Domestic high power consumption chemicals are expected to fully enjoy the opportunity of electricity price arbitrage

Domestic high power consumption chemicals are expected to fully enjoy the price arbitrage in the western region. From the point of view of the electricity price level of provinces and autonomous regions, the western region has significant resource endowment. The average industrial electricity price in North China is 0.65 yuan /KWh, and the average industrial electricity price in eastern China is 0.58 yuan /KWh, while the average industrial electricity price in Northwest and Southwest China, represented by Ningxia, Inner Mongolia and Yunnan, remains below 0.37 yuan/KWH with low-price coal. Electricity prices in Xinjiang are as low as about 0.31 yuan/KWH. Taking yellow phosphorus and industrial silicon, which consume more power per unit, as an example, according to the current average industrial electricity price level in western China and Europe, the corresponding domestic single ton products can save energy costs of 2.3 and 20 thousand yuan respectively, which has a great price arbitrage advantage compared with overseas and other regions in China. If the electricity price in Xinjiang is 0.3 yuan and the electricity price in Europe is 2.3 yuan, the domestic price advantage of a single ton of industrial silicon is more than 26,000 yuan.

This round of rising energy prices significantly pushed up the cost of overseas products, chemicals are expected to repeat the situation in 2020, overseas because of high costs to reduce the load, and Chinese enterprises through low-cost export capacity transfer, earn a high difference. We have calculated the power consumption and comprehensive energy consumption of heavy point chemicals and sorted them according to the unit output value. At present, when foreign energy prices are high, varieties with higher comprehensive power consumption corresponding to unit output value are expected to obtain electricity price arbitrage opportunities by virtue of resource endowments in the western region, and product profitability is expected to be further enhanced. The top five key products we selected are: caustic soda, calcium carbide, industrial silicon, yellow phosphorus and synthetic ammonia, which are basically consistent with the above-mentioned varieties of supply contraction and stringent assessment.

1.1.3 The profit center of high energy consumption chemicals is expected to continue to rise in the future

The profit center of energy-intensive chemicals is expected to continue to rise. With the joint constraint effect of various supply-side control measures such as dual carbon policy, dual control of energy consumption, and production capacity indicators gradually emerging, the production capacity supply of some high-power consumption chemicals has experienced a strong contraction, while the demand side continues to improve with economic growth and export recovery. We expect that some enterprises that are leading in the western region and enjoy local resource endowments, especially in industries with gradually resource-based capacity attributes such as calcium carbide, caustic soda, yellow phosphorus and industrial silicon, will show stronger competitive advantages than other regions in China or overseas, and their profit centers will steadily rise in a longer time dimension.