The low -key back of the year rose! The domestic chemical market ushered in the “opening of the door”
In January 2023, under the situation of slowly recovering the demand side, the domestic chemical market gradually turned red.
According to the monitoring of widely chemical data, in the 67 chemicals in the first half of January, there were 38 rising products, accounting for 56.72%. Among them, dyshane, petroleum, and gasoline increased by more than 10%.
▷ Butadiene: continues to rise
At the beginning of the year leading manufacturers raised 500 yuan/ton, the demand side of a small positive situation, butadiene prices continue to rise. In East China, the price of butadiene can self-extraction refers to about 8200-8300 yuan/ton, which is 150 yuan/ton compared with the previous period. North China butadiene mainstream to the price of 8700-8850 yuan/ton, compared with +325 yuan/ton.
The clouds are cloudy in 2022, but will they clear up in 2023?
The end of 2022 presented significant global economic challenges that adversely affected chemical producers. High inflation has led central banks to take aggressive action, slowing economies in the United States and abroad. The ongoing conflict between Russia and Ukraine threatens to marginalize the economies of Eastern Europe, and the spillover effects of high energy prices are hurting Western European economies and many emerging market economies that rely on imported energy and food.
The repeated epidemic in many places in China has impeded freight logistics, limited production and operation of enterprises, weakened macroeconomic and downstream industries, and inhibited chemical demand. Driven by factors such as international geopolitical conflicts and the interest rate hike of the Federal Reserve, international oil and gas prices rose first and then fell throughout the year and maintained relatively high and wide fluctuations. Under pressure on the cost end of chemical products, prices rose first and then fell. Under the influence of multiple factors such as weak demand, falling price and cost pressure, the annual business climate of basic chemical industry has dropped significantly, and the industry valuation has fallen to the low range of nearly 5-10 years.
According to the data of New Century, in the first three quarters of 2022, operating revenue of sample enterprises increased but operating profit declined significantly. Upstream raw material manufacturers performed well, while chemical fiber and fine chemical industries located downstream of the industrial chain were faced with high raw material costs, low demand and low operating efficiency. The growth of fixed assets and construction scale of sample enterprises slowed down, and different subdivisions differentiated. However, affected by rising raw material prices and increasing inventory pressure, the scale of inventory and accounts receivable of sample enterprises increased greatly, the turnover rate slowed down, and the operation efficiency declined. The net operating cash inflow of sample enterprises decreased year on year, the fund gap of non-financing links further widened, the net debt financing scale of sample enterprises increased, the debt burden increased, and the asset-liability ratio increased.
In terms of profit, the total profit of chemical market showed an obvious downward trend compared with the same period last year.
So in 2023, will the chemical industry improve?
The prosperity of the basic chemical industry is greatly affected by the macroeconomic periodic changes. In 2022, the global economic downturn pressure increased. In the first half of the year, the price trend of chemical products was strong. Obviously weakening and insufficient price support, in the second half of the year, the price of chemical products fell rapidly with the price of energy prices. In 2023, my country’s economy is expected to gradually recover after the optimization of epidemic prevention policies, driving consumer demand to recover. The relaxation of real estate regulation policies is expected to boost the demand for real estate -related chemicals. The demand for chemical raw materials in the field is expected to continue high prosperity.
Demand side: The domestic epidemic control has been lifted, the real estate market has been released, and the macro economy is expected to be gradually repaired. In 2022, the epidemic broke out again in many places in China, and enterprises in all industries and industries stopped production in stages. The macroeconomic performance was weak and the growth rate of many downstream terminal industries, such as real estate, household appliances, textiles and clothing, and computers, slowed down significantly or even fell back to negative growth. Limited demand of downstream industries and relatively high prices of chemicals, combined with the epidemic situation, logistics is not smooth and it is difficult to ensure timeliness, which to some extent inhibits the demand for chemicals and the delivery schedule of orders. At the end of 2022, China’s real estate industry will receive three arrows of rescue, and epidemic control will be officially released with the release of The State Council’s “New Ten Actions”. In 2023, the domestic macro economy is expected to be gradually repaired, and the demand for chemical products is expected to achieve marginal improvement as the downstream industries gradually return to normal operation. In addition, the current sea freight has fallen, and the RMB has depreciated significantly against the US dollar under the operation of the Federal Reserve’s repeated interest rate hikes, which is expected to be favorable for the demand and delivery of domestic chemical export orders in 2023.
Supply side: Emerging track expansion and speed up, leading enterprise stronger Hengqiang. Driven by the needs of the emerging terminal industry, new material products will become an important driving force for the growth of the industry. Chemical products will tend to develop a high -end development, and the concentration and leading effect of various segmented industries will be further improved.
Raw materials side: International crude oil may maintain a wide shock. On the whole, it is expected that the international crude oil prices will maintain a wide range of volatile trends. The price operation center is expected to move down from the high point in 2022, and it will still support the cost of chemicals.
Focus on the three main lines
In 2023, the prosperity of the chemical industry will continue the trend of differentiation, the pressure on the demand end will gradually ease, and the capital expenditure on the supply end of the industry will accelerate. We recommend focusing on three main lines:
▷Synthetic biology: In the context of carbon neutrality, fossil-based materials may face a disruptive impact. Bio-based materials, with their excellent performance and cost advantages, will usher in a turning point, which is expected to be gradually mass-produced and widely used in engineering plastics, food and beverage, medical and other fields. Synthetic biology, as a new production mode, is expected to usher in a singularity moment and gradually open up market demand.
▷New materials: The importance of chemical supply chain security has been further highlighted, and the establishment of an autonomous and controllable industrial system is imminent. Some new materials are expected to accelerate the realization of domestic substitution, such as high-performance molecular sieve and catalyst, aluminum adsorption materials, aerogel, negative electrode coating materials and other new materials will gradually increase their permeability and market share, and the new material circuit is expected to accelerate growth.
▷Real estate & Recovery of consumer demand: With the government releasing the signal of loosening constraints in the property market and optimizing the targeted prevention and control strategy of the epidemic, the margin of real estate policy will be improved, the prosperity of consumption and real estate chain is expected to be restored, and real estate and consumer chain chemicals are expected to benefit.
Post time: Feb-02-2023