- Jan 15, 2018 -
Market Review: Last week, the chemical sector fell 0.89%, the Shanghai and Shenzhen 300 Index rose 0.34%, the chemical sector underperformed the CSI 300 Index over the same period 1.2 percentage points. As of the beginning of the year, the chemical industry segment gained 1.99% in total. The CSI 300 Index gained 3.13%. The chemical segment outstripped the Shanghai and Shenzhen 300 Index by 1.1% in the same period.
Product Price and Spread: Prices: In the last week, De'an Industrial fluorite powder (97% wet powder) in East China hit a price of 2,600 yuan / ton, up 18.2% over the previous week. The price of North American natural gas (New York spot) was up to 3.12 U.S. dollars per MMBtu, 11.4%; Sichuan Golden Elephant Ammonium nitrate (industrial) prices up to 2,000 yuan / ton, up 11.1% weekly; synthetic ammonia prices in Jiangsu reached 3,480 yuan / ton, up 10.5%; East China adipic acid prices up to 13,250 yuan / Week rose 8.2%; Sheng Hong chemical fiber POY (150D / 144F) price of 9200 yuan / ton, up 5.1%.
Spreads: last week, adipic acid spread rose 1,000 yuan / ton, up 8.16% weekly; MDI spreads rose 1,000 yuan / ton, up 3.25% weekly; polyester chip spreads rose 325 yuan / ton, 4.06% Rubber spread rose 300 yuan / ton, up 2.36% week; butadiene rubber spread up 250 yuan / ton, up 2.09%; calcium carbide spread PVC rose 172 yuan / ton, up 2.63% week.
Industry view: International crude oil prices hit a record high, the supply side tightened and the economic recovery in Europe and the United States became the main driving force. International crude oil Brent crude oil rose last week from 67.78 US dollars / barrel to 69.26 US dollars / barrel, or 2.1%, a record high since December 2014, as of January 5, the United States reduced the number of active oil wells 5 to 742 , Unchanged for the first time in three weeks at 747; the same time, OPEC production cuts continue to implement the agreement, Iran's internal problems continue to be fermented, the domestic crude oil prices driven by supply-side tightening continued to record highs. We are optimistic about the uptrend of international crude oil prices on the tighter supply side and demand-driven economic recovery in Europe and the United States. We expect follow-up crude oil prices to hit a record high in the turmoil. Sinopec Corp., the leading petroleum and petrochemical industry in China, benefited from crude oil prices Rising crude oil derivatives downstream prices continued to rise, while investment in the direction of crude oil refining will continue to expand heavy volume performance flexibility.
Hualu Hengsheng (600426): East China urea and adipic acid prices, the industry leader continued to benefit. Last week, East China Synthetic Ammonia prices rose from 3150 yuan / ton to 3480 yuan / ton, up 10.5%, an increase of up to 28.4%; East China adipic acid prices from 12,250 yuan / ton last week rose to 13,250 yuan / ton , An increase of 8.2% over the week, an increase of 18.8% over the same period. Hualu Hengsheng, the industry leader, has an adipic acid production capacity of 160,000 tons / year and an ammonia production capacity of 790,000 tons / year. Benefiting from the increase in product prices, the industry's leading performance elasticity has further expanded .
Lanfan Medical (002382) intends to acquire the global heart stent giant Parson International, into the field of high-end medical equipment. Lanfang Medical (002383) resumed trading last week with a proposed acquisition of 93.37% equity interest in CB Cardio Holdings II Limited (CBCHII) through the issuance of shares and cash payment. Biosensor International Group Ltd, a wholly-owned subsidiary of CBCH II, Engaged in R & D, production and sales of interventional cardiology instruments, Parsons International achieved sales revenue of RMB1,281 million and net profit of RMB244 million from January to October 2017. Parsons International committed to non-return after 2018-2020 The parent net profit of not less than 380 million, 450 million and 540 million yuan. The future company to enter the field of high-end medical equipment, a vast market space.
Industry Recommended Rating and Investment Direction: The chemical industry is facing a stable macroeconomic environment. In the past five years, the traditional chemical industry, which is inefficient and has environmental bottlenecks, ushered in the critical point of supply and demand balance with great price elasticity. Brent crude oil prices approached 70 US dollars / barrel, benefiting from tougher environmental policy, supply and demand in most of the traditional chemical sub-sectors returned to equilibrium, in the historical low stocks, the industry boom significantly improved. On the other hand, industry consolidation and new business volume will bring new development opportunities. We think the chemical industry benefited from the improvement of supply and demand and the demand of new downstream applications. The overall profitability of the industry continued to improve, and the "Recommended" rating of the industry was maintained.