and styrene butadiene rubber account for about half. However, the stricter dual control of energy consumption limits the operation of most downstream industries such as synthetic rubber, ABS, styrene butadiene and nitrile latex, which has a great impact on the demand side of butadiene. In addition, the holding of next year’s Winter Olympic Games will once again affect the downstream demand.
Investment strategy: with the centralized operation of refining and chemical integration projects, butadiene capacity expansion is expected to continue, while the implementation of energy dual control policy has a great impact on its demand side. The trend of weak butadiene price in China is difficult to change, the raw material procurement cost of relevant companies is expected to decline, and the performance in the fourth quarter is expected to improve. It is suggested to pay attention to leading enterprises in relevant fields such as Ningbo Changhong Polymer Scientific & Technical Inc(605008) and Sinopec that need to extract butadiene and have certain technical barriers
Market review:
Sector performance: this week, CITIC’s basic chemical sector fell by 2.6%, and the composition of the Shanghai Composite Index fell by 0.7%. Compared with the Shanghai Composite Index in the same period, the basic chemical sector fell by 1.9 percentage points. In terms of sub sectors, the basic chemical sub sector mainly fell this week, with pesticide, food and feed additives among the top gainers; Carbon fiber, phosphorus fertilizer and phosphorus chemical industry, spandex, lithium chemicals, soda ash 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) , Sichuan Lutianhua Company Limited(000912) , Shanghai Huide Science & Technology Co.Ltd(603192) , Xilong Scientific Co.Ltd(002584) , Zhejiang Xinnong Chemical Co.Ltd(002942) , etc; The leading stocks include Fengguang shares, Shenzhen Dynanonic Co.Ltd(300769) , Hubei Kailong Chemical Group Co.Ltd(002783) , Jiangxi Chen Guang New Materials Co.Ltd(605399) , Zhejiang Oceanking Development Co.Ltd(603213) , etc.
Risk tips: the risk of fluctuations in international oil prices, the risk of repeated global epidemics, etc.
