Since the beginning of the year, the sector has slightly led the market: this week, the chemical (Shenwan) industry index rose by 0.04%, the gem index fell by – 4.71%, the Shanghai and Shenzhen 300 index fell by – 0.55%, the Shanghai Composite Index rose and fell by – 0.45%, and the chemical (Shenwan) sector led the market by 0.50 percentage points. Since the beginning of 2022, the chemical (Shenwan) industry index has fallen by – 9.38%, the gem index by – 22.66%, the CSI 300 index by – 14.36%, the Shanghai Composite Index by – 10.66%, and the chemical (Shenwan) sector is 1.27 percentage points ahead of the market.
Event:
On April 7, the Ministry of industry and information technology and other six departments jointly issued the guiding opinions on promoting the high-quality development of petrochemical industry in the 14th five year plan.
Fertilizer prices outside China continued to rise. Internationally, according to the wind data of the week of April 9, the price of potash fertilizer (FOB Israel) was 929 US dollars / ton, with a month on month increase of + 32.5%; Monoammonium phosphate (FOB Baltic Sea) 1200 US dollars / ton, month on month + 36.2%; Urea (FOB Baltic Sea) 825 USD / ton, mom + 34.1%; In China, in the week of April 9, the price of potassium fertilizer (60% powder, Qinghai Salt Lake) was 2825 yuan / ton, unchanged month on month; The price of monoammonium phosphate (55% powder, Hubei) is 3600 yuan / ton, with a month on month ratio of + 7.5%; Urea (small particles, nationwide) was 2825 yuan / ton, with a month on month ratio of + 7.5%.
Comments:
The opinions on the 14th five year plan of petrochemical industry were issued, and the transformation of energy structure was accelerated. The opinions put forward that by 2025, the China Petroleum & Chemical Corporation(600028) industry will basically form a high-quality development pattern with strong independent innovation ability, reasonable structural layout, green, safe and low-carbon, greatly improve the guarantee ability of high-end products, significantly enhance its core competitiveness, and take solid steps towards high-level self-reliance and self-improvement. Main objectives: (1) innovative development. By 2025, the R & D investment of Enterprises above Designated Size will account for more than 1.5% of the main business income; Break through more than 20 key common technologies and more than 40 key new products; (2) Industrial structure. The concentration of bulk chemicals has been further improved, and the capacity utilization rate has reached more than 80%; The guarantee level of ethylene equivalent has been greatly improved, and the guarantee level of new chemical materials has reached more than 75%; (3) Industrial layout. The relocation of hazardous chemical enterprises in densely populated urban areas has been fully completed, forming about 70 chemical parks with competitive advantages. By 2025, the output value of the chemical industry park will account for more than 70% of the total output value of the industry; (4) Digital transformation. The automatic control rate of main production devices of enterprises in key fields such as petrochemical and coal chemical industry has reached more than 95%, and about 30 intelligent manufacturing demonstration plants and about 50 intelligent chemical industry demonstration parks have been built; (5) Green safety. The energy consumption and carbon emission of bulk products decreased significantly, the total emission of volatile organic compounds decreased by more than 10% compared with the 13th five year plan, and the safety level was improved. In addition, the opinions mentioned that we should encourage the rational and orderly development and utilization of “green hydrogen” and accelerate the one-step olefin production project of direct cracking of crude oil to ethylene and syngas. Promote the coupling demonstration of refining and chemical industry, coal chemical industry and “green electricity”, “green hydrogen” and other industries, and carry out large-scale demonstration of carbon dioxide capture, storage, oil displacement and chemical production by taking advantage of the characteristics of high purity and low capture cost of carbon dioxide discharged by refining and chemical and coal chemical plants. Accelerate the development and application of energy-saving and carbon reduction technologies such as direct cracking of crude oil to ethylene, one-step olefin production from syngas, and intelligent continuous micro reaction to prepare chemical products. Investment suggestions: (1) in the field of refining and chemical industry, it is suggested to pay attention to the private refining and chemical enterprises that are expected to accelerate the follow-up project planning under the goal of continuously strengthening R & D investment, extending new materials and improving the guarantee level of ethylene equivalent: Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Tongkun Group Co.Ltd(601233) ; (2) Leading light chemical enterprises with short process and friendly environment: Satellite chemistry, Oriental Energy Co.Ltd(002221) ; (3) In the field of coal chemical industry, it is suggested to pay attention to flexible production and the leader of coal based new materials: Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , which is coupled with the layout of “green hydrogen”; Ningxia Baofeng Energy Group Co.Ltd(600989) (4) in the field of bio based new materials, it is suggested to pay attention to Cathay Biotech Inc(688065) , etc.
Due to geographical factors, the global supply of potassium fertilizer is tight, and the high level of raw materials supports the prosperity of nitrogen and phosphorus fertilizer. The export of major potash producing countries is limited. Russia: since the end of February 2022, the geopolitical conflict between Russia and Ukraine has been heating up, which has a great impact on the transportation and export of Russian potassium fertilizer products. On March 10, the Russian Ministry of industry said that it would prohibit the export of chemical fertilizer to “unfriendly” countries, and Russia is currently subject to severe economic sanctions from the West. Although the sanctions have not been targeted at the export of potash fertilizer, they have seriously affected the problem of bank payment; Belarus: the European Union and Canada require to limit the export of parts with potassium content (equivalent to K2O) lower than 40% or higher than 62%. The United Kingdom stipulates Belarusian potassium fertilizer products in the form of listing tariff codes, resulting in the situation that Belarus cannot use Lithuania’s kleipeda port to export potassium fertilizer. The two countries control nearly 40% of the world’s potassium fertilizer exports. From the supply side, the new capacity this year mainly includes the capacity adjustment of some enterprises, such as the increase of 1 million tons in nutrien and Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) new capacity of 750000 tons. The overall scale of new capacity is limited. If the geographical factors cannot be alleviated in a short time, potash fertilizer may maintain a tight supply situation. The high level of raw materials supports the prosperity of nitrogen and phosphorus fertilizer. On the one hand, the soaring cost of raw materials such as natural gas, coal and sulfur pushed up the prices of overseas phosphate fertilizer and nitrogen fertilizer. On the other hand, in March, the Russian Ministry of industry announced that it would ban the export of chemical fertilizer to “unfriendly” countries, leading to a new round of rise in global chemical fertilizer. However, due to the sluggish export caused by the prolonged cycle after China’s export to legal inspection, the price difference of nitrogen and phosphorus fertilizer outside China continues to widen. At present, the price difference of urea outside China is 2426 yuan / ton, with a month on month ratio of + 93.0%; The price difference of monoammonium phosphate was 4038 yuan / ton, with a month on month ratio of + 82.2%. Considering China’s relatively abundant production capacity, we are optimistic that after China’s demand weakens from the end of April to may, exports may relax and relevant enterprises may usher in greater profit flexibility. Suggested attention: potash fertilizer sector: Qinghai Salt Lake Industry Co.Ltd(000792) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Qingdao East Steel Tower Stock Co.Ltd(002545) ; Phosphate fertilizer sector: Xinyangfeng Agricultural Technology Co.Ltd(000902) , Hubei Yihua Chemical Industry Co.Ltd(000422) , Kunming Chuan Jin Nuo Chemical Co.Ltd(300505) , Yunnan Yuntianhua Co.Ltd(600096) , Hubei Xingfa Chemicals Group Co.Ltd(600141) ; Nitrogen fertilizer sector: Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Yangmei Chemical Co.Ltd(600691) , Sichuan Meifeng Chemical Industry Co.Ltd(000731) , China heart to heart fertilizer.
Product prices rose and fell with each other: the products with the highest price increase include: American Henry hub Futures (11.64%), isobutyraldehyde (8.49%), ammonium chloride (wet ammonium) (8.33%), lithium carbonate industrial grade (5.87%), anhydrous hydrofluoric acid (East China) (5.18%). The products with the highest price decline include dichloromethane (- 9.71%), DMF (- 6.87%), melamine (- 5.21%), maleic anhydride (- 5.15%), propane (CFR East China) (- 5.13%).
Crude oil prices reached a new high, global capital expenditure recovered, and the oil service industry fully benefited: China Oilfield Services Limited(601808) , Offshore Oil Engineering Co.Ltd(600583) ; Due to the disturbance of geopolitical factors, the vulnerability of the global oil and gas supply chain appears. It is suggested to pay attention to the cursor of oil and gas: CNOOC, Petrochina Company Limited(601857) , Guanghui Energy Co.Ltd(600256) ; The oil price fluctuates at a high level, and the coal and gas head route highlights the cost advantage: Satellite chemistry, Ningxia Baofeng Energy Group Co.Ltd(600989) . Leading enterprises expand their advantages, while the valuation is obviously low, or realize through the cycle. It is suggested to focus on leading enterprises with excellent quality and core competitiveness, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Zhejiang Nhu Company Ltd(002001) , Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) , Hengli Petrochemical Co.Ltd(600346) . With the improvement of health awareness, sugar substitutes have become the general trend of the times. It is suggested to pay attention to the leading food additives in the business cycle Anhui Jinhe Industrial Co.Ltd(002597) . New materials: scientific and technological progress promotes the innovation of terminal demand and drives the upgrading and development of high-end manufacturing industry. In this process, industrial innovation will put forward higher requirements for material properties and promote the rapid development of new material industry. It is suggested to focus on the subject of industrial innovation and supply chain reconstruction: Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Sinocera Functional Material Co.Ltd(300285) , Valiant Co.Ltd(002643) . In addition, it is suggested to focus on high-quality growth companies: Zhejiang Hailide New Material Co.Ltd(002206) .
Risk warning events: macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.
