Core view
1. In the past week, the international price of potash fertilizer rose sharply, reaching a record high. As of April 8, 2022, the FOB prices of potassium chloride in Vancouver, northwest Europe and Israel were reported at US $862.5, US $901.5 and US $929.0/ton respectively, up US $115.0, US $87.5 and US $90.0/ton respectively compared with March 31, with increases of 5.4%, 10.7% and 10.7% respectively. The highest import price of potassium chloride in China is 710 US dollars / ton. From October 2003 to September 2008, the price of potassium chloride rose rapidly, with the highest price of 710 US dollars / ton. Since then, the price of potassium chloride has fluctuated and dropped. By the end of 2020, the price of potassium chloride had closed at US $223.69/ton, down 68.5% in about 12 years. Since 2021, the international potash price has entered the upward channel, ending the 12-year downturn. The price of potash fertilizer rose sharply in 2021. By the end of 2021, the FOB price of potassium chloride in Vancouver, northwest Europe and Israel had been reported at US $626.5, US $619.5 and US $652.0 / ton respectively, with an increase of 205.6%, 215.3% and 215.7% respectively. Since 2022, the international price rise of potash fertilizer has continued and reached new highs. As of April 8, the FOB price of potassium chloride in Vancouver, northwest Europe and Israel increased by 37.8%, 45.5% and 42.5% respectively compared with the beginning of the year. The recent rise in the price of potash fertilizer is mainly due to the increasing gap at the supply side. From June to August 2021, the export of potash fertilizer from Belarus was jointly sanctioned by Europe, America and other countries, and the export of more than 10 million tons of potash fertilizer was limited, accounting for about 21% of the total global potash fertilizer export. Since 2022, the global potassium fertilizer supply gap has further increased. In March 2022, Russia announced the suspension of fertilizer exports, which affected about 10.84 million tons, accounting for about 19% of the total global potash exports. Superimposed on the limited export of potash fertilizer from Belarus, 40% of the global potash fertilizer supply is affected. Under the background of limited supply, the global potash price may continue to rise in 2022.
2. As of April 8, 2022, the price index of China’s chemical products reported 5816 points, up 0.5% on a weekly basis. Chemical products were mixed, with propylene up 3.7% and butadiene down 4.7%. In terms of propylene, the reason for the price rise is that affected by the epidemic prevention and control, some manufacturers stop for repair and inspection, the circulation tension continues, and the inventory is low, superimposed with the high demand for downstream products, which is generally in short supply. In terms of butadiene, the price decline was mainly due to the release of the output of Jiutai in Inner Mongolia and Chengzhi in Nanjing. The tight supply situation in the field was alleviated, and the demand side was relatively cold.
3. Over the past week, international natural gas prices have risen sharply. As of April 8, 2022, the closing price of NYMEX natural gas continuous futures in the United States was reported at US $6.321/million BTU, up 10.5% this week. The rise in natural gas prices was mainly due to further sanctions on Russian natural gas supply. If Europe reduces the purchase of coal from Russia or prohibits the import of natural gas, the US natural gas price will face greater upward pressure in the coming months. At the same time, the rise of coal price will further drive the high price of natural gas.
4. Market review. Last week, among the 33 tertiary sub industries of CITIC chemical, 14 sectors rose or remained flat and 19 sectors fell. Among them, phosphorus fertilizer and phosphorus chemical industry sector increased the most, with an increase of 12.1%; Carbon fiber sector fell the most, with a decline of 8.1%. In terms of individual stocks, the top three weekly gains were Kunming Chuan Jin Nuo Chemical Co.Ltd(300505) , Qingdao East Steel Tower Stock Co.Ltd(002545) , Poly Union Chemical Holding Group Co.Ltd(002037) , with weekly gains of 22.6%, 21.5% and 16.3% respectively; The top three weekly declines were Gpro Titanium Industry Co.Ltd(000545) , Aba Chemicals Corporation(300261) , Ningbo Ronbay New Energy Technology Co.Ltd(688005) , with weekly declines of 19.5%, 19.4% and 13.6% respectively.
Investment advice
Under the rising price of potash fertilizer and the prosperity of the industry, relevant production enterprises may benefit, such as Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Zangger mining, Qinghai Salt Lake Industry Co.Ltd(000792) , Qingdao East Steel Tower Stock Co.Ltd(002545) , etc.
Risk tips
International geopolitical changes, upgrading of safety and environmental protection policies, abnormal exchange rate fluctuations, etc.
