Guoxin chemical's view:
1) the rising cycle of global crops is expected to drive the demand for agricultural materials to pick up and the overall prosperity of chemical fertilizer to rise. The price of chemical fertilizer in the international market is highly related to the price of Shenzhen Agricultural Products Group Co.Ltd(000061) ; When the Shenzhen Agricultural Products Group Co.Ltd(000061) price is higher, farmers are expected to apply more fertilizer. Since 2020, the new round of global food price rise has been mainly driven by tight supply and excessive currency: the main agricultural production areas such as the United States and Brazil have been impacted by dry weather, and the main Shenzhen Agricultural Products Group Co.Ltd(000061) inventory consumption ratio of corn and soybeans has continued to decline; The recovery of feed demand and the excessive currency caused by the epidemic have boosted the rise of global food prices; In addition, the conflict between Russia and Ukraine since 2022 has exacerbated the tight circulation of Shenzhen Agricultural Products Group Co.Ltd(000061) such as wheat and corn. At present, Shenzhen Agricultural Products Group Co.Ltd(000061) is at an all-time high. With the future La Nina or repetition, covid-19 and geopolitical situation are still uncertain. We are optimistic that the prosperity of international food prices is expected to continue and will continue to support the application of overseas chemical fertilizer and the demand for replenishment. China's grain and prices are relatively safe and controllable, and China's grain prices will continue to operate smoothly.
2) overseas and export markets: the demand in the international market has warmed up and the supply has been blocked periodically, and the price difference of ammonium phosphate at home and abroad continues to expand. In recent years, under the background of high energy prices, poor global shipping, sharp rise in overseas food prices, combined with the large cycle of global replenishment of agricultural materials, and continuous fermentation of conflicts between Russia and Ukraine (Russia is the third largest phosphate fertilizer exporter in the world, accounting for 14% of global exports), the price of overseas phosphate fertilizer market has increased significantly. The price of phosphate fertilizer in China is regulated and controlled by supervision, and has maintained a stable operation trend in the near future. As of April 22, 2022, the price difference between FOB export price and China's ammonium phosphate has reached more than 3000 yuan / ton. According to Longzhong information and jinlianchuang data, at present, the FOB price of monoammonium phosphate in the Baltic Sea has risen to US $1195 / ton, and the quotation in China is about 3506 yuan / ton; The FOB price of diammonium phosphate in China has risen to 1090 US dollars / ton, and the quotation of diammonium phosphate in China is 3669 yuan / ton. Recently, the price difference between overseas phosphate fertilizer and Chinese phosphate fertilizer has continued to widen. Under the background of China's policy escort to ensure the stable supply and price of chemical fertilizer in China, we are optimistic that the price of phosphate fertilizer in China will run smoothly; Overseas spreads will remain high.
3) cost side of phosphate fertilizer: raw materials such as phosphate rock and sulfur rise, and the cost side is strongly supported. Recently, the quantity of sulfur replenishment ships is still limited, and the price of us gold sector remains strong; In the future, the supply side of phosphate rock is expected to continue to tighten under the background of higher industry access threshold and environmental protection and high pressure; The industrial structure adjustment of synthetic ammonia has achieved remarkable results. Since the end of 2020, the shortage of natural gas and the rise of coal price have promoted the rise of synthetic ammonia price. Supported by the cost side, the ammonium phosphate Market is relatively strong. We are optimistic that enterprises with the advantages of industrial chain integration and raw material self-sufficiency will have more significant advantages.
4) phosphate fertilizer supply side: the supply side reform has achieved remarkable results, and the national phosphate fertilizer output has decreased as a whole. On April 7, 2022, the Ministry of industry and information technology and other six departments issued opinions further pointing out that it is necessary to strictly control the new production capacity of ammonium phosphate, yellow phosphorus and other industries and accelerate the exit of inefficient and backward production capacity. We expect that in the next few years, some phosphate fertilizer enterprises that fail to meet the environmental protection standards will continue to stop production and limit production, and the market concentration will be more obvious. "Transformation and upgrading" will be the theme of the future fertilizer industry, and the new production capacity will be strictly limited.
4) phosphate fertilizer demand side: actively carry out spring ploughing and fertilizer preparation to ensure food safety production. The demand in spring has been basically released and the sickle of summer harvest is about to open. Since February 2022, spring ploughing has been gradually carried out, and the demand for agricultural materials has entered the peak season. Under the severe and complex situation of epidemic prevention and control in China, in order to do a good job in ensuring the supply and price of chemical fertilizer for spring ploughing this year, on the one hand, 11 departments and units such as the national development and Reform Commission issued a notice requiring all localities and relevant central enterprises to take multiple measures to ensure the supply of chemical fertilizer and the smooth operation of the market from the production, supply, storage and marketing of chemical fertilizer; On the other hand, in the early stage, the central government allocated 20 billion yuan to provide one-time subsidies to farmers who actually grow grain, alleviate the impact of rising prices of agricultural materials, stabilize farmers' grain income and mobilize farmers' enthusiasm for production. At present, according to the data of the Ministry of rural agriculture, the total demand for chemical fertilizer during spring farming is about 39.8 million tons (physical quantity), and the total supply of chemical fertilizer is 48.3 million tons (including production, inventory and import). On the whole, the total supply of chemical fertilizer in China is fully guaranteed; At the same time, with the help of ensuring the supply of chemical fertilizer, China has sufficient food supply and reserves, and food security is guaranteed.
Investment suggestion: phosphate fertilizer and phosphate chemical related enterprises are expected to fully benefit from this industry boom. We are optimistic that enterprises with the advantages of industrial chain integration and self-sufficiency of raw materials will have more significant advantages. It is suggested to pay attention to: Yunnan Yuntianhua Co.Ltd(600096) , Hubei Xingfa Chemicals Group Co.Ltd(600141) , Chengdu Wintrue Holding Co.Ltd(002539) , Hubei Yihua Chemical Industry Co.Ltd(000422) , Sichuan Development Lomon Co.Ltd(002312) , Kunming Chuan Jin Nuo Chemical Co.Ltd(300505) , Xinyangfeng Agricultural Technology Co.Ltd(000902) , etc.
Risk warning: the risk of sharp fluctuations in the price of raw materials; The risk that the demand for phosphate fertilizer is less than expected; The risk of a sharp downturn in the macro economy.
