Key points
Chemical fertilizer: due to the impact of covid-19 epidemic, under the background of food security and relatively unstable supply chain, international food prices have risen in an all-round way since 2020. In the context of high food prices, farmers around the world have generally increased their willingness to plant, which has driven the continuous increase of global demand for chemical fertilizer. In addition, on the supply side, as an important producer and exporter of chemical fertilizer in the world, Russia’s sanctions by European and American countries have also significantly reduced the global supply of chemical fertilizer. On the whole, the global shortage of chemical fertilizer has led to a further rise in the price of chemical fertilizer in 2022 on the basis of 2021.
Potash fertilizer: as Belarus and Russia are successively sanctioned by European and American countries, nearly 40% of the world’s potash production will be affected, resulting in the overall contraction of potash fertilizer supply. Under the dual action of demand and supply, the price of potash fertilizer products has risen sharply. As of April 22, the average import price of potash fertilizer in China was 4808 yuan / ton, an increase of 28.3% compared with the beginning of 2022. Benefiting from the higher price of potash fertilizer, the performance of potash fertilizer enterprises will be significantly improved.
Phosphate fertilizer: in March 2022, China’s exports of monoammonium phosphate and diammonium phosphate increased significantly month on month, with a significant increase of 111% and 233% respectively. The significant increase in ammonium phosphate export volume in March 2022 released a positive signal of the gradual liberalization of China’s ammonium phosphate export restrictions. As of April 22, the international prices of monoammonium phosphate and diammonium phosphate were 108% and 117% higher than those in China, respectively. With the gradual liberalization of China’s ammonium phosphate export, leading enterprises, with their huge supply capacity, are expected to give priority to obtaining corresponding export quotas, so as to fully enjoy the dividend of international prices and help the company’s performance rise.
Nitrogen fertilizer: due to the low actual operating rate of urea in the world, the export of nitrogen fertilizer and natural gas in Russia is limited. The problem of global urea supply in short supply has further intensified. Since 2021q4, the price difference between international and Chinese urea has expanded significantly. In the follow-up, the problem of global urea supply shortage is difficult to be solved in the short term, and the international urea price will remain at a high level. With the liberalization of subsequent exports, the profitability of Chinese urea enterprises is expected to increase. In addition, due to the gradual rise of China’s coal price, the cost advantage of natural gas to urea is more prominent.
Weekly rise and fall of sectors: in the past five trading days, most sectors in Shanghai and Shenzhen stock markets showed a decline. This week, the Shanghai stock index fell by 3.87%, the Shenzhen Component Index fell by 5.12%, the Shanghai and Shenzhen 300 index fell by 4.19% and the gem index fell by 6.66%. CITIC basic chemical fell 6.0%, ranking 21st in all sectors.
Rise and fall of individual stocks: in the past five trading days, the top gainers in the basic chemical sector are: Cybrid Technologies Inc(603212) (+ 20.94%), Nanjing Chemical Fibre Co.Ltd(600889) (+ 15.98%), Jiangsu Lopal Tech.Co.Ltd(603906) (+ 15.47%), Zhejiang Huasheng Technology Co.Ltd(605180) (+ 14.63%), Jiangsu Suyan Jingshen Co.Ltd(603299) (+ 14.10%).
Investment suggestions: (1) the upstream oil and gas sector is suggested to pay attention to Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) , CNOOC, Enn Natural Gas Co.Ltd(600803) and other oil service targets. (2) White horse, the leader of undervalued chemical industry: it is suggested to pay attention to ① three chemical white horses: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) ; ② Private refining and chemical fiber sector: Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengyi Petrochemical Co.Ltd(000703) , Tongkun Group Co.Ltd(601233) , Xinfengming Group Co.Ltd(603225) ; ③ Light hydrocarbon cracking sector: Satellite chemistry, Oriental Energy Co.Ltd(002221) ; ④ Coal to olefin: Ningxia Baofeng Energy Group Co.Ltd(600989) . (3) Plate: sector sector of new material sector: suggestions and concerns: sector sector sector: sector sector of sector: sector of sector: sector of sector: sector of sector: sector of sector: the following concerns: ① semiconductor materials: the Crystal Clear Electronic Material Co.Ltd(300655) ; ② Wind power materials: carbon fiber, polyether amine, matrix resin, interlayer materials, structural adhesive and other related enterprises; ③ Lithium battery materials: electrolyte, lithium battery diaphragm, phosphorus chemical industry, fluorine chemical industry and other related enterprises; ④ Photovoltaic materials: upstream silicon materials, EVA, soda ash and other related enterprises; ⑤ OLED industry chain: Valiant Co.Ltd(002643) , Xi’An Manareco New Materials Co.Ltd(688550) , Jilin Oled Material Tech Co.Ltd(688378) , Puyang Huicheng Electronic Material Co.Ltd(300481) . (4) Traditional cycle sector: it is suggested to pay attention to relevant targets in the fields of pesticides, coal chemical industry, urea, dyes, vitamins, chlor alkali, etc.
Risk analysis: the risk of rapid decline and high oil price; Lower risk than expected downstream demand.
