Market review. As of March 25, 2022, CITIC’s basic chemical industry fell by 0.45% this week, outperforming the CSI 300 index by 1.69 percentage points and ranking 12th among CITIC’s 30 industries; CITIC basic chemical industry has fallen 8.84% so far this month, outperforming the Shanghai and Shenzhen 300 index by 0.04 percentage points.
Specific to the three-level sub industries of CITIC basic chemical industry, from the performance of the recent week, the top five sectors are potassium fertilizer (+ 9.80%), food and feed additives (+ 5.19%), inorganic salts (+ 5.15%), spandex (+ 3.33%) and printing and dyeing chemicals (+ 3.22%); From the performance of the last week, the top five sectors of decline were carbon fiber (- 8.01%), lithium chemicals (- 7.00%), rubber products (- 4.30%), rubber additives (- 4.30%) and membrane materials (- 3.36%).
Among the stocks with the highest gains this week, Zhejiang Zhongxin Fluoride Materials Co.Ltd(002915) , Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) and Zhejiang Yongtai Technology Co .Ltd(002326) performed best, rising 44.05%, 32.76% and 30.02% respectively. Among the stocks with the highest decline this week, Yunnan Energy Investment Co.Ltd(002053) , North Chemical Industries Co.Ltd(002246) and Elion Clean Energy Company Limited(600277) performed the worst, with declines of – 20.81%, – 19.45% and – 17.343% respectively.
Rise and fall of chemical products: among the key monitored chemical products, the products with the top five price increases this week are sulfuric acid (+ 18.89%), nitric acid (+ 17.65%), yellow phosphorus (+ 10.77%), caustic soda (+ 10.00%), butanone (+ 8.82%), and the products with the top five price decreases are DMF (- 5.17%), metallic silicon (- 4.55%), adipic acid (- 3.73%), BDO (- 3.37%) and DMC (- 3.33%).
View of Basic Chemical Industry Week: the uncertainty of the situation in Russia and Ukraine caused the international oil price to rise again this week. At present, the situation in Russia and Ukraine and oil price are still important variables affecting the trend of the sector. At this stage, it is suggested to focus on the good performance of the newspaper industry in the first quarter, Jiangsu Yangnong Chemical Co.Ltd(600486) ( Jiangsu Yangnong Chemical Co.Ltd(600486) ), Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ( Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ), Anhui Jinhe Industrial Co.Ltd(002597) ( Anhui Jinhe Industrial Co.Ltd(002597) ), Lecron Industrial Development Group Co.Ltd(300343) ( Lecron Industrial Development Group Co.Ltd(300343) ), etc. At the same time, the recent conflict between Russia and Ukraine has blocked the export of Russian chemical fertilizer. It is reported that Russia has suspended the export of chemical fertilizer. Russia is a major exporter of potassium fertilizer in the world, which will further boost the international price of potassium fertilizer. It is suggested to pay attention to Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ( Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ) and Qinghai Salt Lake Industry Co.Ltd(000792) ( Qinghai Salt Lake Industry Co.Ltd(000792) ); At present, the price difference of phosphate fertilizer outside China is large. If China’s export is liberalized after spring ploughing, the profits of Chinese phosphate fertilizer enterprises may improve. It is suggested to pay attention to Yunnan Yuntianhua Co.Ltd(600096) ( Yunnan Yuntianhua Co.Ltd(600096) ), Hubei Xingfa Chemicals Group Co.Ltd(600141) ( Hubei Xingfa Chemicals Group Co.Ltd(600141) ), Hubei Yihua Chemical Industry Co.Ltd(000422) ( Hubei Yihua Chemical Industry Co.Ltd(000422) ), etc.
Risk warning: the fluctuation risk of energy price caused by the uncertainty of Russia Ukraine conflict; Risk of narrowing the price difference of chemical products due to sharp fluctuations in oil prices; Risk of limited export of some chemical fertilizers; The policy of ensuring supply and stabilizing price of chemical fertilizer leads to the risk that the price of chemical fertilizer drops more than expected; If macroeconomic pressure leads to the risk that the downstream demand of chemical products is lower than expected; The risk of deterioration of supply and demand pattern due to the rapid release of new production capacity of some products; The risk of intensified industry competition; Natural and man-made disasters and other force majeure events.
