This week’s Chemical Market Overview
This week, the market was disturbed and shaken by the Chinese epidemic, in which wandequan a fell by 2.46%, Shenwan chemical index fell by 4.25%, outperforming the Shanghai and Shenzhen 300 index by 3.26%. In terms of targets, soda ash, chlor alkali and some pesticide targets with good performance have a strong performance. In the early stage, they are under pressure due to the sharp rise of theme opportunities and targets with poor performance.
Portfolio recommendation
\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 208 Valiant Co.Ltd(002643) Wanhua Chemical Group Co.Ltd(600309) Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) Jiangsu Yangnong Chemical Co.Ltd(600486)
Major events of this week
The market price of phosphorus ore rose again, mainly due to the shortage of supply. At this stage, most mainstream enterprises suspend receiving orders and quotations for their own use, with little outward outflow of phosphate rock resources and limited supply of phosphate rock. In addition, the low grade of phosphate rock mined this year and tight output have promoted the rise of prices. Price reference: the quotation of 30% grade truck / ship board in Hu, GUI and Chuan is 700730 yuan / ton, and the quotation of mainstream enterprises in Yunnan is suspended. In the downstream, the enterprises with phosphate rock resources have little impact, which has a certain pressure on the enterprises without phosphate rock resources. It is expected that in the short term, the phosphorus ore market will still operate at a high level and the supply is still tight.
Affected by the sanctions against Russia, the EU fertilizer giant Lithuanian lifosa company has stopped production. Because the indirect owner of lifosa company, Russian oligarch Andrei melnichenko, was sanctioned, the company officially stopped production at 18:00 on April 10 and turned to equipment protection. Russia and Belarus are one of the world’s largest suppliers of chemical fertilizers. Since the escalation of the conflict between Russia and Ukraine, due to the interruption of the supply of raw materials from Russia and Belarus, the factory of lifosa located in kaidiani City, Lithuania has been supported by the remaining raw materials and operated at the minimum capacity since March. Even if it can resume work in May, the chemical fertilizer production capacity will also decline significantly. Considering the rigid demand of the fertilizer industry, it is expected that the tension between supply and demand will continue in the future.
The Ministry of industry and information technology has taken many measures to support the stable production of key enterprises in Shanghai: the Party group of the Ministry of industry and information technology has resolutely implemented the spirit of the important instructions of Xi Jinping general secretary, and recently sent a Shanghai front working group to work with relevant departments in Shanghai to ensure the supply of medical materials and promote the stable production and resumption of production of key industrial enterprises in accordance with the deployment of the joint prevention and control mechanism of the State Council, Ensure the smooth operation of the industrial chain and supply chain.
Investment advice
Recently, the market is concerned about two aspects: one is the impact of the epidemic on chemical enterprises. According to the investigation, it is found that the supply side is less affected, and the logistics and demand side are more affected, especially the logistics to and from Jiangsu, Zhejiang and Shanghai; In addition, many growth stocks continue to be under pressure. According to their specific layout timing, it is recommended to layout when they are oversold or on the right. In terms of direction, we think there are four main lines. One is the inflation main line. Although its cost performance will fluctuate at different stages of the market, it may be one of the main lines running through the whole year under the background of high inflation. It is suggested to focus on the related targets of phosphate fertilizer, potassium fertilizer and pesticide; Second, the combination of steady growth. The pressure of the epidemic has further increased the market’s attention to the direction of steady growth. It is suggested that relevant lines focus on soda ash, and its core logic is that supply and demand are both good; The third is the defensive combination. Under the background that the market is still chaotic in the middle of the year, this direction is another main line throughout the year. It is suggested to pay attention to the targets with undervalued value and good outlook, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) ; Finally, growth stocks. Although the current market environment is still not conducive to the performance of growth stocks, we think there may be midline layout opportunities brought by oversold.
Risk tips
The epidemic affects demand outside China, crude oil prices fluctuate violently, and changes in international policies affect industrial layout
