Analysis of the development status and future trends of the chemical industry in 2022 The European chemical industry takes natural gas as the main energy supply

Review of the chemical industry since the beginning of the year

1.1 Chemical Index

Since the beginning of the year, the western chemical Index has outperformed the Shenwan industrial chemical index. On April 30, 2022, the Western chemical line index was 111.61, +3.26% since the beginning of the year, the price rise and fall index was 113.11, +4.24% since the beginning of the year, and the Shenwan industry chemical index was 4030, -18.71% since the beginning of the year.

1.2 Price rise and fall ranking

Calcium pantothenate: On April 30, 2022, the price of calcium pantothenate was 335 yuan /kg, an increase of +332.3% since the beginning of the year, and an increase of +403.8% over the same period last year. The production of raw material panthenolactone is restricted by environmental protection and the shortage of raw material isobutyral supply, which restricts the production of calcium pantothenate and decreases the supply of calcium pantothenate. The downstream feed farming industry on the demand side started relatively high in the beginning of the first quarter, forming a strong support for calcium pantothenate demand.

Butadiene: On April 30, 2022, butadiene (FOB Korea) and butadiene (East China) were quoted at 1418.6 US dollars/ton and 9850 yuan/ton, respectively, an increase of +148.9%/+111.4% since the beginning of the year, and an increase of +50.9% and +36.8% over the same period last year. This round of price increase is the external disk YNCC device continuous parking pull up external disk price: On February 11, South Korea YNCC No. 3 cracker (containing 180,000 tons of butadiene) was stopped for maintenance due to an explosion, and the butadiene operating rate decreased by 15%. On February 22, the No. 1 cracker (containing 200,000 tons of butadiene) was stopped due to power failure due to lightning strike, and the No. 3 cracker was restarted until April 3. Unit 1 has not yet been restarted. Demand side synthetic rubber and ABS are operating at low load due to poor start of terminal tire enterprises, and demand is relatively weak. At the raw material end, the oil price continued to rise under the impact of the Russia-Ukraine incident, and the raw material end formed an effective support. In summary, the current surge in butadiene is mainly due to the contraction of overseas supply, resulting in a series of high prices in the external and internal disks.

Formic acid: On April 30, 2022, formic acid quoted 9,600 yuan/ton, an increase of +118.2% from the beginning of the year, and an increase of +317.4% from the same period last year. This round of formic acid upward cycle began in early March, rising due to the continuous maintenance of a large domestic enterprise led to a sudden reduction in supply, due to the concentration of formic acid industry capacity, so the supply of the whole industry has a greater impact. The demand side of the spring ploughing season is coming, the demand support is strong. The methanol of the raw material continues to be positive, which also forms a good support for the price.

1.3 Domestic and foreign chemical price difference ranking

Compare the price difference of key chemicals at home and abroad:

Epoxy resin (solid) has the largest price difference between Europe and China. In April 2022, the current price of epoxy resin (solid) in China is $3,580.6 / ton, the current price in Europe is $6,022.3 / ton, and the current price in the United States is $8,597.9 / ton; The difference between China and Europe reached 2,441.7 US dollars/ton, and the difference between China and the US reached 5017.3 US dollars/ton, and the difference between China and the US reached 68% and 140% of the current domestic price respectively. The main reason for the difference is that in 2020-2022, the prices of foreign raw materials bisphenol A and epichlorohydrin are rising, and overseas chemical giants are gradually increasing their quotations, while at the same time, the prices of domestic chemical raw materials are stable or even falling, so the difference between home and abroad is gradually formed.

Second, in the stagflation environment, pay attention to the upstream strong resource attributes of the agricultural chemical plate + downstream mandatory consumption attributes

A stagflationary environment requires constant switching between inflation and recession. Inflation to buy upstream resources, recession to buy must choose consumption, can both, is fertilizer, especially phosphate and potash fertilizer. At present, driven by inflation and food security crisis, global food prices are at a historic high, combined with the spread of the global novel coronavirus epidemic, and the attribute of food demand has been further highlighted. On the supply side, Ukraine recently claimed that the spring ploughing area was reduced by 50%, and the domestic spring ploughing in northeast China was affected by the epidemic prevention and control to a certain extent, while overseas stocks of staple grains such as corn and soybeans were at a low level. In this context, we believe that international and domestic food prices are more likely to rise than fall.

Historically, the maintenance of high food prices will drive the demand of the fertilizer industry, so we strongly recommend paying attention to the strong cycle of the agrochemical sector, especially the fertilizer sector. On the supply side, the current stock of fertilizer in the world's major grain growers such as India, North America and Brazil is low; On the demand side, the domestic fertilization season and the overseas fertilization season are coming. Therefore, the low inventory superposition fertilization season is coming, and we judge that the fertilizer price center will be further improved under the global replenishment demand. At the same time, due to the fourth quarter of last year to the domestic fertilizer supply to stabilize the price and then tighten exports, the current domestic and foreign phosphate fertilizer, nitrogen fertilizer price difference is huge. The market expects that with the decline of domestic supply pressure after spring tillage, the state or gradually liberalize the export restrictions on fertilizers, the high boom of fertilizers under the stronger price increase expectation is expected to continue, and the performance of related enterprises will have significant flexibility