Key news tracking this week
The opening meeting of the fifth session of the 13th National People’s Congress was held at 9:00 on March 5 at the Great Hall of the people in Beijing. Xi Jinping and other party and state leaders attended the meeting. On behalf of the State Council, Premier Li Keqiang delivered a government work report to the fifth session of the 13th National People’s Congress. According to the government work report, China’s GDP is expected to grow by about 5.5% in 2022; In addition, we will promote carbon neutralization in an orderly manner and implement the action plan for carbon peaking. Promote the energy revolution, ensure energy supply, based on resource endowments, adhere to the first establishment and then destruction, and make overall plans to promote the low-carbon transformation of energy.
Price tracking comments on key products this week
WTI oil prices rose 26.3% this week to US $115.68/barrel.
Key injection sub industries: this week, ethylene glycol / silicone / calcium carbide PVC / pure MDI / solid methionine / viscose filament / VE / urea / DMF / spandex increased by 7.5% / 7.1% / 4.4% / 4.2% / 2.9% / 2.4% / 2.3% / 1.9% / 1.2% / 0.9% month on month respectively; Acetic acid / caustic soda / VA / polymerized MDI / viscose staple fiber / rubber / light soda ash / heavy soda ash / TDI decreased by 10.3% / 3.6% / 3.0% / 2.6% / 1.5% / 1.3% / 0.8% / 0.5% month on month respectively; The price of PVC / titanium dioxide / liquid methionine by ethylene method remains unchanged.
The top five sub industries that rose this week: WTI Futures (main contract) (+ 26.3%), international naphtha (Singapore) (+ 22.6%), CBOT wheat (+ 22.5%), liquid chlorine (Central China) (+ 21.2%), Brent Futures (main contract) (+ 20.6%).
Ethylene glycol: this week, China’s ethylene glycol market price hit the bottom and rebounded. Western sanctions boosted the decline of crude oil inventories in Russia and the United States. The international crude oil price continued to rise, the international price of naphtha soared sharply, the price of power coal operated smoothly, and the cost support continued to strengthen.
Organosilicon: this week, the organosilicon market continued to rise strongly. In addition to the cost assistance provided by the rise of raw metal silicon, the situation that the supply of goods in the market is in short supply obviously stimulated the outbreak of speculation among field operators. At present, the orders of silicone monomer enterprises have been arranged to the end of March. Due to the current low inventory, most of them have closed their sectors and stopped receiving new orders, and the overall inventory has remained at a low level. At the same time, the demand for silicone products in the foreign market is still strong, resulting in a shortage of goods in the Chinese market and the reluctance of the holders to sell.
Market performance of chemical sector this week
The basic chemical sector fell 2.4% compared with last week, and the Shanghai and Shenzhen 300 index fell 1.68% compared with last week. The basic chemical sector underperformed the market by 0.72 percentage points, ranking 27th in all sectors. According to Shen Wan’s classification, the basic chemical sub industries with large weekly increases include soda ash (+ 5.47%), synthetic leather (+ 4.52%), nitrogen fertilizer (+ 3.61%), viscose (+ 2.87%), and petroleum processing (+ 2.08%).
Key sub industry views
(1) many factors affect the 22-year prosperity of the sub industry. The overall profitability of the pesticide industry is expected to improve in the 22-year period when the cultivated land area is expected to increase, grain prices remain at a high level, China’s supply is orderly and prices rise in the fourth quarter. It is recommended that Jiangsu Yangnong Chemical Co.Ltd(600486) , Shandong Weifang Rainbow Chemical Co.Ltd(301035) , Anhui Guangxin Agrochemical Co.Ltd(603599) , Limin Group Co.Ltd(002734) ; The prosperity of the tire industry has bottomed out and the new energy field has brought development opportunities. It is suggested to pay attention to Sailun Group Co.Ltd(601058) , Qingdao Sentury Tire Co.Ltd(002984) . The boom of viscose industry is expected to reverse, and Tangshan Sanyou Chemical Industries Co.Ltd(600409) . (2) The demand economy is relatively weak, and the fields of semiconductor materials, military materials and other new materials are independent and controllable in the medium and long term; The chemical synthesis platform company Valiant Co.Ltd(002643) , and China’s private gas leading enterprise Suzhou Jinhong Gas Co.Ltd(688106) . (3) The downstream demand is stable, and great attention is paid to the subdivided fields such as photovoltaic, wind power, new energy and sugar substitutes; It is recommended that the leader of new energy functional materials Shenzhen Capchem Technology.Ltd(300037) , and the global leader of sweeteners Anhui Jinhe Industrial Co.Ltd(002597) . (4) The vertical and horizontal expansion of the leading enterprises has highlighted the advantages of integration, and the profit center is expected to rise; Focus on Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Zhejiang Nhu Company Ltd(002001) (jointly covered with the medical group).
Risk warning: risk of large fluctuation of crude oil price; Covid-19 epidemic leads to less demand than expected risk; Safety and environmental protection risks
