Key investment points
Performance of the chemical sector this week: the overall market composite index fell slightly this week (April 18-april 23). The Shanghai Composite Index closed at 308692, up – 3.87% this week, the Shenzhen cost index rose – 5.12%, the small and medium-sized board 100 index rose – 3.64%, and the basic chemical sector fell broadly, up – 6.18%. Chemical stocks this week: the chemical sector fell broadly this week, down 6.18%. Among the stocks with the top gaingaingaingaingaingaingaingainamong the top ones are Nanjing Chemical Fibre Co.Ltd(600889) \ and Nantong Acetic Acid Chemical Co.Ltd(603968) . The guiding opinions on the high-quality development of chemical fiber industry is good for the stocks of chemical fiber sector. The opening of A-share chemical fiber sector is stronger, and many related stocks rise. Nanjing Chemical Fibre Co.Ltd(600889) as the stocks of this sector, the price rises and touches the limit.
Crude oil market dynamics this week: the epidemic affected the prospect of crude oil demand, and the international oil price fluctuated and fell. Ice oil distribution closed at US $106.65/barrel (Mom – 4.52%); WTI crude oil closed at US $102.07/barrel (Mom – 4.56%). Tracking of key chemicals: DMF (+ 12.30%), liquid chlorine (+ 7.16%), coke (+ 5.66%), butyl acrylate (+ 5.26%) and glufosinate (+ 5.19%) are among the chemicals we are concerned about this week. This week, the DMF market was in strong operation. In terms of cost, the market price of methanol, the main raw material of DMF, and synthetic ammonia, the by-raw material of DMF, fluctuated strongly. The main downstream factories started to operate smoothly, the cost support was strong, and the price of DMF rose. This week, the market price of liquid chlorine continued to rise. The demand for upstream and downstream chlorinated benzene was started, and some enterprises in Shandong were shut down for maintenance. The supply and demand sides were favorable, and the price continued to rise.
Bio based production of 1,3-propanediol breaks through the technical monopoly, and large-scale cost reduction production opens up market space: 1,3-propanediol (PDO) is a colorless, odorless and hygroscopic viscous liquid. As the main raw material for the development of biomass fiber PTT, it can replace ethylene glycol and butanediol to produce polyol polyester. China Tsinghua team took the lead in developing the technology of producing 1,3-propanediol PDO by fermentation of by-product crude glycerol, breaking through DuPont’s technological monopoly in the field of 1,3-propanediol. With the continuous improvement of bio based 1,3-propanediol industrialization technology and the expansion of application fields, the development prospect of 1,3-propanediol in China is very broad.
Main line of Chemical Investment: (1) cycle main line: economic recovery drives the improvement of the profitability of procyclical chemicals. (2) The main line of growth: the trend of technological application and innovation – market expansion and subdivision of growth tracks.
Risk warning: crude oil supply fluctuates sharply; The situation of trade war worsened; The risk of large exchange rate fluctuations; The risk of falling downstream demand.
