Market Review
Last week, the basic chemical industry index fell 1.21%, the Shanghai and Shenzhen 300 index fell 0.94% in the same period, and the basic chemical industry index underperformed the market by 0.27 percentage points in the same period. The petroleum and petrochemical index fell 2.48%, underperforming the market by 1.54 percentage points in the same period. Among them, North Chemical Industries Co.Ltd(002246) (31.95%), Shenzhen Rongda Photosensitive & Technology Co.Ltd(300576) (22.21%), Hubei Heyuan Gas Co.Ltd(002971) (17.03%), Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) (16.70%), Yunnan Energy Investment Co.Ltd(002053) (15.63%) ranked among the top five; The companies with the top five declines are jusailong (- 22.68%), Guangxi Hechi Chemical Co.Ltd(000953) (- 21.54%), Jiangsu Yida Chemical Co.Ltd(300721) (- 19.08%), Hubei Forbon Technology Co.Ltd(300387) (- 15.96%), Ningxia Baofeng Energy Group Co.Ltd(600989) (- 14.87%).
Key investment points:
International crude oil: last week, international crude oil prices fell first and then rose. In the early part of the week, Russia and Ukraine showed their willingness to cease fire, the crude oil reserves of the United States increased, the output of OPEC + crude oil improved, and the market's concerns about the shortage of crude oil supply eased. At the same time, due to the rebound of the epidemic in some countries and regions, the short-term crude oil demand was restrained to a certain extent, and the crude oil price once fell back below 100 yuan. Later in the week, the Ukrainian Russian negotiations failed again. At the same time, the IEA said in the monthly report that Russia is expected to reduce oil production by 3 million barrels / day from April, which once again aroused the market's concern about the shortage of energy supply, and the oil price rose again and returned to the 100 yuan mark. As of the closing on March 18, the futures settlement prices of WTI crude oil and Brent crude oil were US $104.70/barrel and US $107.93/barrel respectively, down 4.23% and 4.21% month on month (MOM) on the 7th. Overall, there is still great uncertainty in the international geopolitical situation and crude oil supply in the short term. It is expected that the follow-up crude oil will continue to fluctuate widely at high prices.
Glyphosate: glyphosate prices continued to fall last week. According to the statistics of Baichuan Yingfu, as of June 18, the quotation of mainstream glyphosate suppliers was 68 Jiangnan Mould & Plastic Technology Co.Ltd(000700) 00 yuan / ton, the transaction reference of 95% raw powder was. 3 Norinco International Cooperation Ltd(000065) 000 yuan / ton, and the FOB reference of the port was 1008011500 US dollars / ton. On the demand side, out of the mentality of "buying up but not buying down", downstream buyers are cautious in asking for orders and purchasing in the downward range of glyphosate price. At present, the transaction situation in the market is relatively cold. On the supply side, at present, China's mainstream glyphosate manufacturers are operating normally, and glyphosate inventory continues to rise with fewer new orders. On the cost side, glycine is well supplied in the market, and the price decreases with the decrease of raw materials such as liquid chlorine and glacial acetic acid. The cost side support of glyphosate is weakened, but the glyphosate glycine price difference is still maintained at a considerable level. Overall, it is expected that glyphosate prices will still have some room for exploration in the short term.
Investment suggestion: in 2022, we will mainly recommend three main investment lines: 1 Under the background of policy control, production and supply are becoming more stringent, while the demand side is still supportive in various sub sectors, such as pesticides, fertilizers and refrigerants; 2. Resource based chemical industry segments that rely on new energy and seek industrial transformation and upgrading from upstream materials, lengthen their business cycle and improve valuation, such as phosphorus chemical industry; 3. High value-added new materials with significant domestic substitution trend, such as semiconductor materials and display materials, which are key planning during the 14th Five Year Plan period.
Risk factors: the risk of continuous fluctuation of international crude oil price, the risk of repeated impact of epidemic situation in some parts of China on enterprise operation, and the risk of sharp fluctuation of chemical product price.
