2021 Chemical industry development Research Report

Industry profile

As an important basic industry of the national economy, the chemical industry contains tens of thousands of product types, each with different physical and chemical characteristics. The consumption of chemical products is closely related to the state of the national economy, mainly distributed in infrastructure, real estate, agriculture, automobiles, clothing and other fields of the national economy. As the space for economic growth driven by investment in fixed assets is gradually limited, the development of the domestic economy has entered a new stage, and the growth of demand for chemical products, mainly industrial products, has also been correspondingly affected. However, the demand for chemicals related to emerging industries and consumption upgrading will maintain rapid growth. Chemical products are widely used in various areas of the national economy, and the classification according to downstream application areas helps to better view the chemical industry from the perspective of demand. According to the application field, there can be dozens of typical chemical sub-industries, such as agricultural chemicals, electronic chemicals, new energy chemicals, textile chemicals, etc., the production process and raw material sources vary widely, but the change in downstream demand drives the boom of the corresponding upstream chemicals, and may even lead to significant changes in the demand and price of the products in the entire application field.

As of the end of December 2019, there were 26,271 enterprises above designated size in the petroleum and chemical industries, with an operating income of 12.27 trillion yuan and a total profit of 668.37 billion yuan, accounting for 11.6% and 10.8% of the operating income of large-scale industries in the country respectively. In 2019, the total import and export volume of the petroleum and chemical industry was 722.21 billion US dollars. Total assets totaled 13.40 trillion yuan, with an asset-liability ratio of 55.92%. The loss of loss-making enterprises was 132.08 billion yuan, up 9.7% year on year. The industry lost 17.6%. In 2019, the industry-wide operating income profit margin was 5.45%, and the cost per 100 yuan of operating income was 82.67 yuan.

As of April 22, 2021, the number of Shanghai and Shenzhen constituent stocks of the chemical sector (Wind) was 161, which showed an upward trend in recent years. The total market value of the enterprise has increased year by year in recent years. As of April 22, 2021, the total market value of the enterprise is 1678.842.45 billion yuan, and the total number of employees of the enterprise has reached 41,600.

Due to the resource characteristics of rich coal, poor oil and little gas in China, compared with the ethylene method commonly used abroad, calcium carbide method has more cost advantages. As the two main products, caustic soda and PVC are symbiotic, but the downstream of the two are different, and the gross profit margin is different. There are often cases of chlorine (loss) with alkali (profit), but due to the influence of domestic overcapacity, the operation mode of chlorine with alkali is also constantly challenged.

Fine chemical industry

Compared with the production scale of mass chemicals with a total of tens of millions of tons, the production scale of fine chemicals is generally small, and has its own application fields. This makes it more difficult for enterprises to use the short-term business cycle to achieve rapid expansion of profits, and the research and development costs of a single variety may also be higher. But on the other hand, the difficulty of research and development of fine chemicals can help enterprises build competitive barriers and maintain relatively stable prices and gross margins. At the same time, fine chemical enterprises with advantages in specific product fields can also achieve product line expansion with low research and development costs through different products of similar processes, and achieve long-term sustained and stable growth. From the perspective of Fortune 500 companies in the chemical industry, most of them realize a broad product line and have their advantages in some areas.

Chemical fiber

The full name of chemical fiber chemical fiber refers to natural or artificial synthetic polymer compounds as raw materials, through the preparation of spinning stock, spinning and post-processing and other processes produced with textile properties of fiber, is widely used in people's clothing, food, housing and transportation aspects. In terms of raw materials, chemical fibers can be divided into man-made fibers and synthetic fibers. Artificial fiber is made of wood, bamboo, pulp, waste cotton yarn and other natural cellulose materials as raw materials, after polycondensation or polycondensation reaction to synthesize organic polymer compounds, products include viscose staple fiber, viscose filament and acetic acid filament; Synthetic fiber with oil, natural gas and coal as raw materials, through complex chemical reaction synthesis of polymer, commonly used products include polyester, nylon, acrylic, spandex and so on. Generally speaking, the study of chemical fiber industry chain is based on the polyester industry chain, and the future investment opportunities are judged by analyzing the upstream and downstream supply and demand relationship.

The main participants in the upstream of China's chemical fiber industry chain are chemical fiber production raw materials and equipment providers, and the development of both is as follows:

(1) Raw material supplier chemical fiber upstream raw materials mainly include PTA (refined terephthalic acid), MEG (ethylene glycol) required for the production of polyester and caprolactam required for the production of nylon.

(2) Equipment supplier chemical fiber upstream equipment mainly includes polymerization, spinning, drawing, winding, post-processing and other key process equipment and nozzle, spinneret, winding and other equipment group accessories. At present, China's chemical fiber equipment market shows the coexistence of local and international brands.

The bargaining position of chemical fiber producers in the middle reaches is differentiated according to different product varieties, and the producers of varieties with larger production scale (represented by polyester) and differentiated varieties have stronger bargaining power.

The direct downstream of chemical fiber products is textile manufacturers, which is in a weak bargaining position as a whole, mainly including warp knitting, knitting, wool spinning, industrial silk and other weaving industries.

Chemical fertilizer and pesticide

Upstream: China has scarce potash mineral resources, potash raw materials and products have been imported for a long time, and potash production enterprises are concentrated in Qinghai, Xinjiang, Xichuan and other potassium-rich regions.

Middle reaches: In the urea production process, the gas fluidized bed coal head process can choose anthracite, bituminous coal and lignite as raw materials, and the production cost is low and the environmental pressure is moderate.

Downstream: fertilizer sales are highly dependent on offline channels, and the contribution rate of agricultural distribution stores to the sales of fertilizer products is as high as 90%, and the online channel sales account for no more than 5%.

Chemical fertilizer industry characteristics

(1) Greatly affected by national policies and still subject to state intervention

The predecessor of the fertilizer industry was controlled by the state, and the upstream industries of fertilizer, including power and coal, are still state monopolies. The state implements two policies of protection and restriction on the fertilizer industry.

(2) Fierce competition in the industry and low concentration

China's fertilizer industry enterprises are numerous, widely distributed, and local barriers are serious, resulting in low industry concentration, serious product quality, and fierce competition in the low-level market.

(3) At a disadvantage in the market value chain competition

Has little say in negotiating energy prices. Therefore, the fertilizer industry is squeezed at both ends, and the competitive disadvantage of the industry is extremely obvious.

(4) Import and export have little impact on the industry

Due to the country's import and export restriction policy, in addition to the current import volume of potash fertilizer accounts for 70% of domestic use, the import and export volume of the remaining varieties accounts for about 5% of domestic production, so the import and export impact on the industry is small.

(5) Obvious resource characteristics

The main upstream resources of nitrogen fertilizer include coal, natural gas and crude oil, in terms of the world, natural gas accounts for a relatively high proportion, while in China, coal accounts for 71%, natural gas accounts for only 23%, and crude oil products are relatively few.

(6) Seasonality and periodicity

Fertilizer is a commodity that is produced all year round and consumed seasonally. According to the growth cycle of crops, the demand for fertilizer has low and high seasons.

Technological development

According to the statistics of the number of patents of each patent applicant in the domestic chemical industry, the top ten chemical companies are successively: Sinopec, Times New Materials, Qingdao Jinwang, Jinfa Technology, Shanghai Jawa, Wanhua Chemical, Subot, Knop, General Stock, Shanghai Petrochemical, etc.

Light stabilizer in fine chemical industry is an additive that inhibits or slows down the degradation of polymer materials caused by photooxidation. Mainly used in plastics, coatings, rubber, chemical fibers, adhesives and other polymer materials and other special polymer materials, of which plastics is the largest downstream application field.

Chlorination process: Domestic companies take the lead in absorbing and mastering the mass production process of chlorination titanium dioxide. The chlorination process has low pollution and high product quality.

Technological innovation in the fertilizer and pesticide industry, the development of endogenous expansion of fungicide varieties, such as phenoxyconazole, policy supervision

The chemical industry is one of the basic industries of the national economy, especially the petrochemical industry, which is closely related to people's lives. The state's management of this industry is mainly based on the development of the industry, improving the policies on industrial market entry and operation and circulation, establishing a fair market competition order, and formulating and implementing reasonable internal and external trade policies. Through functional departments in accordance with the industrial policy to implement the combination of macro-control of government departments and industry association regulation and self-discipline management of the supervision system, to promote the intensive and large-scale development of enterprises. The National Development and Reform Commission undertakes the macro-control function of the chemical industry, mainly responsible for studying and analyzing the industrial development situation, organizing the formulation of industrial policies, putting forward policy suggestions for optimizing the industrial structure, ownership structure and enterprise organizational structure, and supervising the implementation of industrial policies.

Industry authority

The Ministry of Industry and Information Technology undertakes macro-control and partial approval functions, and is mainly responsible for formulating and implementing chemical industry planning and industrial policies, and guiding the formulation of technical regulations and industry standards for the chemical industry.

Trade associations and self-regulatory organizations

China Petroleum and Chemical Industry Federation is a self-regulatory management organization of the chemical industry, and undertakes the functions of industry guidance, service and management. It is mainly responsible for industry and market research, providing public services to member enterprises, participating in the formulation of industry planning, industry self-discipline management, and putting forward industrial development suggestions and opinions to the government on behalf of member enterprises.