Core view
1. Last week, the international price of potash fertilizer reached a new high. According to wind data, as of March 10, 2022, the FOB prices of potassium chloride in Vancouver, northwest Europe and Israel were US $621.5, 684.5 and 701.0 / ton respectively, up 4.6%, 8.7% and 6.8% respectively, up US $27.5/ton, US $54.5/ton and US $44.5/ton respectively compared with March 1. The recent rise in the price of potash fertilizer is mainly due to two factors: supply and demand. At present, the global supply risk has increased significantly. According to the financial Associated Press, on March 10, Russian industry minister manturov announced that Russia decided to temporarily suspend the export of chemical fertilizer. In 2020, Russia’s export volume of potassium chloride accounted for 19% of the total global export trade. Previously, the export of Belarusian potash fertilizer has been banned, which once caused global supply tension. Russia announced the suspension of potash fertilizer exports, further raising the global supply risk, and about 40% of the global potash fertilizer supply will be affected. The price of potash fertilizer has supported the price rise. The prices of wheat / bushel and corn / bushel were the highest of 762.5 cents and 1102.5 cents respectively as of November 2023, according to the settlement data of CBD / bushel. With the advent of spring ploughing in the northern hemisphere and the release of demand, the downstream demand side plays a supporting role in the high price of potassium fertilizer. The tight international supply pattern is difficult to ease, and the price of potassium fertilizer may continue to rise. According to the current situation, the impact of the geopolitical crisis on the supply pattern of potash fertilizer is further increased, and the mismatch between global potash fertilizer supply and demand may intensify. Meanwhile, the downstream demand is in the growth stage, and we expect the price of potash fertilizer to continue to rise.
2. As of March 11, 2022, the price index of China’s chemical products reported 5908 points, up 3.2% on a weekly basis. Chemical products rose or fell, with acetic acid up 39.9% and caustic soda (96% flake soda) down 7.8%. In terms of acetic acid, the main reason for the price rise is the large increase in its cost side, which is superimposed on the fact that many production enterprises have maintenance plans at the end of March, and the news of tightening at the supply side is released; In terms of caustic soda, the price decline last week was mainly due to the inventory pressure of some caustic soda enterprises and the slowing demand of downstream alumina enterprises.
3. Over the past week, the price of thermal coal has fallen sharply. As of March 11, 2022, the settlement price of the main continuous futures of China Shipbuilding Industry Group Power Co.Ltd(600482) coal was 849 yuan / ton, down 11.9% on a weekly basis. The decline of thermal coal was mainly affected by macro policy factors. Although in terms of supply, affected by the safety inspection, the coal supply is slightly tight; At the same time, the international coal price remains high due to the Russian Ukrainian incident, and the recent import volume is small. However, in the macro aspect, based on the national conditions, the national development and Reform Commission has repeatedly emphasized the supply guarantee policy, discussed with relevant units and relevant regions the work of stabilizing coal production and increasing production, helped the chief to stabilize coal prices, and some large state-owned enterprises strictly implemented price limits.
4. Market review. Last week, among the 33 tertiary sub industries of CITIC chemical, 2 sectors rose or remained flat and 31 sectors fell. Among them, phosphorus fertilizer and phosphorus chemical industry sector increased the most, with an increase of 2.4%; Rubber products sector fell the most, down 6.1%. In terms of individual stocks, the top three weekly gains were Yunnan Energy Investment Co.Ltd(002053) , Zhejiang Dayang Biotech Group Co.Ltd(003017) , Elion Clean Energy Company Limited(600277) , with weekly gains of 61%, 29.6% and 20.7% respectively; The top three weekly declines were Bluestar Adisseo Company(600299) , Aofu Environmental Technology Co.Ltd(688021) , Guizhou Redstar Developing Co.Ltd(600367) , with weekly declines of 18%, 17% and 15.7% respectively.
Investment advice
Under the continuous prosperity of potash fertilizer industry, relevant targets may benefit, such as Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Qinghai Salt Lake Industry Co.Ltd(000792) , Zangger mining, Qingdao East Steel Tower Stock Co.Ltd(002545) , etc.
Risk tips
Geopolitical changes, changes in Russia’s fertilizer export policy, repeated overseas epidemics, exchange rate changes, etc.
