Key news tracking this week
The fifth session of the 13th National People’s Congress closed at the Great Hall of the people in Beijing on the morning of the 11th after successfully completing its agenda. The Congress approved the government work report and the work report of the Standing Committee of the National People’s Congress. The General Assembly adopted the decision on Amending the organic law of local people’s congresses and local people’s governments at all levels, and the president Xi Jinping signed Presidential Decree No. 110 to publish it. The Congress adopted decisions on the number and election of deputies to the 14th National People’s Congress, the measures for the election of deputies to the 14th National People’s Congress by the Hong Kong Special Administrative Region and the measures for the election of deputies to the 14th National People’s Congress by the Macao Special Administrative Region.
Price tracking comments on key products this week
WTI oil prices fell 5.5% this week to US $109.33/barrel.
Key injection sub industries: this week, acetic acid / urea / solid methionine / Organosilicon / TDI / calcium carbide PVC / ethylene PVC / heavy soda ash / light soda ash / ve increased by 31.4% / 6.7% / 4.7% / 4.0% / 3.2% / 3.1% / 2.6% / 1.7% / 1.4% / 1.1% respectively month on month; Caustic soda / pure MDI / DMF / VA / ethylene glycol / viscose staple fiber decreased by 7.4% / 2.4% / 1.8% / 1.1% / 1.0% / 0.8% month on month respectively; The price of polymerized MDI / rubber / titanium dioxide / liquid methionine / Spandex / viscose filament remained unchanged.
The top five sub industries of this week’s growth: acetic acid (East China) (+ 31.4%), urea (Baltic Sea, small grain bulk) (+ 20.4%), ethyl acetate (Shanghai Wujing) (+ 15.6%), butadiene (East China) (+ 15.1%), sulfur (solid, Shanghai Gaoqiao) (+ 14.9%).
Acetic acid: the market price of acetic acid rose sharply this week. Last week, the price of acetic acid was close to the cost line. This week, the methanol period is resonating upward, with a large increase in the cost side. In addition, the supply side is more, and enterprises have maintenance plans at the end of March. The good news is released in advance, the downstream mentality is loose, and traders take goods intensively. After centralized procurement this week, the high inventory situation in the early stage has been alleviated.
Urea (China price): before the new year’s Day holiday, the quotation of each plant is basically stable; After the holiday, there was a “rise” in China’s urea market, mainly due to the recovery of downstream compound fertilizer enterprises and the improvement of traders’ enthusiasm for taking goods. In addition, the news that Indonesia banned the export of thermal coal promoted the sharp rise of thermal coal futures price, which led to the rise of urea futures price and indirectly brought positive support to the urea spot market.
Market performance of chemical sector this week
The basic chemical sector fell 3.4% compared with last week, and the Shanghai and Shenzhen 300 index fell 4.22% compared with last week. The basic chemical sector outperformed the market by 0.83 percentage points, ranking seventh in all sectors. According to the classification of Shenwan, the basic chemical sub industry has a large weekly increase: phosphate fertilizer (+ 11.81%) and inorganic salt (+ 4.16%).
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
