Talk every Monday:
Since the beginning of March, the price of PVC has rebounded by more than 6%, and the chlor alkali industry shows signs of bottom recovery. The last business cycle can be traced back to the beginning of last year, but after the steep fall in prices in the fourth quarter, the chlor alkali industry fell into a downturn, which also dragged down the sharp correction of the share prices of relevant companies. We believe that benefiting from the support of raw material prices and the improvement of the demand of the industry itself, this round of PVC price rebound is expected to continue, and industry leaders such as Xinjiang Zhongtai Chenical Co.Ltd(002092) , Xinjiang Tianye Co.Ltd(600075) are expected to benefit.
The price of raw calcium carbide rebounded at the bottom. Calcium carbide industry is a high energy consuming industry, which is strictly limited by the dual control policy of energy consumption. The policy will directly affect the operating rate of calcium carbide industry, and then affect the price of calcium carbide. In the long run, the “14th five year plan” is a critical and window period for achieving carbon peak. The dual control policy on energy consumption is expected to be further tightened, and the exit of backward production capacity is expected to be accelerated in the future. However, the smooth implementation of new production capacity is still in doubt due to the increase of industry access threshold. The tight supply situation of calcium carbide industry is expected to be maintained for a long time, which will promote the gradual upward shift of price focus and support the price of PVC.
Advance infrastructure construction to promote continuous improvement of demand. The downstream demand of PVC is mainly in the fields of pipes, profiles and sectors, of which pipes and profiles account for about half, which has a strong correlation with real estate infrastructure. According to the government work report released in early March, infrastructure investment will be moderately advanced in 2022, key water conservancy projects will be built, and the renewal and transformation of urban gas pipelines and other pipe networks will be accelerated, which will further stimulate the demand for PVC. In addition, the terminal data can also reflect the overall improvement of the demand side. Since March, the operating rate of PVC downstream products enterprises has picked up, and most products enterprises have returned to the normal level. Among them, the operating rate of sample enterprises is about 60%, basically the same as that of the same period last year, which also drives the inflection point of PVC social inventory.
Investment strategy: under the policy background of dual control of energy consumption, the price of raw materials such as calcium carbide is expected to strengthen, the cost side support reappears, superimposed on the strong demand outside China, the focus of PVC price is expected to move up, and relevant leaders are expected to continue to benefit from this round of PVC market, of which Xinjiang Zhongtai Chenical Co.Ltd(002092) owns about 1.8 million tons of PVC and 2.38 million tons of calcium carbide, and acquired MEC chemical at the beginning of the year, further improving the industrial chain. At the same time, the company’s production capacity is located in Xinjiang, In the past few years, energy consumption in Xinjiang has been well controlled and less affected by the dual control policy of energy consumption. Therefore, we suggest to pay attention to the industry leaders of Xinjiang Zhongtai Chenical Co.Ltd(002092) , Xinjiang Tianye Co.Ltd(600075) and other industries with the advantages of scale and integration.
Market review:
Sector performance: this week, CITIC’s basic chemical sector fell 1.9%, and the composition of the Shanghai Composite Index fell 1.84%. Compared with the Shanghai Composite Index in the same period, the basic chemical sector fell 0.06 percentage points behind. In terms of sub sectors, the basic chemical sub sector mainly fell this week, with carbon fiber, lithium chemicals, electronic chemicals, fluorine chemicals, civil explosives and other sub sectors leading the increase; Composite fertilizer, spandex, polyurethane, nitrogen fertilizer, phosphorus fertilizer and phosphorus chemical industry led the decline.
Rise and fall of individual stocks: the basic chemical sector led the rise of individual stocks this week, including North Chemical Industries Co.Ltd(002246) , Shenzhen Rongda Photosensitive & Technology Co.Ltd(300576) , Hubei Heyuan Gas Co.Ltd(002971) , Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) , Yunnan Energy Investment Co.Ltd(002053) , etc; Stocks leading the decline include jusailong, Guangxi Hechi Chemical Co.Ltd(000953) , Jiangsu Yida Chemical Co.Ltd(300721) , Hubei Forbon Technology Co.Ltd(300387) , Ningxia Baofeng Energy Group Co.Ltd(600989) , etc.
Risk tips: the risk of fluctuations in international oil prices, the risk of repeated global epidemics, etc.
