Basic chemical industry: oil prices fell, anhydrous hydrofluoric acid, herbicides, butyl rubber products prices rose

Core recommendation

　　Basic chemical industry focus

　　Core assets (Wanhua Chemical, Hualu Hengsheng, Yangnong Chemical, Xinhecheng), titanium dioxide (Lomon Billions), carbon fiber (Guangwei Composite), spandex and polyurethane (Huafeng Chemical), food additives (Jinhe Industry), zeolite/OLED (Wanrun shares), pesticides (Yangnong Chemical, Guangxin shares), compound fertilizer (Xinyangfeng), lubricating oil additives (Ruifeng new materials), etc.

　　Petrochemical focus

　　OPEC+ joint production cuts form the bottom support of oil prices, but it is still necessary to pay attention to the impact of non-OPEC output (Canadian heavy oil, Brazil, Central Asia), global macroeconomic downside risks and further fermentation of trade risks on oil prices. It is recommended that the integrated construction of polyester industry chain accelerate and enter the excellent private refining and chemical enterprises (Rongsheng Petrochemical, Dongfang Shenghong, Satellite Petrochemical, Tongkun Shares, Hengli Petrochemical) that have entered the large-scale refining and chemical industry chain and laid out C2/C3 light hydrocarbon cracking); pay attention to Baofeng Energy.

　　Weekly industry updates

　　This week, the chemical price index fell, the core raw material oil price fell, LPG gas fell, LNG gas rose, coal prices fell; C2, C5, pesticides, rubber, vitamins and some product prices rose.

　　This week, china's chemical price index CCPI -5.7%; core raw material prices cloth oil -1.3%, imported LPG -6.4%, domestic LNG gas +8.5%, bituminous coal -37.0%.

　　At the raw material end, the prices of some products C2 and C5 rose, and the prices of some products of C1, C3 and aromatics fell; on the product side, the prices of some products of pesticides, rubber and vitamins rose, and the prices of chemical fiber, chlor-alkali, phosphorus chemicals, plastics and amino acids fell.

　　Oil prices fell this week, Iran's nuclear negotiations are about to restart, and the northern hemisphere is expected to cool down and heat up demand.

　　This week, the settlement price of cloth oil fell from 85.5 to $84.4/b (down 1.3%), the US oil settlement price fell from 83.8 to $82.6/b (down 1.4%); the US commercial crude oil inventory was 431 million barrels (+1.0% week-on-week), and the number of US crude oil rigs was 444 (+0.2% week-on-week). On the supply side, according to Longzhong Information, OPEC+ has not changed its slight production increase strategy of up to 400,000 barrels per day per month, and a new session will be held on November 4, US crude oil production will continue to stabilize and operate, and negotiations on the Iranian nuclear issue will soon restart. On the demand side, the global epidemic has recently worsened, but it is mainly concentrated in the European region, the bearish impact is limited, and as the weather in the northern hemisphere becomes colder, the shortage of natural gas leads to the increase in heating demand for turning to petroleum products. From a policy point of view, according to Longzhong information, although the Fed will begin to contract QE in November, the dovish style is obvious, and the interest rate hike will not come during the year, and the dollar only fluctuates in a narrow range, and the impact on oil prices is limited. From a geopolitical point of view, according to Longzhong Information, there are no vicious incidents in the Middle East and other places, and the impact on oil prices is limited.

　　Gas Price Tracking:

　　Price Tracking: This week (10.21-10.27) European and American natural gas futures prices diverge. NBP -7.05% M-Q, TTF -7.14% Q-M, North American natural gas futures up, HH +7.69% Q-O- and AECO +5.58% Q-O- Spot was mixed, with HH spot -3.31% Q-O, Canadian AECO spot +7.74% Q-O and European TTF spot -0.09% Q-O. In terms of spreads, the average price of LNG spot arrivals in Northeast Asia was 11063 yuan / ton, +2.57% month-on-month, the average sales price of receiving stations was 6804 yuan / ton, and the spread was +517 yuan / ton (+5.66%) month-on-month.

　　Inventory Tracking: As of Oct. 22, U.S. natural gas inventories were 3,461 billion cubic feet, +92 billion cubic feet (+2.73% month-on-month and -11.70% yoY), according to EIA data, still below the 5-year average. According to the European Gas Infrastructure Association, european gas inventories were 2,899.3 billion cubic feet as of October 22, or -71.7 billion cubic feet sequentially (-0.25% m/m, -19.45% yoY).

　　Domestic prices: The price rally in the main domestic LNG producing areas continued this week. As of October 28, the average price of LNG main production areas was 7307 yuan / ton, compared with +6.38% last week, +95% year-on-year; the price increase of consumer land was still large, as of October 28, the average price of LNG main consumer land was about 7590 yuan / ton, +8.99% over last week, +105.52% year-on-year. LNG receiving station quotation 7192 yuan / ton, +10.39% from last week, +101.74% year-on-year.

　　Key Chemicals Viewpoint Update:

　　Chemicals Price Increase and Decrease:

　　The most important products with the highest price increase this week are vitamin B5 (calcium pantothenate) (98%) +21%, bifenthrin (99%) +17%, anhydrous hydrofluoric acid +17%, pyridine +17%, paraquat +15%, hexafluoropropene +13%, butyl rubber +13%, trichloroethylene +9%, acetonitrile +9%, antioxidant 4020+7%, acrylamide +7%, ethylene oxide +5%, etc. The important products with the highest price decline this week are ammonium sulfate -22%, formaldehyde -22%, PVC (ethylene method) -19%, butadiene -16% and so on.

　　New energy upstream chemical price increase and decrease:

　　Photovoltaic industry chain related chemicals: industrial silicon -3%, trichlorosilane flat, soda ash (light flat, heavy -1%), vinyl acetate +4%, EVA (photovoltaic grade) equal. Lithium battery industry chain related chemicals: phosphate ore (30%) flat, phosphoric acid -14%, lithium carbonate (industrial grade +2%, battery grade +6%), iron phosphate -8%, industrial monoammonium phosphate (73%) flat, lithium hexafluorophosphate equal.

　　The cost support is strong, and the double control leads to tight supply in the market, which raises the price of anhydrous hydrofluoric acid.

　　This week, anhydrous hydrofluoric acid (East China) rose 17.0% to 13750 yuan / ton. On the cost side, this week's fluorite powder (wet powder, East China) rose 0.9% to 2675 yuan / ton, the cost side of the support is firm; the demand side, according to Baichuan Yingfu, the refrigerant market heat is not reduced, the acceptance of the anhydrous hydrogen fluoride market is acceptable; the supply side, according to Baichuan Yingfu, affected by the inspection of the Ministry of Emergency Management and the recently introduced dual control policy, some domestic devices are parked, power rationing leads to a reduction in the operating load in East China, and the supply of domestic sources is tight, forming a strong supply side.

　　Pyridine forms cost support, supply-side power curtailment remains the same, and paraquat prices rise.

　　Prices of herbicide products rose generally this week, with paraquat (East China) rising 14.6% to 23,500 yuan / tonne. On the cost side, this week pyridine (East China) rose 16.7% to 28,000 yuan / ton, forming a strong cost end support; demand side, market on-demand procurement; supply side, according to Baichuan Yingfu, East China power rationing is still the same, while the problem is also the steam price increase, the formation of a strong supply side is good.

　　Isobutylene is running at a high level, the market supply is tight, and the price of butyl rubber is rising.

　　This week, butyl rubber (1751, Yanshan Petrochemical) rose 12.9% to 17500 yuan / ton. On the cost side, the recent high level of operation of the isobutylene market supports costs; on the demand side, users maintain the policy of buying as they go, just need to purchase; the supply side, according to Baichuan Yingfu, the supply of some goods in the market is tight, and Ningbo Formosa Plastics Butyl Rubber Device (annual production capacity of 50,000 tons) continues to form a favorable parking.

　　By-product method manufacturers started to work lower, synthetic production method manufacturers started sluggishly, jointly pushing up the price of acetonitrile.

　　This week, acetonitrile (Jilin Petrochemical) rose 9.1% to 24,000 yuan / ton. On the demand side, according to Baichuan Yingfu, the current downstream pesticide and pharmaceutical demand as a whole is general, and more maintenance is just needed to purchase; on the supply side, according to Baichuan Yingfu, most of the synthetic method manufacturers stop, while by-production method enterprises are limited by the impact of electricity curtailment, and the output is also reduced synchronously, and the spot supply of acetonitrile continues to be tight this week.

　　The downstream price is stable at a high level, and individual parking companies have not yet recovered, supporting the price of trichloroethylene.

　　On Wednesday, vinyl chloride (East China) rose 9.1% to 22647 yuan / ton. On the demand side, the price of downstream refrigerants is stable at a high level, and the market trading atmosphere is good; on the supply side, according to Baichuan Yingfu, individual parking enterprises have not yet recovered, and production enterprises in East China and Southwest China maintain the existing operating load.

　　Risk warning: raw material price fluctuations, downstream demand is less than expected, etc.