Talk every Monday:
In 2021, the price and profit of propylene oxide in China are at a high level:
The annual average price of Po was about 17000 yuan / ton, and the profit of chlorohydrin process was once as high as more than 10000 yuan.
At present, the mainstream process of propylene oxide in China is still dominated by chlorohydrin process, accounting for more than 50%. The pressure of environmental protection increases and the new capacity of chlorohydrin process is limited, resulting in a tight balance between supply and demand of propylene oxide and a significant expansion in price and profit.
On the supply side, a total of more than 2 million tons / year of new capacity needs to be put into operation in 2022, and the supply tends to be surplus:
In 2021, China’s total output of propylene oxide increased by 30.16% year-on-year, and the monthly output from April to August was higher than 300000 tons.
In 2022, a total of more than 2 million tons / year of new capacity needs to be put into operation. From the perspective of the route, the CO oxidation method is the mainstream of the proposed capacity, followed by hppo, and the chlorohydrin method is difficult to be added due to policy constraints. If it is conservatively estimated, after the new capacity is put into operation, the supply increment of propylene oxide will also be about 2 million tons / year.
In the future, only some small-scale chlorohydrin process units will withdraw due to high environmental pressure and poor profitability, and the probability of large-scale withdrawal from supply is low. At present, there are four chlorohydrin production enterprises with a production capacity of less than 100000 tons / year (a total capacity of 292000 tons), that is, all withdraw within 3-5 years, and the Po supply capacity only affects 300000 tons.
On the demand side, polyether polyols account for three quarters of the total demand for propylene oxide:
In 2021, China’s apparent consumption of Po was 3.89 million tons, an increase of 24.4% over the same period last year. In the downstream consumption structure, polyether polyol, propylene glycol and alcohol ether account for about 75%, 9% and 7% respectively.
Since 2021, the output growth of downstream cars and refrigerators has picked up, driving the demand for polyether, and then driving the demand for Po to resume rapid growth.
The bargaining power of downstream polyether plants is gradually enhanced:
In 2021, the output of polyether polyol industry is about 4.2 million tons. The subsequent polyether industry continues to expand and release, and the consumption and proportion of propylene oxide will further increase. However, when the increase of polyether capacity is less than that of propylene oxide, it is expected that the bargaining power and dominance of polyether industry will increase step by step in the future.
It is suggested to pay attention to leading enterprises with large-scale production capacity and leading process technology in the polyether industry chain such as Wanhua Chemical Group Co.Ltd(600309) , Hongbaoli Group Corporation Ltd(002165) , Shandong Longhua New Material Co.Ltd(301149) and so on.
Market review:
Sector performance: this week, CITIC’s primary petroleum and petrochemical index rose or fell – 2.48%, ranking 23rd among 30 industry indexes. This week, the Shanghai index rose or fell by – 1.77%, and the CITIC primary petroleum and petrochemical index was – 0.71% relative to the Shanghai index. The rise and fall of petroleum and petrochemical sub sectors: Other Petrochemical (- 0.5%), oil refining (- 1.70%), engineering services (- 3.00%), oil exploitation (- 4.90%), oil sales and storage (- 6.40%), and oil field services (- 6.47%).
Rise and fall of individual stocks: this week, the petroleum and petrochemical sector led the rise of individual stocks, including Tian Jin Bohai Chemical Co.Ltd(600800) (+ 7.98%), Haohua Chemical Science & Technology Corp.Ltd(600378) (+ 6.08%), Hengli Petrochemical Co.Ltd(600346) (+ 3.71%) and so on; Stocks leading the decline include Zhejiang Hailide New Material Co.Ltd(002206) (- 10.48%), China Oilfield Services Limited(601808) (- 9.55%), Bomesc Offshore Engineering Company Limited(603727) (- 9.26%), Xinjiang Beiken Energy Engineering Co.Ltd(002828) (- 8.72%), North Huajin Chemical Industries Co.Ltd(000059) (- 8.15%), etc.
Risk warning: policy risk; Geopolitics exacerbates risks; The risk of sharp fluctuations in crude oil prices and the risk of continued deterioration of the global covid-19 epidemic;
