The prices of many products fell. On the other hand, the attention of semiconductors and new energy materials continues to increase.
Industry trends:
Among the 101 chemical varieties tracked this week, the prices of 31 varieties rose, 36 varieties fell and 34 varieties remained stable. The top five varieties were pure benzene, WTI crude oil, DMF, dichloromethane and styrene; The top five varieties of decline were propylene oxide, vinyl acetate, R134a, soft foam polyether and urea.
WTI crude oil closed at US $77.0/barrel this week, and the closing price rose by 4.34% this week; Brent crude oil closed at US $79.3/barrel, closing up 4.18% this week. This week, US crude oil inventories continued to decrease, strategic crude oil reserve (SPR) fell to an all-time low, and crude oil prices rose. As of the week of December 24, the U.S. crude oil depot had decreased by 3.576 million barrels, or 0.84%, for five consecutive weeks. US strategic crude oil reserve (SPR) inventory fell to the lowest level since November 2002. Meanwhile, a new round of OPEC + meeting will be held on January 4, and there is no production increase plan for the time being. In terms of demand, many countries said that Omicron patients were mostly mild, and the market’s concerns about the impact of the epidemic gradually eased. In the future, there is still uncertainty in the Iranian nuclear negotiations and the future epidemic, and the oil price may be dominated by high shocks.
Metal silicon closed at 217000 yuan / ton this week, with a weekly average price decrease of 2.52%; Organosilicon (methylcyclosiloxane) closed at 258000 yuan / ton, with a weekly average price increase of 4.39% and a price difference increase of 8.5%. According to the data of Baichuan Yingfu, China’s silicone production is expected to be 29700 tons this week, down 2.62% month on month. Hubei Xingfa is currently shutting down the whole line for maintenance. It is expected to restart around January 10, and the production of Dow Zhangjiagang silicone unit will resume within a week. This week, China’s Silicone factory inventory was 17600 tons, down 6.88% month on month. On the demand side, the fear of rising in downstream enterprises is generally superimposed on the pre holiday stock demand, and the enterprise procurement enthusiasm is still high. In the future, under the background of tight supply of silicone, there is strong demand at the end of the year, and there is still room for short-term rise; In the long run, after the pre holiday stock demand is met, some new silicone production capacity will be put into operation in the first quarter of 2022, and the silicone price may stabilize.
PTA (East China) closed at 6500 yuan / ton this week, with a weekly average price increase of 3.84% and a price difference increase of 3.9%. PTA prices rose this week due to the support of crude oil costs. According to the data of Baichuan Yingfu, the PTA operating rate closed at 76.5% this week. There was no change in PTA unit during the week. Due to the restart of PTA plants last week, the supply increment of PTA market was obvious. In terms of demand, the polyester construction in the downstream showed an overall upward trend during the week, with strong willingness to prepare goods in the downstream and sufficient orders. In terms of polyester filament, due to the pressure of shipment and cost, polyester filament enterprises carried out sales promotion, and the market rose and fell. In the future, PTA cost side support may still last for some time, but the space to continue to rise after the festival may be limited.
Investment suggestions:
This month’s view:
Cyclical industries: the price fluctuation of subdivided products increases. As of December 31, the prices of only 14% of the tracked products had increased month on month; 71% of product prices fell month on month, accounting for 11% with a decline of more than 20%; Another 15% of the product prices were flat. As of December 31, WTI crude oil price fell 7.8% month on month and Brent crude oil price fell 7.6% month on month. Industry data: the PPI index of the chemical industry in November was 119.1, down 0.6% from October. Since December, the overall price of raw materials has continued to decline, and the operating rate of some enterprises in Zhejiang has been limited by the epidemic. The central economic work conference was held in Beijing from December 8 to 10. The conference pointed out that raw material energy consumption is not included in the total energy consumption control, and some coal chemical enterprises usher in development opportunities. Long term optimistic about the development of leading companies in the context of carbon neutrality.
Growth companies: the price of new material products remains high. Compared with the general correction of the price of bulk chemicals, the price of new materials such as EVA / DMC / NMP / PVDF / metal silicon / metal lithium remained high in December. For example, the price of battery grade lithium carbonate has exceeded 280000 yuan / ton, with an average monthly price increase of 19%. On the other hand, China’s semiconductor material industry is in a period of rapid development, localization and substitution are continuously promoted, and China’s new production capacity can not meet the demand. 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 January, most chemical prices are still facing correction pressure due to the impact of oil price and demand. From the perspective of sub industry prosperity, pesticides, 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 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 stocks: Wanhua Chemical Group Co.Ltd(600309) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Rongsheng Petro Chemical Co.Ltd(002493) , Zhejiang Nhu Company Ltd(002001) , Zhejiang Huangma Technology Co.Ltd(603181) , Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Lianhe Chemical Technology Co.Ltd(002250) , Lier Chemical Co.Ltd(002258) , 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.
January gold shares: Valiant Co.Ltd(002643)
Risk statement
1) Changes in geopolitical factors lead to sharp fluctuations in oil prices; 2) The global epidemic situation has changed.
