Performance of the sector this week: this week (January 17-january 21, the same below) the market composite index rose or fell. The Shanghai Composite Index closed at 3521.26, up 0.04% this week, the Shenzhen Component Index fell 0.86% this week, and the chemical sector (Shenwan) fell 4.32%. Performance of individual chemical stocks this week: the chemical sector fell broadly this week, weaker than the big market. Some stocks still rose against the market, with Shandongsino-Agriunitedbiotechnologyco.Ltd(003042) , Shanxi Huhua Group Co.Ltd(003002) , Shenzhen King Explorer Science And Technology Corporation(002917) , Hubei Forbon Technology Co.Ltd(300387) , Yingtai Biology (delisting), Shanghai Jahwa United Co.Ltd(600315) , Guangxi Hechi Chemical Co.Ltd(000953) , Nafine Chemical Industry Group Co.Ltd(000737) , Hubei Shuanghuan Science And Technology Stock Co.Ltd(000707) , Jiaxian shares (delisting), etc. The Shandongsino-Agriunitedbiotechnologyco.Ltd(003042) target of pesticides rose 31.80% this week, leading the chemical sector. This week, the civilian explosives industry rose sharply, Shanxi Huhua Group Co.Ltd(003002) , Shenzhen King Explorer Science And Technology Corporation(002917) rose 28.07% and 23.67% respectively.
This week’s crude oil market dynamics: geopolitical tensions superimposed on the International Energy Agency raised its oil demand forecast, and crude oil prices rose in an all-round way. Ice oil distribution closed at US $87.89/barrel (2.13% MoM); WTI crude oil closed at US $85.14/barrel (1.57% MoM). Tracking of key chemicals: octanol (+ 17.48%), butyl acrylate (+ 9.70%), industrial grade lithium carbonate (+ 8.05%), liquid chlorine (+ 7.49%) and battery grade lithium carbonate (+ 7.46%) were among the chemicals we focused on this week. This week, octanol manufacturers had tight inventory, the downstream plasticizer industry had high procurement demand, and the market price rose sharply. The operating rate of butyl acrylate factory was low this week, and some mainstream factories executed export orders. The spot supply in the market was tight and the price continued to strengthen. This week, the supply of lithium source in the upstream of lithium carbonate was tight, the price of auxiliary materials rose, manufacturers stopped for maintenance, the spot supply was tight, and the price continued to rise. This week, the operation of the upstream alkali plant of liquid chlorine in East China was stable, the downstream demand changed little, and the price increased slightly, but the price decreased in some areas.
The advantages of covid-19 oral drugs are frequent, and the boom of pharmaceutical intermediate industry chain is rising: on December 22, 2021, Pfizer announced that FDA approved the emergency use authorization of its oral covid-19 therapeutic drug paxlovid, which is used to treat mild to moderate covid-19 adult and child patients. It is the second oral antiviral drug in the world to enter clinical application after methadone. On January 20, 2022, the pharmaceutical patent pool Organization (MPP) announced that it had signed an agreement with 27 pharmaceutical companies to allow them to produce and supply molnupiravir, an oral anti covid-19 virus drug, for some low – and middle-income countries or regions in the world.
Main lines of Chemical Investment: (1) cyclical growth stocks are expected to improve marginally: since the turning point of Q2 chemical boom in 2020, the prices of some chemicals have risen to historic highs. As the mismatch between supply and demand moves towards balance and superimposes the downward pressure of the economy, the traditional chemical cyclical stocks have made a sharp correction. We believe that we should focus on the industry leaders with continuous production expansion capacity in the 14th five year plan, supplement the price with quantity, especially the high-quality companies that embrace change and look for the second growth curve, which are expected to cross the cycle in the medium and long term. Key recommendations: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , satellite chemistry, China National Chemical Engineering Co.Ltd(601117) , Ningxia Baofeng Energy Group Co.Ltd(600989) , lithium iron phosphate industrial chain and soda ash industrial chain. (2) Focus on high-end manufacturing and supporting materials for high-tech industries, including biosynthesis, electronic materials, degradability, tail gas treatment, carbon fiber, etc. Key recommendations: Haohua Chemical Science & Technology Corp.Ltd(600378) , Valiant Co.Ltd(002643) . (3) The pesticide industry chain entering the business cycle will focus on
Risk warning: crude oil supply fluctuates sharply; The situation of trade war worsened; The risk of large exchange rate fluctuations.
