This week’s Chemical Market Overview
Since the beginning of this year, the market has been under pressure due to the disturbance of many factors, such as overcrowding of some tracks, decline in cost performance, Russia Ukraine war, inflation, fed interest rate hike, China US relations and epidemic situation; Recently, the market has been under further pressure due to the impact of the Chinese epidemic. We believe that a large part of the bad has been reflected in the stock price. Looking back, the upward momentum will gradually be greater than the downward momentum. Looking back this week, the market continued to be under pressure. Among them, the Shenwan chemical index fell 6.18%, underperforming the Shanghai and Shenzhen 300 index by 1.99%. In terms of targets, the targets with better than expected performance have strong performance, while the targets with poor performance + excessive increase in the early stage are under pressure.
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 Ministry of industry and information technology refined and implemented various measures to ensure the stability and smooth supply chain of key industrial chains and the normal production and operation of enterprises. Establish a daily scheduling mechanism for leading enterprises in key industrial chains such as automobile, integrated circuit, consumer electronics, equipment manufacturing, agricultural materials, food and medicine, so as to ensure the stable production of key enterprises and the smooth operation of key industrial chains; Strengthen the accurate support of communication big data for smooth logistics and optimize the communication journey.
Us natural gas prices soared to the highest level in 13 years: US natural gas prices soared to a 13 year high, and China’s strong demand tested the ability of us shale gas drillers to expand supply. The price of natural gas futures in New York once rose 4.8% to $7.652 per million BTU on April 18, exceeding the short squeeze in January and about doubling the level at the beginning of the year. The US Energy Information Administration (EIA) announced last week that US natural gas inventories had increased by 15 billion cubic feet in the week ended April 18, but less than half the average increase in the past five years. Us natural gas inventories are still 18% below normal levels.
The Ministry of agriculture and rural areas has taken many measures to ensure the fertilizer for spring farming: in view of the current high price of chemical fertilizer in China, the Ministry of agriculture and rural areas has proposed to take multiple measures to ensure the supply of chemical fertilizer and the smooth operation of the market. During spring ploughing this year, the total demand for chemical fertilizer is about 39.8 million tons, 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 is guaranteed. With the continuous development of spring ploughing, all localities have strengthened the protection and supply of agricultural materials, and the availability rate of chemical fertilizer has increased steadily, which can meet the fertilizer demand of spring ploughing at the grass-roots level. In order to ensure the supply and price of chemical fertilizer for spring ploughing this year, the national development and Reform Commission, together with 11 departments and units such as the Ministry of industry and information technology and the Ministry of agriculture and rural areas, recently 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. In the early stage, the central government has 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. In the next step, the Ministry of agriculture and rural areas will continue to work with relevant departments and units to pay close attention to the market situation of spring ploughing agricultural means of production, actively promote enterprises to improve capacity utilization, give full play to the role of reserve regulation, smooth the transportation and distribution channels of chemical fertilizers, increase the transportation, marketing and stock up in key grain producing areas and areas with strong demand for chemical fertilizers, and ensure adequate grain output.
Investment advice
At present, the investment direction is still to defend the market. It is suggested to give priority to high-quality chemical leaders with undervalued value, such as Wanhua Chemical Group Co.Ltd(600309) . Secondly, it is suggested to pay attention to the midline layout opportunities brought by the oversold of growth stocks.
Risk tips
The epidemic affects demand outside China, crude oil prices fluctuate violently, and changes in international policies affect industrial layout
