Investment summary:
Talk every Monday:
Last week, in CITIC’s basic chemical sub sector, phosphorus fertilizer, phosphorus chemical industry, compound fertilizer and nitrogen fertilizer increased by 11%, 7% and 5% respectively. Mainly due to the continuous rise in the price of chemical fertilizer, driving the strength of relevant sectors. We believe that the prosperity of the chemical fertilizer industry is expected to continue. On the one hand, the policy strictly controls the new production capacity, resulting in the rise of raw material prices and strong cost support; On the other hand, the intensification of the conflict between Russia and Ukraine has a great impact on the global fertilizer supply, and the medium and long-term supply and demand is expected to continue the tight pattern.
The policy strictly controls the new production capacity, which increases the price of raw materials. On April 7, six departments including the Ministry of industry and information technology and the national development and Reform Commission issued the guiding opinions on promoting the high-quality development of petrochemical and chemical industry in the 14th five year plan, which once again required to strictly control the new production capacity of ammonium phosphate, yellow phosphorus and other industries. The increment of medium and long-term yellow phosphorus supply end will be limited, and the tight supply of raw materials is expected to be maintained. In this context, the cost of raw materials continued to rise in the first quarter of this year, driving the production cost of phosphate fertilizer manufacturers to rise by about 500 yuan / ton. The prices of other raw materials also increased surprisingly, which formed a strong cost support for chemical fertilizer
The intensification of the conflict between Russia and Ukraine has a great impact on the global fertilizer supply. Russia is the largest producer of three types of fertilizers (nitrogen fertilizer, phosphorus fertilizer and potassium fertilizer), which has a significant impact on the global fertilizer market. In terms of chemical fertilizer exports, Russia accounts for 23% of global ammonia exports, 14% of global urea exports, 21% of global potassium fertilizer exports and 10% of phosphate exports. Recently, the situation in Russia and Ukraine has deteriorated again, and the United States may still include Russian fertilizer in the sanctions list in the future, increasing the disturbance of the global fertilizer supply market
Investment strategy: on the one hand, with the policy of strictly controlling the new production capacity, the raw material price increases and the cost side support is strong. On the other hand, the intensification of the conflict between Russia and Ukraine has a great impact on the global fertilizer supply. The medium and long-term supply and demand is expected to continue the tight pattern, and the prosperity of the fertilizer industry is expected to continue. It is suggested to continue to pay attention to Yunnan Yuntianhua Co.Ltd(600096) , Hubei Xingfa Chemicals Group Co.Ltd(600141) and other phosphorus chemical enterprises with resource advantages such as phosphate rock and actively expand the downstream new energy industry chain.
Market review:
Sector performance: this week, CITIC’s basic chemical sector fell 0.94%, and the composition of the Shanghai Composite Index fell 1.6%. Compared with the Shanghai Composite Index in the same period, the basic chemical sector led by 0.66 percentage points. In terms of sub sectors, the sub sectors of basic chemical industry mainly fell this week, among which the sub sectors of phosphorus fertilizer and phosphorus chemical industry, compound fertilizer, nitrogen fertilizer, pesticide and spandex led the increase; Carbon fiber, fluorochemical, electronic chemicals, rubber additives, titanium dioxide and other sub sectors led the decline.
Rise and fall of individual stocks: the basic chemical sector led the rise this week, including Kunming Chuan Jin Nuo Chemical Co.Ltd(300505) , Poly Union Chemical Holding Group Co.Ltd(002037) , Hubei Yihua Chemical Industry Co.Ltd(000422) , Anhui Liuguo Chemical Co.Ltd(600470) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , etc; Stocks leading the decline include Gpro Titanium Industry Co.Ltd(000545) , Aba Chemicals Corporation(300261) , Shandong Fengyuan Chemical Co.Ltd(002805) , Zhongfu Shenying, Shenzhen Sunrise New Energy Co.Ltd(002256) , etc.
Risk tips: the risk of fluctuations in international oil prices, the risk of repeated global epidemics, etc.
