Key news tracking this week
The Ministry of industry and information technology recently sent a Shanghai front working group to work with relevant departments in Shanghai to make every effort to ensure the supply of medical materials, promote the stable production and resumption of production of key industrial enterprises, and ensure the smooth operation of the industrial chain supply chain. The Ministry of industry and information technology, together with relevant departments and local governments, adhere to the “one enterprise, one case” according to the requirements of epidemic prevention and control and the needs of national key industrial chains, guide key enterprises to formulate plans for resumption of work and epidemic prevention and control, and promote resumption of work and production in an orderly manner from easy to difficult. Study and formulate epidemic prevention and control standards for production and operation (resumption of work and production), urge enterprises to check leaks and fill vacancies, and coordinate epidemic prevention and control and resumption of work and production.
Price tracking comments on key products this week
WTI oil prices rose 8.8% this week to US $106.95/barrel.
Key injection sub industries: caustic soda / silicone / heavy soda ash / rubber / urea rose 7.1% / 1.8% / 0.9% / 0.8% / 0.7% month on month respectively this week; DMF / TDI / ethylene glycol / VA / pure MDI / Spandex / solid methionine / Vinyl PVC / calcium carbide PVC decreased by 11.6% / 5.9% / 3.2% / 2.3% / 2.2% / 1.9% / 1.1% / 0.5% / 0.1% month on month, respectively; The price of viscose staple fiber / light soda ash / titanium dioxide / liquid methionine / viscose filament / VE / acetic acid / polymerized MDI remained unchanged.
The top five sub industries of this week’s increase: phosphate rock (India CFR (68-70bpl) contract price) (+ 50.8%), PX (imported CFR) (+ 12.2%), natural gas Henry hub (spot) (+ 10.8%), glufosinate (East China) (+ 10%), potassium sulfate (Xinjiang Lop Nur 51% powder) (+ 8.9%).
Glufosinate: the price of glufosinate increased this week mainly for two reasons: first, the orders of mainstream Chinese manufacturers are scheduled to May June 2022, and the spot supply in the market is tight; Second, it is in the peak season of overseas demand. In view of the low timeliness of shipping, some orders are issued in advance, the procurement is urgent, the price raising mentality of suppliers is strengthened, and the price of glyphosate is increased.
Caustic soda: this week, manufacturers in Dezhou and Liaocheng, Shandong Province took good goods, and the price rose moderately; The supply of liquid alkali in Hebei was tight, and the price rose again at the beginning of the week; The logistics transportation in Shanxi is difficult. This week, the load of local chlor alkali enterprises is still maintained at about 30-40%. The supply of liquid alkali is limited and the price is stable; The operating load of alkali plants in Tianjin is not satisfied, and there are ships for alkali delivery. The supply of domestic trade is limited, and the quotation of enterprises is flexibly increased. The price of liquid alkali in some areas of Northwest China rose this week. Due to the difficulty of liquid alkali inflow from the periphery in Qinghai and Gansu, and the price trend of flake alkali went up, which had a positive impact on the liquid alkali market. Some enterprises flexibly raised the export price of liquid alkali.
Market performance of chemical sector this week
The basic chemical sector fell 4.75% compared with last week, and the Shanghai and Shenzhen 300 index fell 0.99% compared with last week. The basic chemical sector underperformed the market by 3.75 percentage points, ranking 24th in all sectors. According to the classification of Shenwan, the basic chemical sub industry has a large weekly increase: other chemical raw materials (+ 5.42%), modified plastics (+ 4.3%), fluorochemical and refrigerant (+ 2.48%), chlor alkali (+ 0.11%).
Key sub industry views
(1) many factors affect the 22-year prosperity of the sub industry. The overall profitability of the pesticide industry is expected to improve in the 22-year period when the cultivated land area is expected to increase, grain prices remain at a high level, China’s supply is orderly and prices rise in the fourth quarter. It is recommended that Jiangsu Yangnong Chemical Co.Ltd(600486) , Shandong Weifang Rainbow Chemical Co.Ltd(301035) , Anhui Guangxin Agrochemical Co.Ltd(603599) , Limin Group Co.Ltd(002734) ; The prosperity of the tire industry has bottomed out and the new energy field has brought development opportunities. It is suggested to pay attention to Sailun Group Co.Ltd(601058) , Qingdao Sentury Tire Co.Ltd(002984) . The boom of viscose industry is expected to reverse, and Tangshan Sanyou Chemical Industries Co.Ltd(600409) . (2) The demand economy is relatively weak, and the fields of semiconductor materials, military materials and other new materials are independent and controllable in the medium and long term; The chemical synthesis platform company Valiant Co.Ltd(002643) , and China’s private gas leading enterprise Suzhou Jinhong Gas Co.Ltd(688106) . (3) The downstream demand is stable, and great attention is paid to the subdivided fields such as photovoltaic, wind power, new energy and sugar substitutes; It is recommended that the leader of new energy functional materials Shenzhen Capchem Technology.Ltd(300037) , and the global leader of sweeteners Anhui Jinhe Industrial Co.Ltd(002597) . (4) The vertical and horizontal expansion of the leading enterprises has highlighted the advantages of integration, and the profit center is expected to rise; Focus on Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Zhejiang Nhu Company Ltd(002001) (jointly covered with the medical group).
Risk warning: risk of large fluctuation of crude oil price; Covid-19 epidemic leads to less demand than expected risk; Safety and environmental protection risks
