Key investment points
Recent views:
The overall oil price rose sharply, but due to the smooth transmission of commodity prices, the impact of high oil prices on refining and chemical enterprises may be relatively limited. Generally speaking, at present, refineries can be roughly divided into two departments: oil refining and chemical industry:
The products of the oil refining department mainly include gasoline, diesel, aviation kerosene, naphtha, LPG, etc; The products of the chemical sector mainly include aromatics, olefins and downstream products.
In terms of refined oil, under the background of marketization, the transmission of crude oil cost to gasoline, diesel and kerosene is smooth. From the perspective of the international market, the profit level of each category of refined oil is only related to the supply and demand pattern of the product itself, but has nothing to do with the absolute level of crude oil price. At present, China is a market-oriented pricing mechanism regulated by the government, and the after tax prices of gasoline and diesel products are close to the international market prices. Excluding the lag effect of the price adjustment window period, although under the background of the current oil price range, the price difference between the ex factory price of China’s main refineries and crude oil has narrowed compared with the price difference between the international market price and crude oil, from the perspective of China’s market price, the high oil price has not had a significant impact on the oil price difference of finished products, and the crude oil cost has been transmitted relatively smoothly.
In terms of chemicals, the cost transmission of main products is relatively smooth, and its profitability is determined by the supply and demand pattern. By comparing the high oil price period with the low oil price period in history, we found that there is no obvious correlation between the product price difference level and the absolute level of oil price. The price transmission of various chemicals is relatively smooth, and the price difference mainly depends on the supply-demand relationship of various products.
During the period when the oil price rose sharply in the early stage, the valuation of private refining enterprises and downstream polyester filament enterprises was impacted to a certain extent, and the current valuation is close to the bottom range; At the same time, the profits of the main products of the refining and chemical project are also in the bottom range, that is, the company is at the bottom of the industry and the bottom of performance. On the whole, private refining enterprises and downstream polyester filament enterprises have a certain margin of safety. It is recommended that Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Tongkun Group Co.Ltd(601233) , Xinfengming Group Co.Ltd(603225) .
In addition, the oil head substitution routes of some products, such as ethane cracking to ethylene and coal to olefin, have recently benefited from the rising product prices, while the correlation between raw materials and crude oil is relatively weak, and the price difference has also expanded, which may benefit relevant enterprises. Recommended Ningxia Baofeng Energy Group Co.Ltd(600989) , satellite chemistry.
The top five petrochemical products with price increase this week: butadiene (East China), 14.94%; MTBE (Yantai Wanhua), 11.26%; Butanone ( Zibo Qixiang Tengda Chemical Co.Ltd(002408) East China), 6.56%; China LNG (North China Yigao), 6.52%; Alkylated gasoline (Binzhou Dayou), 5.92%.
Petrochemical products with the top five price declines this week: natural gas Henry hub futures, – 6.88%; WTI futures, – 6.85%; Brent futures, – 5.72%; Naphtha: CFR Japan, – 4.36%; Propane (CIF frozen price in East China), – 3.73%.
The top five petrochemical products with price difference increase this week: propylene propane, 160.84%; Ethylene naphtha, 44.96%; Pet (bright) – raw material, 39.49%; PTA-PX，29.28%； Polyester filament POY raw material, 28.01%.
Petrochemical products with the top five price difference decreases this week: petrochemical products with the top five price difference decreases this week: ethylene glycol ethylene, – 54.45%; Pet (semi gloss) – raw material, – 38.06%; Maleic anhydride C4, – 12.55%; Adipic acid – pure benzene – nitric acid, – 2.26%; Methyl acrylate acrylic acid, – 2%.
The conflict between Russia and Ukraine continues to dominate the sharp fluctuation of international crude oil prices. This week, crude oil prices rose first and then fell. Earlier this week, driven by the expectation of sanctions against the Russian oil and gas industry, the US President Biden said he would ban the import of Russian crude oil, and the UK said it would gradually stop the import of Russian crude oil by the end of this year, the international crude oil price soared. However, on March 9, Ukraine said that the neutral status was negotiable. On the same day, the ambassador of the United Arab Emirates to the United States issued a statement “in favor of increasing production, which will encourage OPEC to consider increasing production”. The market’s concern about supply weakened, and the international crude oil price entered a downward channel from the same day. As of March 11, 2022, the settlement price of WTI futures this week fell by 6.8% to US $107.76/barrel compared with last week; The settlement price of Brent futures fell 5.7% to US $111.35/barrel compared with last week.
As of March 4, 2022, the US commercial crude oil inventory decreased by 1.863 million barrels to 412 million barrels month on month compared with last week; The US strategic crude oil inventory decreased by 2.524 million barrels to 577 million barrels, gasoline inventory increased by 1.344 million barrels and distillate oil inventory decreased by 5.23 million barrels; In the week of March 4, 2022, the crude oil output of the United States was 11.6 million barrels per day, unchanged month on week; The average daily net processing volume of American refineries in the week was 15.377 million barrels, with a month on month decrease of 21000 barrels / day, and the gross processing volume was 15.967 million barrels / day, with a month on month increase of 63000 barrels / day. The operating rate of refineries was 89.3%, with a month on month increase of 2.2 PCTs Baker Hughes oil service data show that as of the week of March 11, 2022, the number of active oil wells in the United States increased by 8 to 527 from last week.
The supply of imported gas source decreased significantly and the price of LNG increased. On the supply side, according to the data of Longzhong information, China’s LNG output this week was 377000 tons (525.48 million m3), an increase of 14.74% month on month; China’s 10 terminals received a total of 14 LNG carriers, a decrease of 4 on a month on month basis, and the arrival volume was 942000 tons, a decrease of 28.39% on a month on month basis. On the demand side, China’s total LNG demand this week was 449000 tons, a month on month decrease of 59800 tons (- 11.75%). As of March 11, the ex factory price of LNG in China was 7350 yuan / ton, an increase of 450 yuan / ton compared with last week.
The price of PX fell, and the price difference of pta-px expanded. In terms of supply, according to the data of China National fiber network on March 11, 2022, the production of Yisheng new material was reduced by 3.6 million tons to half operation; Yisheng new material added 3.6 million tons of equipment, the load decreased to 50% – 60% on March 3, and increased to full load at the beginning of this week; Yisheng Ningbo 2 million ton unit was shut down for maintenance on February 10, 2022. It was originally scheduled to restart on February 24, but now it is postponed to near March 5 The load of Xinjiang Zhongtai Chenical Co.Ltd(002092) 12 million ton unit will be reduced to 80% during the Spring Festival and is expected to remain until the end of April; The 2.25 million ton unit of yishanhua was shut down for maintenance on February 24 and restarted on March 10; The 1.2 million ton unit of hailun Petrochemical operates normally and is scheduled to be overhauled for 15 days in mid May; The load of Fuhua 4.5 million ton unit decreased to 80% at the beginning of March, and may further decrease in the future; Yizheng 350000 ton chemical fiber plant was shut down for maintenance on March 1, 2022, tentatively for 20 days The Hengli Petrochemical Co.Ltd(600346) 2.25 million ton unit was shut down for maintenance on March 10 and temporarily maintained for 20 days; ChuanHua energy invested 1 million ton unit, which was shut down for maintenance on March 6 and is expected to restart early next week; Dushan energy’s 2.2 million ton unit is planned to be overhauled for 8 days in mid March. The total capacity of PTA industry this week was 73.185 million tons. This week, PTA maintenance capacity is about 15.896 million tons, long-term shutdown capacity is 5.25 million tons, the actual production capacity is 52.039 million tons, and the operating rate of production capacity is 79.62%. As of March 11, China National fiber network data showed that PTA circulation inventory was 2.043 million tons, a decrease of 112000 tons compared with last week. The price of PX (imported CFR) was US $1258 / ton, a decrease of US $13 / ton compared with last week. The price of PTA in East China fell by RMB 6095 / ton last week; The price difference of pta-px (imported CFR) was 202 yuan / ton, an increase of 46 yuan / ton compared with last week.
