Market review:
Last week, the basic chemical industry index fell 0.46%, the Shanghai and Shenzhen 300 index fell 2.14% in the same period, and the basic chemical industry index outperformed the market by 1.68 percentage points in the same period. The petroleum and petrochemical index fell 0.28%, outperforming the market by 1.86 percentage points in the same period. ; The companies with the top five declines were: Yunnan Energy Investment Co.Ltd(002053) (- 20.81%), North Chemical Industries Co.Ltd(002246) (- 19.45%), Elion Clean Energy Company Limited(600277) (- 17.67%), Aba Chemicals Corporation(300261) (- 17.34%) and jusailong (- 15.93%).
Key investment points:
International crude oil: last week, the price of international crude oil fluctuated and rose. The transportation system CPC for oil exported from Russia and Kazakhstan via the Caspian Sea is blocked due to the storm, which may reduce the crude oil supply by 1 million barrels / day, and the pipeline may be completely stopped for up to two months; In addition, the negative factors such as the decline of crude oil inventories in the week of March 18 announced by the United States once again triggered concerns about crude oil supply, and crude oil prices fluctuated and rose. On March 24, Biden visited Europe to discuss the issue of Russia and Ukraine, and discussed with EU countries the possibility of further releasing oil reserves. Some countries expressed their unwillingness to impose energy sanctions on Russia, and crude oil prices fell periodically. However, in the evening of March 25, the news of the attack on Saudi Arabia's energy facilities came out, and the price of crude oil changed from decline to rise. As of the closing on March 25, the futures settlement prices of WTI crude oil and Brent crude oil were US $113.90/barrel and US $120.65/barrel respectively, up 8.79% and 11.79% month on month on the 7th respectively. In the short term, there are many uncertain factors affecting the international crude oil market. It is expected that the follow-up crude oil will remain wide and high.
Potash fertilizer: last week, the potash fertilizer market maintained a high level. According to the data of Baichuan Yingfu, as of March 25, the price of potassium chloride in China was 4340 yuan / ton. On the demand side, affected by high prices, the downstream has a strong willingness to wait and see, and the market transaction and procurement enthusiasm are relatively low. On the supply side, the imported potash fertilizer is affected by the epidemic, and the arrival volume at the border trade port is limited; The production of the units overhauled in the early stage in China has been resumed one after another, but some have not yet started. The supply in the market is in short supply. The industrial inventory in the week of March 25 (March 19-march 25) was 2.3443 million tons, down 5.72% on a weekly basis. Subsequently, the national development and Reform Commission will deploy the national reserve of 1 million tons of potash fertilizer in batches, and the current situation of potash fertilizer shortage in China's market will be alleviated. However, considering that the spot of potash fertilizer is still tight and there is great uncertainty in import, it is unlikely that the price will fall sharply in the short term. Potash fertilizer will still operate at a high level in the short term, but there may be signs of a slight loosening of the high level as the national reserve is released one after another.
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.
