Oil and gas prices fluctuated sharply, and the prices of potassium fertilizer and phosphorus fertilizer continued to rise; Semiconductors and new energy materials are highly concerned.
Industry trends:
Among the 101 chemical varieties tracked by the average price this week, the prices of 38 varieties rose, 29 varieties fell and 24 varieties remained stable. The top five varieties are phosphate rock (Morocco), glufosinate, NYMEX natural gas, Do-Fluoride New Materials Co.Ltd(002407) aluminum fluoride and WTI crude oil; The top five varieties of decline were trichloroethylene, urea (Baltic small grain), R134a, coal tar and PA66.
WTI crude oil closed at US $101.75/barrel this week, with the closing price down 4.86% this week; Brent crude oil closed at US $105.72/barrel, closing down 5.35% this week. This week, the IMF lowered its economic growth expectations, the Shanghai epidemic was still at a high level, the output of Libya’s largest oil field was interrupted, the EIA crude oil inventory was significantly reduced, and the crude oil price fluctuated and fell. On April 19, the IMF released the latest world economic outlook report, which predicted that the global economy would grow by 3.6% in 2022, down 0.8 percentage points from the forecast in January. According to EIA data, as of the week of April 15, U.S. crude oil inventories decreased by 8.02 million barrels, and the market is expected to increase by 2.471 million barrels. On April 21, Powell, chairman of the Federal Reserve, said that the Federal Reserve may raise the federal funds rate by 50 basis points at its policy meeting in May, and said that a similar rate increase may be needed thereafter. In the future, Russia and Ukraine may launch a tug of war in eastern Ukraine, and the Fed may raise interest rates faster than expected. The epidemic in Shanghai and surrounding areas has reduced China’s demand for crude oil imports, and oil prices are expected to be under pressure in the short term.
DMF prices rose broadly this week. According to Baichuan Yingfu data, DMF closed at 13700 yuan / ton in East China, with a closing price increase of 12.30%. Affected by the strong operation of main raw material methanol and by-product synthetic ammonia, DMF’s cost side support was obvious this week, and the price stopped falling and rebounded. In terms of downstream demand, due to the large decline in DMF price in the early stage, downstream Pu slurry manufacturers have high enthusiasm for taking goods. However, due to the impact of the epidemic, the logistics in many places is not smooth recently, and the operating rate of downstream Pu slurry devices is generally low, so it is difficult for the overall DMF demand to improve significantly. In the future, the downstream Pu slurry demand is expected to be poor, the pharmaceutical, electronics, food and other industries purchase on demand, and the recent prices of DMF raw materials methanol and synthetic ammonia continue to rise. It is expected that DMF may maintain a stagflation trend under the recent supply and demand game.
The price of glufosinate continued to rise this week. According to the data of Baichuan Yingfu, the average market price of glufosinate closed at 202500 yuan / ton, with a closing price increase of 5.19%. Affected by the strong demand from outside China, the eagerness of buyers to place orders, the low spot circulation in the market, the impact of the epidemic on transportation and other factors, the orders of China’s mainstream manufacturers have been scheduled to June, and the price of glyphosate has returned to the upward track. Meanwhile, at present, it is the peak season of overseas demand for glyphosate, the shipping in Shanghai port is blocked, and overseas downstream manufacturers place orders and prepare goods in advance, with obvious demand side momentum. In the future, with the slow recovery of transportation in Shanghai port, the delayed orders of glufosinate are being shipped one after another, and there will be more new capacity in the glufosinate market in the future. It is expected that the upward space of glufosinate price is limited.
Investment suggestions:
This week’s view
Cyclical industries: crude oil runs at a high level and the price transmission continues. As of April 1, 2022, the average monthly price of 68% of the tracked products has increased month on month; The average monthly price of 24% of products fell month on month; In addition, the price of 8% products was flat. As of April 17, 2022, the monthly average price of WTI crude oil increased by 3.05% month on month, and the monthly average price of Brent crude oil increased by 4.4% month on month. Industry data: in March 2022, the PPI index of the chemical industry was 110, down 2.3% from February 2022. In terms of policy, the 14th five year plan for modern energy system was released. The plan pointed out that under the background of more secure and powerful energy security, the proportion of non fossil energy power generation will reach about 39% by 2025. The medium and long-term plan for the development of hydrogen energy industry (20212035) was released, and the top-level design of hydrogen energy industry chain was gradually implemented. The raw materials fluctuated sharply and are optimistic about the leading companies in the integrated industry. Especially in the context of industrial upgrading and concentration improvement under the background of carbon neutrality, leading companies have strong anti risk ability and obvious advantages.
Growth companies: the rise of lithium carbonate slowed down. According to the data of Shanghai Nonferrous Metals network, as of April 15, 2022, the average price of battery grade lithium carbonate closed at 494000 yuan / ton, falling below 500000 yuan / ton. The Ministry of industry and information technology and the State Administration of market supervision organized and held a symposium on the operation of lithium industry and the price rise of upstream materials of power batteries on March 16 and March 17, pointing out that upstream and downstream enterprises in the industrial chain should strengthen the connection between supply and demand, work together to form a long-term and stable strategic cooperative relationship, and jointly guide the rational return of lithium salt price. In terms of semiconductor materials, according to the latest semi report data, the global semiconductor material market revenue was about US $64.3 billion in 2021, with a year-on-year increase of 15.9%, reaching a new high. Among them, the revenue of China’s semiconductor material market was about US $11.9 billion, a year-on-year increase of 21.9%.
Investment suggestion: the chemical industry chain is long, the raw materials fluctuate violently, the downstream price transmission lags behind, and the supply and demand of different products determine different transmission degrees. Some products and sub industries may face poor transmission and loss of profits. In the selection of sub industries, it focuses on integration and high view. From the perspective of sub industry prosperity, upstream petrochemical refining, Shenzhen Agricultural Products Group Co.Ltd(000061) related agrochemicals, infrastructure related chemicals, semiconductor materials and new energy materials are expected to maintain a high prosperity. Recommended shares: followinga series of recommended shares: followinga Wanhua Chemical Group Co.Ltd(600309) \ , Sobute New Materials Co.Ltd(603916) , Shandong Sinocera Functional Material Co.Ltd(300285) , Sunresin New Materials Co.Ltd Xi’An(300487) , etc., pay attention to Yunnan Yuntianhua Co.Ltd(600096) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , etc.
April golden shares: Zhejiang Nhu Company Ltd(002001)
Risk tips
1) the oil price fluctuates greatly due to the change of geopolitical factors; 2) The global epidemic situation has changed.
