The full-scale conflict between Russia and Ukraine broke out, crude oil prices rose sharply, and bulk commodities generally rose. 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, 30 varieties fell and 22 varieties remained stable. The top five varieties were naphtha, liquid chlorine, sulfuric acid, WTI crude oil and yellow phosphorus; The top five varieties of decline were aniline, bisphenol A, acetic anhydride, dichloromethane and acetic acid.
WTI crude oil closed at US $107.7/barrel this week, and the closing price rose 17.6% this week; Brent crude oil closed at US $110.46/barrel, closing up 12.8% this week. OPEC + still maintained its original small increase in production plan. The Russian Ukrainian war intensified concerns on the energy supply side, and oil prices rose sharply this week. According to EIA data, crude oil inventories decreased by 2.597 million barrels and are expected to increase by 2.287 million barrels in the week ended February 25. With the sharp rise in crude oil prices this week, OPEC + ignored the calls of consumer countries for increasing production. At the same time, the United States and Europe have increased financial sanctions against Russia, disconnected Russia from swift international settlement system, and Russian crude oil exports may be affected. In the future, the effect of Russian Ukrainian negotiations and the intensity of European and American sanctions may continue to dominate the trend of crude oil, the Iranian nuclear agreement has made a breakthrough, and Iran is expected to return to the crude oil supply market. However, under the market tension, the crude oil price may continue to rise in the short term.
Metal silicon prices continued to rise this week. According to Baichuan Yingfu data, the average market price of metal silicon closed at 23600 yuan / ton, with a closing price increase of 6.07%. Organosilicon (methylcyclosiloxane) closed at 37500 yuan / ton, with a closing price increase of 7.14%. The reason for the rise of metal silicon price this week mainly comes from the cost side. Xinjiang will implement power reform. After the increase of electricity price, the production cost of metal silicon may be significantly increased. In terms of supply, the start-up of enterprises in Xinjiang this week was stable, but the supply of some enterprises decreased slightly due to the reduction of load production due to environmental protection inspection. In terms of demand, the situation that the supply of organosilicon in the downstream is in short supply has not been alleviated, and the continuous launch of new organosilicon production capacity is expected to drive the demand for metallic silicon. In the future, under the general rise of raw materials, the production cost of metal silicon may continue to rise to support the price. The demand for silicone abroad is strong, and it will take some time for the new production capacity to climb, and the price is expected to remain high.
The price of pure MDI rose significantly this week. According to the data of Baichuan Yingfu, the aggregate MDI (East China) closed at 19700 yuan / ton, and the closing price fell by 2.96% this week; Pure MDI (East China) closed at 24800 yuan / ton, with a weekly closing price increase of 4.2%. MDI units in China are in normal operation this week, and the overall supply is stable; BASF plant in overseas South Korea operates at low load, and Jinhu plant is expected to be overhauled in the second quarter, and the supply may be reduced. In terms of pure MDI, the supply of barreled goods is not sufficient, the rise of raw material prices supports the further rise of prices, and the US dollar offer has greatly pushed up. In the future, the peak season of MDI demand has not yet come, and there may still be room for a slight reduction in the aggregate MDI price. The supply of pure MDI is relatively tight, and the price may remain high.
Investment suggestions:
This week’s view
Cyclical industries: crude oil hit new highs, and more than half of chemical products returned to the rising trend: as of February 20, 2022, the monthly average price of 52% of the tracked products rose month on month; The average monthly price of 37% of products fell month on month; In addition, the price of 11% products was flat. As of March 4, 2022, the average price of WTI crude oil rose by 12.25% month on month, and the price of Brent crude oil rose by 12.07% month on month. Industry data: the PPI index of the chemical industry in January 2022 was 113.6, down 1.56% from December 2021. In terms of policy, the 14th five year plan for the pesticide industry was released, pointing out the need to optimize the layout of pesticide production, improve industrial concentration and adjust product structure; China’s potassium fertilizer contract was implemented. The import price of standard potassium chloride in 2022 was US $cfr590 / ton, with a year-on-year increase of 139%. The high price of upstream raw materials, high production costs such as power coal, and price transmission and profit differentiation of midstream products. Long term optimistic about the development of leading companies in the context of carbon neutrality.
Growth companies: the price of lithium carbonate continues to rise: as of March 4, 2022, the quotation of battery grade lithium carbonate has exceeded 500000 yuan / ton. In terms of semiconductor materials, Ukraine is an important global supplier of neon gas, and the geopolitical situation may cause tension in the supply of some kinds of electronic gas. Benefiting from the rapid development of downstream new energy vehicles, photovoltaic, semiconductor and other industries, the supply of some new materials in the upstream is tight or will become the norm.
Investment suggestion: looking forward to March, under the geopolitical tension, the prices of bulk chemicals have been strongly supported, and the prices of some chemicals may return to the upward trend. From the perspective of sub industry prosperity, upstream petrochemical refining, Shenzhen Agricultural Products Group Co.Ltd(000061) related agrochemicals, 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 shares: followinga series of shares to recommend a series of shares: followinga Wanhua Chemical Group Co.Ltd(600309) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ 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.
Gold shares in March: Wanhua Chemical Group Co.Ltd(600309)
Risk tips
1) large fluctuations in oil prices caused by changes in geopolitical factors; 2) The global epidemic situation has changed.
