Talk every Monday:
Since this year, global natural gas prices have risen sharply. In the three major international natural gas markets of North America, Britain and Asia, natural gas prices have risen to varying degrees. Among them, the natural gas futures price on the New York Mercantile Exchange has increased by more than 90% since the beginning of the year. If calculated from the war between Russia and Ukraine on February 24, the price increase is as high as 57%. We believe that the conflict between Russia and Ukraine will affect the medium and long-term natural gas supply pattern, and the natural gas price is expected to remain high.
NATO sanctions affect Russian gas exports. In terms of natural gas production, Russia is the second largest producer in the world after the United States, and has a significant impact on the market. Thanks to the perfect land gas pipeline network, countries in Europe and Eurasia are its main export regions, accounting for 89%. In response to European and American sanctions, Russia is also seeking the development and diversification of energy exports. However, considering that Europe still accounts for more than 70% of Russia's exports, and that LNG Export facilities and Sino Russian pipeline construction take time, once NATO's energy sanctions against Russia exceed market expectations, Russia's exports will decline significantly in the short term, and other countries need to be relied on to make up for the supply gap.
It is difficult for the US LNG supply to make up for the gap in the short term. Russia benefited from the technological development brought about by the shale revolution, and the United States jumped to the world's largest natural gas producer. In 2021, the natural gas production of the United States gradually rebounded, and the annual supply reached 964.6 billion cubic meters, an increase of about 2% year-on-year. In terms of exports, the United States has limited export capacity in the short term. In 2022, US LNG exports are expected to increase by 17.5 billion cubic meters to 118.6 billion cubic meters, which is still difficult to make up for the gap caused by the decline in Russian exports.
Investment strategy: the conflict between Russia and Ukraine will affect the medium and long-term natural gas supply pattern. Considering that Europe still accounts for more than 70% of Russia's exports, and that LNG Export facilities and the construction of Sino Russian pipelines take time, once NATO's energy sanctions against Russia exceed market expectations, the market will be difficult to fill the vacancy of Russian exports, and the natural gas price is expected to remain high. It is suggested to pay attention to Enn Natural Gas Co.Ltd(600803) , Guanghui Energy Co.Ltd(600256) and other enterprises with upstream natural gas resource advantages and LNG terminal.
Market review:
Sector performance: this week, CITIC's basic chemical sector fell by 4.8%, and the composition of the Shanghai Composite Index fell by 2.9%. Compared with the Shanghai Composite Index in the same period, the basic chemical sector fell by 1.9 percentage points. In terms of sub sectors, the basic chemical sub sector fell mainly this week, with soda ash, daily chemicals and other sub sectors leading the increase; Titanium dioxide, lithium chemicals, rubber additives, membrane materials, fluorochemicals and other sub sectors led the decline.
Rise and fall of individual stocks: the basic chemical sector led the rise this week, including Shandong Haihua Co.Ltd(000822) , Ningbo Tianlong Electronics Co.Ltd(603266) , Cnsig Inner Mongolia Chemical Industry Co.Ltd(600328) , Shanghai Chlor-Alkali Chemical Co.Ltd(600618) , etc; Stocks leading the decline include Poly Union Chemical Holding Group Co.Ltd(002037) , Hubei Forbon Technology Co.Ltd(300387) , Shanghai Tianyang Hotmelt Adhesives Co.Ltd(603330) , Huarong chemical, etc.
Risk tips: the risk of fluctuations in international oil prices, the risk of repeated global epidemics, etc.
