Key news tracking this week
On March 15 local time, at the meeting of the economic and Financial Affairs Committee of the European Council, the finance ministers of the 27 EU countries adopted the carbon tariff proposal of France, the rotating presidency of the European Council. This means that European countries support carbon tariff measures. EU carbon tariff, also known as “carbon border regulation mechanism (CBAM)”, is the first carbon tariff measure officially brewing in the world. Under this mechanism, the EU plans to charge the carbon content of imported products to make imported products bear the same carbon emission cost as EU local industries.
Price tracking comments on key products this week
WTI oil prices fell 5.8% this week to US $102.98/barrel.
Key injection sub industries: viscose staple fiber / urea rose by 2.7% / 0.3% month on month respectively this week; Polymerized MDI / DMF / pure MDI / Organosilicon / calcium carbide PVC / ethylene glycol / rubber / TDI / light soda ash decreased by 5.6% / 5.4% / 5.0% / 2.6% / 2.2% / 2.1% / 1.9% / 1.0% / 0.9% month on month, respectively; The price of caustic soda / VA / titanium dioxide / liquid methionine / Spandex / viscose filament / VE / heavy soda / Vinyl PVC / solid methionine / acetic acid remains unchanged.
The top five sub industries of this week’s growth: butadiene (Southeast Asia CFR) (+ 21.7%), sulfuric acid (Zhejiang Jiahua 98%) (+ 20.4%), butadiene (East China) (+ 11.1%), sulfur (solid, Shanghai Gaoqiao) (+ 9%), synthetic ammonia (Jiangsu Xinyi) (+ 7%).
Sulfuric acid: China’s sulfuric acid Market performed well this week, and the price rose steadily. The stable high price of raw sulfur has brought cost support to the sulfuric acid market. In terms of supply, the regional mainstream acid enterprises successively carried out planned maintenance from March to may, and the supply side of sulfuric acid market showed obvious positive performance. The demand for monoammonium phosphate in the downstream continues to be strong, which is significantly beneficial to the sulfuric acid market.
Synthetic ammonia: this week, the market price of liquid ammonia rose rapidly and sharply, mainly due to the rise of coal price and the increase of cost; Last week, the rising trend of urea market was significantly driven, the price advantage of urea was opened, and the intention to push up the liquid ammonia market was strengthened; When the liquid ammonia unit is overhauled and the urea price is good, some units are changed to production and adjusted, and the local volume of liquid ammonia market becomes larger, supporting the manufacturers’ mentality of pushing up.
Market performance of chemical sector this week
The basic chemical sector fell 1.19% compared with last week, and the Shanghai and Shenzhen 300 index fell 0.94% compared with last week. The basic chemical sector underperformed the market by 0.24 percentage points, ranking 13th in all sectors. According to the classification of Shenwan, the basic chemical sub industry has a large weekly increase: Civil Explosives (+ 2.44%), other chemicals (+ 2.08%), tires (+ 1.71%), polyester (+ 1.29%), and paint and ink manufacturing (+ 1.13%).
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
